PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Presents Forrester Research, Inc.'s unaudited consolidated financial statements, covering balance sheets, income, comprehensive income, cash flows, and notes [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2023 | December 31, 2022 | Change ($) | Change (%) | | :----------------------------------- | :------------ | :---------------- | :--------- | :--------- | | Total assets | $570,674 | $608,438 | $(37,764) | (6.2%) | | Total liabilities | $339,029 | $386,782 | $(47,753) | (12.4%) | | Total stockholders' equity | $231,645 | $221,656 | $9,989 | 4.5% | - Current assets decreased by **$25.069 million (10.6%)** from $235.290 million at December 31, 2022, to $210.221 million at June 30, 2023, primarily due to decreases in accounts receivable and deferred commissions[10](index=10&type=chunk) - Current liabilities decreased by **$25.860 million (9.6%)** from $269.389 million at December 31, 2022, to $243.529 million at June 30, 2023, mainly driven by a decrease in accrued expenses and other current liabilities[10](index=10&type=chunk) [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | 3 Months Ended June 30, 2023 | 3 Months Ended June 30, 2022 | Change ($) | Change (%) | | :----------------------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Total revenues | $135,589 | $148,246 | $(12,657) | (8.5%) | | Income from operations | $8,288 | $20,703 | $(12,415) | (60.0%) | | Net income | $5,304 | $13,874 | $(8,570) | (61.8%) | | Diluted income per common share | $0.28 | $0.72 | $(0.44) | (61.1%) | | | | | | | | Metric | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | Change ($) | Change (%) | | :----------------------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Total revenues | $249,259 | $273,217 | $(23,958) | (8.8%) | | Income from operations | $3,148 | $27,174 | $(24,026) | (88.4%) | | Net income | $1,229 | $18,022 | $(16,793) | (93.2%) | | Diluted income per common share | $0.06 | $0.94 | $(0.88) | (93.6%) | [Consolidated Statements of Comprehensive Income](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Consolidated Statements of Comprehensive Income Highlights (in thousands) | Metric | 3 Months Ended June 30, 2023 | 3 Months Ended June 30, 2022 | Change ($) | Change (%) | | :----------------------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Net income | $5,304 | $13,874 | $(8,570) | (61.8%) | | Other comprehensive income (loss) | $735 | $(4,489) | $5,224 | 116.4% | | Comprehensive income | $6,039 | $9,385 | $(3,346) | (35.6%) | | | | | | | | Metric | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | Change ($) | Change (%) | | :----------------------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Net income | $1,229 | $18,022 | $(16,793) | (93.2%) | | Other comprehensive income (loss) | $1,974 | $(5,671) | $7,645 | 134.8% | | Comprehensive income | $3,203 | $12,351 | $(9,148) | (74.1%) | - Other comprehensive income (loss) significantly improved, moving from a loss of **$(4,489) thousand** in Q2 2022 to a gain of **$735 thousand** in Q2 2023, primarily driven by foreign currency translation adjustments[15](index=15&type=chunk) [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | Change ($) | Change (%) | | :------------------------------------------------ | :----------------------------- | :----------------------------- | :--------- | :--------- | | Net cash provided by operating activities | $15,788 | $34,755 | $(18,967) | (54.6%) | | Net cash provided by (used in) investing activities | $3,444 | $(3,592) | $7,036 | 195.9% | | Net cash used in financing activities | $(15,239) | $(38,290) | $23,051 | (60.2%) | | Net change in cash, cash equivalents and restricted cash | $6,417 | $(12,772) | $19,189 | 150.2% | - Cash, cash equivalents and restricted cash increased by **$6.417 million** for the six months ended June 30, 2023, reaching $112.071 million, a significant improvement from a net decrease of **$(12.772) million** in the prior year period[18](index=18&type=chunk) [Notes to Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) [Note 1 — Interim Consolidated Financial Statements](index=7&type=section&id=Note%201%20%E2%80%94%20Interim%20Consolidated%20Financial%20Statements) Details the basis of presentation for unaudited interim financial statements, GAAP adherence, restricted cash, and recent accounting pronouncements - The unaudited interim consolidated financial statements are prepared in accordance with GAAP for interim financial information and SEC rules for Form 10-Q, with certain footnote disclosures omitted[20](index=20&type=chunk) Cash, Cash Equivalents and Restricted Cash (in thousands) | Metric | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :------------------------------------------------ | :----------------------------- | :----------------------------- | | Cash and cash equivalents | $109,951 | $103,225 | | Restricted cash classified in other assets | $2,120 | $2,034 | | Cash, cash equivalents and restricted cash (statement of cash flows) | $112,071 | $105,259 | - Recent accounting pronouncements (ASU No. 2020-04 and 2022-06 on Reference Rate Reform) are **not anticipated to have an impact** on the Company's financial position or results of operations[23](index=23&type=chunk) [Note 2 — Marketable Investments](index=7&type=section&id=Note%202%20%E2%80%94%20Marketable%20Investments) Summarizes marketable investments, including corporate and federal agency obligations, detailing market value, maturity periods, and no realized gains or losses Marketable Investments (in thousands) | Category | June 30, 2023 Market Value | December 31, 2022 Market Value | | :---------------------- | :--------------------------- | :--------------------------- | | Corporate obligations | $11,684 | $17,703 | | Federal agency obligations | $1,980 | $1,985 | | Total | $13,664 | $19,688 | Marketable Investments Maturity Periods as of June 30, 2023 (in thousands) | Category | FY 2023 (remainder) | FY 2024 | FY 2025 | Total | | :---------------------- | :------------------ | :-------- | :-------- | :-------- | | Corporate obligations | $5,953 | $3,832 | $1,899 | $11,684 | | Federal agency obligations | — | $1,980 | — | $1,980 | | Total | $5,953 | $5,812 | $1,899 | $13,664 | - No realized gains or losses on marketable investments were recorded during the three and six months ended June 30, 2023 and 2022[25](index=25&type=chunk) [Note 3 — Goodwill and Other Intangible Assets](index=8&type=section&id=Note%203%20%E2%80%94%20Goodwill%20and%20Other%20Intangible%20Assets) Details goodwill and finite-lived intangible assets, noting unimpaired goodwill and a decrease in net carrying amount of amortized intangibles - The Company performed its annual goodwill impairment testing as of November 30, 2022, and concluded **no impairments existed**. No interim impairment test was required through June 30, 2023[29](index=29&type=chunk) Goodwill Carrying Amount (in thousands) | Metric | Amount | | :------------------------- | :------- | | Balance at December 31, 2022 | $242,149 | | Translation adjustments | $1,138 | | Balance at June 30, 2023 | $243,287 | Finite-Lived Intangible Assets, Net Carrying Amount (in thousands) | Category | June 30, 2023 | December 31, 2022 | | :---------------------- | :------------ | :---------------- | | Customer relationships | $39,766 | $43,981 | | Technology | $1,311 | $2,107 | | Trademarks | $2,329 | $3,416 | | Total | $43,406 | $49,504 | Estimated Intangible Asset Amortization Expense (in thousands) | Year | Amount | | :---------------- | :------- | | 2023 (remainder) | $5,817 | | 2024 | $9,916 | | 2025 | $8,876 | | 2026 | $8,392 | | 2027 | $8,324 | | Thereafter | $2,081 | | Total | $43,406 | [Note 4 — Debt](index=9&type=section&id=Note%204%20%E2%80%94%20Debt) Outlines the $150.0 million revolving credit facility, outstanding balance, interest rate, and compliance with loan covenants - The Company has a **$150.0 million** revolving credit facility maturing in December 2026, with an expansion feature for an additional $50.0 million[32](index=32&type=chunk) Outstanding Borrowings (in thousands) | Description | June 30, 2023 | December 31, 2022 | | :---------------- | :------------ | :---------------- | | Credit facility | $35,000 | $50,000 | - The contractual annualized interest rate as of June 30, 2023, was **6.452%** (SOFR of 5.102% plus a margin of 1.35%). The weighted average annual effective interest rate for the three and six months ended June 30, 2023, was **6.32% and 6.06%**, respectively[38](index=38&type=chunk)[39](index=39&type=chunk) - The Company was in **full compliance** with all restrictive loan covenants as of June 30, 2023, and had **$114.4 million** of available borrowing capacity[33](index=33&type=chunk)[39](index=39&type=chunk) [Note 5 — Leases](index=10&type=section&id=Note%205%20%E2%80%94%20Leases) Details operating leases, associated costs, and ROU asset impairments due to office closures Total Lease Cost (in thousands) | Metric | 3 Months Ended June 30, 2023 | 3 Months Ended June 30, 2022 | Change ($) | Change (%) | | :--------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Total lease cost | $4,439 | $5,046 | $(607) | (12.0%) | | | | | | | | Metric | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | Change ($) | Change (%) | | :--------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Total lease cost | $8,668 | $10,194 | $(1,526) | (15.0%) | - Operating lease ROU assets obtained in exchange for lease obligations increased significantly to **$1.110 million** for the six months ended June 30, 2023, from **$0.172 million** in the prior year period[42](index=42&type=chunk) - During the six months ended June 30, 2023, the Company recorded ROU asset impairments of **$0.8 million** related to closing one floor of its San Francisco office and one other smaller office location[45](index=45&type=chunk) Future Minimum Lease Payments as of June 30, 2023 (in thousands) | Year | Operating Lease Payments | | :----------------------- | :----------------------- | | 2023 (remainder) | $8,133 | | 2024 | $16,184 | | 2025 | $13,920 | | 2026 | $12,336 | | 2027 | $5,713 | | Thereafter | $8,913 | | Total lease payments | $65,199 | [Note 6 – Revenue and Related Matters](index=11&type=section&id=Note%206%20%E2%80%93%20Revenue%20and%20Related%20Matters) Provides disaggregated revenue by geography, contract assets/liabilities, credit loss allowance, and deferred commission amortization, with future revenue expectations Revenue by Geography (in thousands) | Region | 3 Months Ended June 30, 2023 | 3 Months Ended June 30, 2022 | Change ($) | Change (%) | | :------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | North America | $112,006 | $124,177 | $(12,171) | (9.8%) | | Europe | $15,564 | $15,871 | $(307) | (1.9%) | | Asia Pacific | $6,137 | $6,445 | $(308) | (4.8%) | | Other | $1,882 | $1,753 | $129 | 7.4% | | Total | $135,589 | $148,246 | $(12,657) | (8.5%) | | | | | | | | Region | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | Change ($) | Change (%) | | :------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | North America | $204,677 | $226,487 | $(21,810) | (9.6%) | | Europe | $29,276 | $30,343 | $(1,067) | (3.5%) | | Asia Pacific | $11,519 | $13,118 | $(1,599) | (12.2%) | | Other | $3,787 | $3,269 | $518 | 15.8% | | Total | $249,259 | $273,217 | $(23,958) | (8.8%) | - Approximately **$362.2 million** of revenue is expected to be recognized during the next 24 months from remaining performance obligations as of June 30, 2023[52](index=52&type=chunk) Allowance for Expected Credit Losses (in thousands) | Metric | Amount | | :----------------------------- | :------- | | Balance at December 31, 2022 | $560 | | Provision for expected credit losses | $315 | | Write-offs | $(297) | | Balance at June 30, 2023 | $578 | - Amortization expense related to deferred commissions was **$10.4 million** and **$19.0 million** for the three and six months ended June 30, 2023, respectively, a decrease from the prior year periods[54](index=54&type=chunk) [Note 7 — Derivatives and Hedging](index=12&type=section&id=Note%207%20%E2%80%94%20Derivatives%20and%20Hedging) Describes the Company's use of an interest rate swap (matured) and foreign currency forward exchange contracts for hedging, with no outstanding balances - The Company's interest rate swap contract, designated as a cash flow hedge, **matured on December 31, 2022**[55](index=55&type=chunk)[58](index=58&type=chunk) - Foreign currency forward exchange contracts are used to mitigate foreign currency risk, with all contracts entered into during the six months ended June 30, 2023, **settling by period-end**[59](index=59&type=chunk)[60](index=60&type=chunk) Derivative Contracts Impact on Consolidated Statements of Operations (in thousands) | Metric | 3 Months Ended June 30, 2023 | 3 Months Ended June 30, 2022 | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | | :-------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Interest expense | $0 | $(50) | $0 | $(195) | | Other income (expense), net | $4 | $(93) | $66 | $(176) | | Total | $4 | $(143) | $66 | $(371) | [Note 8 — Fair Value Measurements](index=13&type=section&id=Note%208%20%E2%80%94%20Fair%20Value%20Measurements) Explains the fair value hierarchy for financial assets, classifying money market funds as Level 1 and marketable investments as Level 2 Fair Value Hierarchy for Financial Assets (in thousands) | Category | Level 1 (June 30, 2023) | Level 2 (June 30, 2023) | Total (June 30, 2023) | | :---------------------- | :---------------------- | :---------------------- | :-------------------- | | Money market funds | $5,360 | — | $5,360 | | Marketable investments | — | $13,664 | $13,664 | | Total Assets | $5,360 | $13,664 | $19,024 | | | | | | | Category | Level 1 (Dec 31, 2022) | Level 2 (Dec 31, 2022) | Total (Dec 31, 2022) | | :---------------------- | :---------------------- | :---------------------- | :-------------------- | | Money market funds | $5,800 | — | $5,800 | | Marketable investments | — | $19,688 | $19,688 | | Total Assets | $5,800 | $19,688 | $25,488 | - **No assets or liabilities were transferred** between levels of the fair value hierarchy, and **no changes were made** to valuation techniques for Level 2 assets and liabilities during the six months ended June 30, 2023[69](index=69&type=chunk) [Note 9 — Income Taxes](index=14&type=section&id=Note%209%20%E2%80%94%20Income%20Taxes) Details interim income tax provisions, noting a higher effective tax rate due to share-based awards and a full-year 2023 forecast of 43% Income Tax Expense and Effective Tax Rate (in thousands) | Metric | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | | :------------------ | :----------------------------- | :----------------------------- | | Income tax expense | $1,460 | $8,276 | | Effective tax rate | 54.3% | 31.5% | - The increase in the effective tax rate during the 2023 period was **primarily due to tax expense related to the settlement of share-based awards**[72](index=72&type=chunk) - The Company anticipates its effective tax rate for the full year 2023 will be **approximately 43%**[72](index=72&type=chunk) [Note 10 — Accumulated Other Comprehensive Loss ("AOCL")](index=14&type=section&id=Note%2010%20%E2%80%94%20Accumulated%20Other%20Comprehensive%20Loss%20(%22AOCL%22)) Details Accumulated Other Comprehensive Loss (AOCL) components, showing improvement due to positive foreign currency translation adjustments Accumulated Other Comprehensive Loss (AOCL) (in thousands) | Metric | June 30, 2023 | December 31, 2022 | | :---------------------- | :------------ | :---------------- | | Marketable Investments | $(137) | $(159) | | Translation Adjustment | $(5,807) | $(7,759) | | Total AOCL | $(5,944) | $(7,918) | - Foreign currency translation adjustments contributed **$1.952 million** in comprehensive income for the six months ended June 30, 2023, compared to a loss of **$(5.842) million** in the prior year period[74](index=74&type=chunk) [Note 11 — Net Income Per Common Share](index=15&type=section&id=Note%2011%20%E2%80%94%20Net%20Income%20Per%20Common%20Share) Explains basic and diluted net income per common share calculation, including common stock and common equivalent shares Weighted Average Common Shares Outstanding (in thousands) | Metric | 3 Months Ended June 30, 2023 | 3 Months Ended June 30, 2022 | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | | :------------------------------------------ | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Basic weighted average common shares outstanding | 19,193 | 18,871 | 19,151 | 18,929 | | Weighted average common equivalent shares | 65 | 302 | 63 | 289 | | Diluted weighted average common shares outstanding | 19,258 | 19,173 | 19,214 | 19,218 | - Options and restricted stock units excluded from diluted weighted average share calculation as anti-dilutive were **706 thousand** for the three months and **657 thousand** for the six months ended June 30, 2023[77](index=77&type=chunk) [Note 12 - Stockholders' Equity](index=16&type=section&id=Note%2012%20-%20Stockholders'%20Equity) Provides a detailed roll-forward of stockholders' equity components, equity plan activity, stock-based compensation, and treasury stock repurchases Total Stockholders' Equity (in thousands) | Metric | June 30, 2023 | December 31, 2022 | | :----------------------- | :------------ | :---------------- | | Total stockholders' equity | $231,645 | $221,656 | Restricted Stock Unit Activity (in thousands, except per share data) | Metric | Number of Shares | Weighted Average Grant Date Fair Value | | :------------------------ | :--------------- | :------------------------------------- | | Unvested at Dec 31, 2022 | 682 | $46.28 | | Granted | 309 | $34.52 | | Vested | (117) | $50.70 | | Forfeited | (86) | $43.55 | | Unvested at June 30, 2023 | 788 | $41.32 | Stock-Based Compensation Expense (in thousands) | Expense Category | 3 Months Ended June 30, 2023 | 3 Months Ended June 30, 2022 | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Cost of services and fulfillment | $2,209 | $2,203 | $4,056 | $4,129 | | Selling and marketing | $807 | $752 | $1,304 | $1,385 | | General and administrative | $844 | $882 | $1,665 | $1,617 | | Total | $3,860 | $3,837 | $7,025 | $7,131 | - During the three and six months ended June 30, 2023, the Company repurchased approximately **27 thousand shares** of common stock at an aggregate cost of approximately **$0.8 million**[84](index=84&type=chunk) [Note 13 — Restructuring and Related Costs](index=19&type=section&id=Note%2013%20%E2%80%94%20Restructuring%20and%20Related%20Costs) Details two significant workforce reductions in 2023, resulting in $12.1 million in restructuring and related costs, including impairments - In January 2023, the Company implemented a **4% workforce reduction**, incurring **$0.6 million** in severance and related costs during Q1 2023, along with a **$0.4 million** incremental impairment to its California office and a **$0.6 million write-off** of a capitalized software project[85](index=85&type=chunk) - In May 2023, the Company implemented an **8% workforce reduction**, recording **$7.5 million** of severance and related costs during Q2 2023. Additionally, **$2.3 million** in restructuring costs were incurred for office closures (including ROU asset impairments and accelerated amortization) and **$0.7 million** in contract termination costs[86](index=86&type=chunk) Restructuring Accrual Activity for May 2023 Action (in thousands) | Metric | Amount | | :------------------------------------ | :------- | | Accrual at December 31, 2022 | $0 | | Additional restructuring and related costs | $10,532 | | Non-cash charge (included above) | $(2,253) | | Cash payments | $(3,299) | | Accrual at June 30, 2023 | $4,980 | [Note 14 — Operating Segments](index=20&type=section&id=Note%2014%20%E2%80%94%20Operating%20Segments) Describes the Company's three operating segments (Research, Consulting, Events), their performance evaluation, and revenue declines due to macroeconomic conditions - The Company operates in three reportable segments: Research, Consulting, and Events, with performance evaluated based on segment revenues and direct expenses[89](index=89&type=chunk)[92](index=92&type=chunk) Segment Revenue and Expense Changes (YoY) | Segment | 3 Months Ended June 30, 2023 Revenue Change | 3 Months Ended June 30, 2023 Expense Change | 6 Months Ended June 30, 2023 Revenue Change | 6 Months Ended June 30, 2023 Expense Change | | :---------------- | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | | Research | (6%) | (1%) | (7%) | 1% | | Consulting | (19%) | (19%) | (16%) | (16%) | | Events | (8%) | (5%) | (7%) | (5%) | - Consulting segment revenue decrease was primarily due to the **macroeconomic environment** and a policy of **only selling consulting to contract value clients**, except in limited circumstances[135](index=135&type=chunk) [Note 15 — Contingencies](index=21&type=section&id=Note%2015%20%E2%80%94%20Contingencies) Discloses legal proceedings and claims, including a $4.8 million legal settlement accrual, with no expected material adverse effect on financials - The Company accrued **$4.8 million** of expense in the quarter ended March 31, 2023, for a preliminary legal settlement in a wage-related matter, classified in general and administrative expense[95](index=95&type=chunk) - Management believes that the likely results of current legal proceedings and claims are **not expected to have a material adverse effect** on the Company's financial position, results of operations, or cash flows, although the effect could be material to consolidated results for any interim reporting period[97](index=97&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Provides management's perspective on financial condition, operations, revenue, expenses, segment performance, liquidity, and macroeconomic and restructuring impacts [Overview](index=22&type=section&id=Overview) - The Company derives revenues from subscriptions to Research products and services, licensing electronic 'reprints,' performing consulting projects and advisory services, and hosting events[99](index=99&type=chunk) - Primary operating expenses include cost of services and fulfillment, selling and marketing expenses, and general and administrative expenses[100](index=100&type=chunk) Key Business Metrics (dollars in millions) | Metric | As of June 30, 2023 | As of June 30, 2022 | Absolute Change | Percentage Change | | :---------------- | :------------------ | :------------------ | :-------------- | :---------------- | | Contract value | $344.0 | $345.3 | $(1.3) | (0%) | | Client retention | 74% | 76% | (2) points | — | | Wallet retention | 92% | 99% | (7) points | — | | Number of clients | 2,604 | 2,928 | (324) | (11%) | - The decrease in retention rates and number of clients is primarily attributable to **macroeconomic conditions** (funding/budget pressure, high inflation, increasing interest rates, geopolitical turbulence, recession threat) and the **ongoing transition of the client base** to the Forrester Decisions product platform[103](index=103&type=chunk) [Results of Operations](index=24&type=section&id=Results%20of%20Operations) [Revenues](index=24&type=section&id=Revenues) Total Revenues by Segment (dollars in millions) | Revenue Category | 3 Months Ended June 30, 2023 | 3 Months Ended June 30, 2022 | Absolute Change | Percentage Change | | :--------------- | :----------------------------- | :----------------------------- | :-------------- | :---------------- | | Total revenues | $135.6 | $148.2 | $(12.7) | (9%) | | Research revenues | $87.7 | $89.4 | $(1.7) | (2%) | | Consulting revenues | $30.0 | $39.3 | $(9.3) | (24%) | | Events revenues | $17.9 | $19.5 | $(1.6) | (8%) | | | | | | | | Revenue Category | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | Absolute Change | Percentage Change | | :--------------- | :----------------------------- | :----------------------------- | :-------------- | :---------------- | | Total revenues | $249.3 | $273.2 | $(24.0) | (9%) | | Research revenues | $168.6 | $175.2 | $(6.6) | (4%) | | Consulting revenues | $61.7 | $77.7 | $(16.0) | (21%) | | Events revenues | $18.9 | $20.3 | $(1.4) | (7%) | - Total revenues decreased **9%** during both the three and six months ended June 30, 2023, compared to the prior year periods, and decreased by **8%** for the six months when excluding foreign currency effects[108](index=108&type=chunk) - Consulting revenues decreased **24%** and **21%** for the three and six months, respectively, due to decreased delivery of advisory and consulting services, influenced by the **macroeconomic environment** and a **focus on contract value clients**[110](index=110&type=chunk) [Cost of Services and Fulfillment](index=25&type=section&id=Cost%20of%20Services%20and%20Fulfillment) Cost of Services and Fulfillment (dollars in millions) | Metric | 3 Months Ended June 30, 2023 | 3 Months Ended June 30, 2022 | Absolute Change | Percentage Change | | :----------------------------- | :----------------------------- | :----------------------------- | :-------------- | :---------------- | | Cost of services and fulfillment | $54.6 | $61.0 | $(6.4) | (10%) | | | | | | | | Metric | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | Absolute Change | Percentage Change | | :----------------------------- | :----------------------------- | :----------------------------- | :-------------- | :---------------- | | Cost of services and fulfillment | $103.9 | $114.2 | $(10.3) | (9%) | - The decrease was primarily due to a **$3.8 million** decrease in compensation and benefit costs (lower headcount, incentive bonuses, benefits) for the three months, and a **$4.8 million** decrease for the six months (lower incentive bonuses, benefits, partially offset by higher salaries)[113](index=113&type=chunk)[114](index=114&type=chunk) - Professional services costs decreased by **$1.8 million** for the three months and **$4.5 million** for the six months, mainly due to lower contractor costs, outsourced expenses, and consulting fees[113](index=113&type=chunk)[114](index=114&type=chunk) [Selling and Marketing](index=26&type=section&id=Selling%20and%20Marketing) Selling and Marketing Expenses (dollars in millions) | Metric | 3 Months Ended June 30, 2023 | 3 Months Ended June 30, 2022 | Absolute Change | Percentage Change | | :----------------------------- | :----------------------------- | :----------------------------- | :-------------- | :---------------- | | Selling and marketing expenses | $41.6 | $45.0 | $(3.4) | (8%) | | | | | | | | Metric | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | Absolute Change | Percentage Change | | :----------------------------- | :----------------------------- | :----------------------------- | :-------------- | :---------------- | | Selling and marketing expenses | $83.1 | $89.0 | $(5.9) | (7%) | - The decrease was primarily due to a **$3.1 million** decrease in compensation and benefit costs (commissions, headcount, incentive bonuses, benefits) for the three months, and a **$4.7 million** decrease for the six months (commissions, incentive bonuses, benefits)[115](index=115&type=chunk)[116](index=116&type=chunk) [General and Administrative](index=26&type=section&id=General%20and%20Administrative) General and Administrative Expenses (dollars in millions) | Metric | 3 Months Ended June 30, 2023 | 3 Months Ended June 30, 2022 | Absolute Change | Percentage Change | | :----------------------------------- | :----------------------------- | :----------------------------- | :-------------- | :---------------- | | General and administrative expenses | $15.3 | $15.9 | $(0.6) | (4%) | | | | | | | | Metric | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | Absolute Change | Percentage Change | | :----------------------------------- | :----------------------------- | :----------------------------- | :-------------- | :---------------- | | General and administrative expenses | $36.5 | $31.4 | $5.1 | 16% | - The six-month increase was primarily due to a **$5.7 million** increase in legal costs, including a **$4.8 million** provision for a preliminary legal settlement for a wage-related matter and related legal services[118](index=118&type=chunk) [Depreciation](index=27&type=section&id=Depreciation) - Depreciation expense was **consistent** during the three and six months ended June 30, 2023, compared to the prior year periods[119](index=119&type=chunk) [Amortization of Intangible Assets](index=27&type=section&id=Amortization%20of%20Intangible%20Assets) - Amortization expense decreased by **$0.3 million** and **$0.6 million** during the three and six months ended June 30, 2023, respectively, compared to the prior year periods due to a decrease in the amortization of a trademark intangible asset[120](index=120&type=chunk) [Restructuring and Related Costs](index=27&type=section&id=Restructuring%20and%20Related%20Costs) - In January 2023, a **4% workforce reduction** was implemented, incurring **$0.6 million** in severance and related costs, a **$0.4 million** impairment to the California office, and a **$0.6 million software write-off**[121](index=121&type=chunk) - In May 2023, an **8% workforce reduction** was implemented, resulting in **$7.5 million** of severance and related costs, **$2.3 million** in restructuring costs for office closures (including ROU asset impairments), and **$0.7 million** in contract termination costs[122](index=122&type=chunk) [Interest Expense](index=27&type=section&id=Interest%20Expense) - Interest expense increased by **$0.2 million** and **$0.4 million** during the three and six months ended June 30, 2023, respectively, compared to the prior year periods, due to an increase in the annualized interest rate on borrowings, partially offset by lower average outstanding borrowings[123](index=123&type=chunk) [Other Income (Expense), Net](index=27&type=section&id=Other%20Income%20(Expense),%20Net) - Other income (expense), net, increased **$0.4 million** and **$1.2 million** during the three and six months ended June 30, 2023, respectively, primarily due to an increase in interest income[124](index=124&type=chunk) [Gain on Investments, Net](index=27&type=section&id=Gain%20on%20Investments,%20Net) - Gain on investments, net, decreased **$0.4 million** during the six months ended June 30, 2023, compared to the prior year period, due to a decrease in investment gains generated by the underlying technology-related investment funds[125](index=125&type=chunk) [Income Tax Expense](index=27&type=section&id=Income%20Tax%20Expense) - Income tax expense decreased by **$6.8 million** during the six months ended June 30, 2023, compared to the prior year period, primarily due to the decrease in income from operations[127](index=127&type=chunk) - The effective tax rate increased to **54%** for the six months ended June 30, 2023, from **31%** in the prior year, primarily due to tax expense related to the settlement of share-based awards[127](index=127&type=chunk) - For the full year 2023, the Company anticipates its effective tax rate will be **approximately 43%**[127](index=127&type=chunk) [Segment Results](index=28&type=section&id=Segment%20Results) - Research segment revenues decreased **6%** and **7%** during the three and six months ended June 30, 2023, respectively, primarily due to **flat Contract Value (CV) growth** and a **decline in revenue from reprint and discontinued products**[133](index=133&type=chunk) - Consulting segment revenues decreased **19%** and **16%** during the three and six months ended June 30, 2023, respectively, primarily due to the **macroeconomic environment** and a **strategic focus on selling consulting only to contract value clients**[135](index=135&type=chunk) - Event segment revenues decreased **8%** and **7%** during the three and six months ended June 30, 2023, respectively, due to a **decrease in sponsorship revenues and event ticket revenue from lower attendance**[137](index=137&type=chunk) [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) Cash Flows from Activities (dollars in millions) | Cash Flow Activity | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | Change ($) | | :------------------------- | :----------------------------- | :----------------------------- | :--------- | | Operating activities | $15.8 | $34.8 | $(19.0) | | Investing activities | $3.4 | $(3.6) | $7.0 | | Financing activities | $(15.2) | $(38.3) | $23.1 | - The **$19.0 million** decrease in cash provided from operations was primarily due to a **$16.8 million** decrease in net income, the timing of certain benefit payments, and an increase in income tax payments[140](index=140&type=chunk) - Financing activities used **$15.2 million** of cash, primarily for **$15.0 million** in discretionary repayments of the revolving credit facility, **$1.3 million** in taxes related to share settlements, and **$0.8 million** for common stock repurchases[143](index=143&type=chunk) - As of June 30, 2023, the Company had **$123.6 million** in cash, cash equivalents, and marketable investments, with **$90.8 million** held outside the U.S. The remaining stock repurchase authorization was approximately **$74.1 million**[143](index=143&type=chunk)[148](index=148&type=chunk) [Recent Accounting Pronouncements](index=30&type=section&id=Recent%20Accounting%20Pronouncements) - Refer to Note 1 – Interim Consolidated Financial Statements for a full description of recent accounting pronouncements, including expected dates of adoption and effects on results of operations and financial condition[149](index=149&type=chunk) [Critical Accounting Policies and Estimates](index=30&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - There have been no material changes to the critical accounting policies and estimates previously disclosed in the Annual Report on Form 10-K for the fiscal year ended December 31, 2022[150](index=150&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Reports no material changes in the Company's market risk sensitivity assessment since the prior Annual Report on Form 10-K - **No material changes** in the assessment of sensitivity to market risk have occurred since the Annual Report on Form 10-K for the year ended December 31, 2022[152](index=152&type=chunk) [Item 4. Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) Details the evaluation of disclosure controls and procedures, confirming effectiveness and no material changes to internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=31&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - Management, including the principal executive officer and principal financial officer, concluded that the Company's disclosure controls and procedures were **effective as of June 30, 2023**, to provide reasonable assurance of achieving desired control objectives[153](index=153&type=chunk) [Changes in Internal Control Over Financial Reporting](index=31&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) - There was **no change** in the Company's internal control over financial reporting that occurred during the quarter ended June 30, 2023, which has materially affected, or is reasonably likely to materially affect, internal control over financial reporting[154](index=154&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) Incorporates legal proceedings and contingencies information by reference from Note 15 of Part I, Item 1 - Information regarding legal proceedings is **incorporated by reference** from Note 15 - Contingencies in Part I, Item 1 of this Quarterly Report[156](index=156&type=chunk) [Item 1A. Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) Refers to risk factors from the Annual Report on Form 10-K, noting their continued applicability and potential for additional unknown risks - The risk factors described in the Annual Report on Form 10-K for the year ended December 31, 2022, **remain applicable** to the Company's business[157](index=157&type=chunk) - Additional risks and uncertainties not currently known or deemed immaterial may also **materially adversely affect** the business, financial condition, and/or operating results[157](index=157&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details the stock repurchase program, including shares repurchased during Q2 2023 and remaining authorization - The Board of Directors authorized an aggregate **$585.0 million** for common stock repurchases under its stock repurchase program[158](index=158&type=chunk) Common Stock Repurchases During Q2 2023 | Period | Total Number of Shares Purchased | Average Price Paid per Share ($) | Maximum Approximate Dollar Value of Shares Yet to be Purchased (In thousands) | | :---------------- | :------------------------------- | :------------------------------- | :-------------------------------------------------------------------------- | | June 1 - June 30 | 27,500 | $29.82 | $74,146 | - As of June 30, 2023, approximately **$74.1 million** remained authorized for stock repurchases[158](index=158&type=chunk) [Item 3. Defaults Upon Senior Securities](index=32&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to the Company for the current reporting period - **Not applicable**[159](index=159&type=chunk) [Item 4. Mine Safety Disclosures](index=32&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Company for the current reporting period - **Not applicable**[160](index=160&type=chunk) [Item 5. Other Information](index=32&type=section&id=Item%205.%20Other%20Information) Reports no director or officer adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q2 2023 - **No director or officer adopted or terminated** a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2023[161](index=161&type=chunk) [Item 6. Exhibits](index=33&type=section&id=Item%206.%20Exhibits) Lists all exhibits filed with Form 10-Q, including organizational documents, officer certifications, and Inline XBRL documents - Exhibits include Restated Certificate of Incorporation, Amended and Restated By-Laws, Specimen Certificate for Common Stock, **Certifications of the Principal Executive Officer and Principal Financial Officer** (31.1, 31.2, 32.1, 32.2), and various Inline XBRL documents (101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104)[164](index=164&type=chunk) SIGNATURES [Signatures](index=34&type=section&id=SIGNATURES_details) Formally attests that the Quarterly Report on Form 10-Q has been duly signed by Forrester Research, Inc.'s Chief Financial Officer - The report was **signed by L. Christian Finn, Chief Financial Officer** of Forrester Research, Inc., on August 9, 2023[168](index=168&type=chunk)

| --- | --- | |-------------------------------------------------|-------| | | | | © Forrester Research, Inc. All rights reserved. | | | --- | --- | --- | |-----------------------------------------------------------------------------------------------------------------------------|-------------------------------------|--------------------------------------------------------------------------------------------------------------| | | | | | Research Multi-year, annual recurring revenue product portfolio that co ...

Forrester Research, Inc. (NASDAQ:FORR) Q2 2023 Earnings Conference Call July 27, 2023 4:30 PM ET Company Participants Ed Bryce Morris - Vice President, Corporate Development and Investor Relations George Colony - Chief Executive Officer and Chairman Chris Finn - Chief Financial Officer Carrie Johnson - Chief Product Officer Nate Swan - Chief Sales Officer Conference Call Participants Anja Soderstrom - Sidoti Vince Colicchio - Barrington Research Operator Good afternoon and thank you for standing by. Welcome ...

PART I FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) For the first quarter of 2023, Forrester Research reported a net loss of $4.1 million, a significant reversal from the $4.1 million net income in the same period of 2022, driven by a 9% year-over-year decline in total revenues to $113.7 million [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2023, total assets slightly decreased to $593.9 million, mirrored by a reduction in total liabilities to $371.1 million, primarily due to lower long-term debt | | March 31, 2023 (In thousands) | December 31, 2022 (In thousands) | | :--- | :--- | :--- | | **Total current assets** | $225,844 | $235,290 | | **Total assets** | $593,888 | $608,438 | | **Total current liabilities** | $269,305 | $269,389 | | **Long-term debt** | $35,000 | $50,000 | | **Total liabilities** | $371,142 | $386,782 | | **Total stockholders' equity** | $222,746 | $221,656 | - Cash and cash equivalents remained stable at approximately **$104.2 million** as of March 31, 2023[10](index=10&type=chunk) [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) The company reported a net loss of $4.1 million for Q1 2023, a reversal from prior-year net income, primarily due to a 9% decrease in total revenues to $113.7 million | Metric (In thousands, except per share data) | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | **Total revenues** | $113,670 | $124,971 | | Research | $80,906 | $85,780 | | Consulting | $31,750 | $38,431 | | **Total operating expenses** | $118,810 | $118,500 | | **Income (loss) from operations** | $(5,140) | $6,471 | | **Net income (loss)** | $(4,075) | $4,148 | | **Diluted income (loss) per common share** | $(0.21) | $0.22 | - The company incurred **$1.6 million** in restructuring costs during Q1 2023, which were not present in the same period of 2022[12](index=12&type=chunk) [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities significantly decreased to $12.3 million in Q1 2023, while financing activities included a $15.0 million debt repayment, resulting in a slight overall cash increase | Cash Flow Activity (In thousands) | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $12,282 | $22,666 | | **Net cash provided by (used in) investing activities** | $1,342 | $(1,912) | | **Net cash used in financing activities** | $(14,239) | $(22,737) | | **Net change in cash, cash equivalents and restricted cash** | $634 | $(3,336) | - Financing activities in Q1 2023 included a **$15.0 million** payment on borrowings, while Q1 2022 also included **$9.5 million** in common stock repurchases not present in Q1 2023[18](index=18&type=chunk) [Notes to Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail stable goodwill, a reduction in outstanding debt to $35 million, a $1.6 million restructuring charge in Q1 2023, and a subsequent 8% workforce reduction in May 2023 - As of March 31, 2023, the company had **$35.0 million** in outstanding borrowings under its credit facility, a decrease from **$50.0 million** at the end of 2022[36](index=36&type=chunk) - In January 2023, the company implemented a workforce reduction of approximately **4%**, recording **$0.6 million** in related costs, alongside an additional **$1.0 million** restructuring charge for office closure and a software write-off[78](index=78&type=chunk)[79](index=79&type=chunk) - Subsequent to the quarter's end, in May 2023, the company initiated another workforce reduction of approximately **8%** and office closures, with anticipated total costs of **$10.0 million to $11.0 million**[88](index=88&type=chunk) - Following an April 2023 mediation, the company accrued **$4.8 million** for a wage-related matter, classified under general and administrative expenses for the quarter[85](index=85&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the 9% revenue decline and weakened performance to macroeconomic conditions and product transition, with Contract Value flat but wallet retention significantly dropping to 92% [Key Metrics](index=20&type=section&id=Key%20Metrics) As of March 31, 2023, key performance metrics showed pressure with Contract Value flat, but client and wallet retention declining, and client numbers decreasing by 9% | Metric | As of March 31, 2023 | As of March 31, 2022 | Change | | :--- | :--- | :--- | :--- | | **Contract value** | $347.3 M | $347.3 M | 0% | | **Client retention** | 74% | 77% | (3) points | | **Wallet retention** | 92% | 103% | (11) points | | **Number of clients** | 2,678 | 2,945 | (9%) | - The decrease in retention rates and client numbers is attributed to macroeconomic pressures on technology clients and the ongoing transition to the Forrester Decisions product platform[94](index=94&type=chunk) [Results of Operations](index=22&type=section&id=Results%20of%20Operations) Total revenues decreased by 9% to $113.7 million in Q1 2023, with Research and Consulting revenues falling, while general and administrative expenses surged 37% due to a $4.8 million legal settlement provision | Revenue Type (in millions) | Q1 2023 | Q1 2022 | % Change | | :--- | :--- | :--- | :--- | | **Total revenues** | $113.7 | $125.0 | (9%) | | Research revenues | $80.9 | $85.8 | (6%) | | Consulting revenues | $31.8 | $38.4 | (17%) | - General and administrative expenses increased by **$5.7 million (37%)** year-over-year, mainly due to a **$4.8 million** provision for a preliminary legal settlement for a wage-related matter[104](index=104&type=chunk) [Segment Results](index=24&type=section&id=Segment%20Results) The Research segment experienced an 8% revenue decrease, while Consulting revenue declined 13% due to lower demand for content marketing and strategy consulting offerings amid challenging macroeconomic conditions | Segment (Q1 2023 vs Q1 2022) | Revenue Change | Expense Change | | :--- | :--- | :--- | | **Research** | (8%) | +4% | | **Consulting** | (13%) | (14%) | | **Events** | +33% | (7%) | - The decline in Consulting segment revenue was primarily due to lower demand for content marketing and strategy consulting offerings[118](index=118&type=chunk) [Liquidity and Capital Resources](index=25&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a solid liquidity position with $121.0 million in cash and investments, despite a decrease in cash from operations, and made a $15.0 million discretionary debt repayment - Cash generated from operating activities was **$12.3 million** for Q1 2023, a decrease from **$22.7 million** in Q1 2022, primarily due to lower net income and timing of benefit payments[121](index=121&type=chunk) - The company used **$14.2 million** in financing activities, mainly for a **$15.0 million** repayment of its revolving credit facility[124](index=124&type=chunk) - As of March 31, 2023, the company had cash, cash equivalents, and marketable investments of **$121.0 million** and believes this is sufficient to meet its needs for the next twelve months[129](index=129&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=26&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reported no material changes to its market risk disclosures since its Annual Report on Form 10-K for the year ended December 31, 2022 - There have been no material changes in the company's assessment of its sensitivity to market risk from what was disclosed in the 2022 Form 10-K[133](index=133&type=chunk) [Item 4. Controls and Procedures](index=26&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2023, with no material changes to internal control over financial reporting during the quarter - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2023[134](index=134&type=chunk) - No changes occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[135](index=135&type=chunk) PART II OTHER INFORMATION [Item 1. Legal Proceedings](index=27&type=section&id=Item%201.%20Legal%20Proceedings) The company accrued $4.8 million in Q1 2023 for a wage-related matter that reached an agreement in principle during an April 2023 mediation - The company accrued **$4.8 million** in Q1 2023 for a wage-related matter that reached an agreement in principle during an April 2023 mediation[85](index=85&type=chunk)[138](index=138&type=chunk) [Item 1A. Risk Factors](index=27&type=section&id=Item%201A.%20Risk%20Factors) The company states that the risk factors previously disclosed in its 2022 Annual Report on Form 10-K remain applicable and have not materially changed - There are no new risk factors presented; the company directs investors to the risk factors discussed in its 2022 Annual Report on Form 10-K[139](index=139&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=27&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Forrester did not repurchase any shares of its common stock under its authorized stock repurchase program during the first quarter of 2023 - The company did not purchase any of its common stock under the stock repurchase program during the quarter ended March 31, 2023[140](index=140&type=chunk) [Item 6. Exhibits](index=28&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including amendments to credit agreements, CEO and CFO certifications, and interactive data files - Key exhibits filed include the Second Amendment to the Credit Agreement and certifications from the Principal Executive Officer and Principal Financial Officer[146](index=146&type=chunk)

Forrester Research, Inc. (NASDAQ:FORR) Q1 2023 Earnings Conference Call May 4, 2023 4:30 PM ET Company Participants Tyson Seely - Vice President of Investor Relations George Colony - Chief Executive Officer and Chairman Nate Swan - Chief Sales Officer Chris Finn - Chief Financial Officer Carrie Johnson - Chief Product Officer Conference Call Participants Andrew Nicholas - William Blair Anja Soderstrom - Sidoti Vincent Colicchio - Barrington Research Operator Good afternoon, and thank you for standing by. We ...

PART I This section outlines Forrester's business, risk factors, properties, legal proceedings, and statutory disclosures [Item 1. Business](index=3&type=section&id=Item%201.%20Business) Forrester is a global research and advisory firm, accelerating client growth via subscription research, consulting, and events - Forrester Research, Inc. is a global independent research and advisory firm focused on helping business and technology leaders achieve growth through 'customer obsession' via proprietary research, consulting, and events[14](index=14&type=chunk) - The core business model is built on increasing **Contract Value (CV)** through renewable subscription research products, with consulting and events playing complementary roles in driving **CV** growth[18](index=18&type=chunk)[19](index=19&type=chunk)[21](index=21&type=chunk) - **Forrester Decisions**, launched in 2021, is the primary subscription research product, with a goal to migrate existing clients and achieve approximately **two-thirds of CV** in **Forrester Decisions** products by the end of 2023. As of December 31, 2022, **Forrester Decisions** comprised approximately **32% of the company's CV**[25](index=25&type=chunk)[84](index=84&type=chunk) - The company's sales force increased from **637 personnel in 2021 to 709 in 2022**, selling products and services globally through various groups segmented by client size, geography, and market potential[30](index=30&type=chunk)[31](index=31&type=chunk) Contract Value and Client Metrics | Metric | December 31, 2022 (in millions) | December 31, 2021 (in millions) | Change (Absolute, in millions) | Change (Percentage) | |---|---|---|---|---| | Contract value | $353.4 | $343.0 | $10.4 | 3% | | Client retention | 74% | 78% | (4) points | — | | Wallet retention | 94% | 102% | (8) points | — | | Number of clients | 2,778 | 3,005 | (227) | (8%) | - The decline in **CV** growth rate, client retention, and client count in 2022 was primarily attributed to macroeconomic conditions (funding/budget pressure on smaller tech clients, inflation, rising interest rates, geopolitical turbulence, recession threat) and the ongoing transition to the **Forrester Decisions** product platform[84](index=84&type=chunk) - As of December 31, 2022, Forrester employed **2,033 persons** globally, with **1,487** in the US and Canada, **298** in EMEA, and **248** in Asia Pacific[39](index=39&type=chunk) [Item 1A. Risk Factors](index=7&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from declining renewals, reduced consulting demand, economic conditions, international operations, and talent retention - Key business risks include a decline in renewals or demand for subscription-based research services (especially during the **Forrester Decisions** migration), decreased demand for consulting services (which comprised **28% of 2022 revenues**), and adverse impacts from the economic environment (inflation, interest rates, recession threat) on technology spending[44](index=44&type=chunk)[45](index=45&type=chunk)[46](index=46&type=chunk) - International operations, accounting for approximately **21% of 2022 revenues** across **79 countries**, expose the company to risks such as political/economic conditions, staffing challenges, regulatory changes, currency fluctuations, and intellectual property enforcement difficulties[47](index=47&type=chunk)[98](index=98&type=chunk) - The company's future success depends on its ability to develop and offer new products, attract and retain qualified professional staff (including key management like CEO George F. Colony), and anticipate/respond to rapidly changing market trends and technologies[48](index=48&type=chunk)[49](index=49&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk) - Outstanding debt of **$50.0 million** under a **$150.0 million** revolving credit facility (as of December 31, 2022) could restrict business operations and affect financial condition, with covenants limiting financial flexibility[52](index=52&type=chunk)[129](index=129&type=chunk) - Competition is intense, primarily from other research/advisory firms (e.g., Gartner), marketing agencies, consulting firms, and free online information sources, with low barriers to entry in some market segments[53](index=53&type=chunk) - General risks include network disruptions or security breaches, challenges in enforcing and protecting intellectual property rights, compliance with evolving privacy laws (GDPR, CCPA), taxation risks from operating in multiple jurisdictions, and potential adverse impacts from health epidemics like COVID-19[57](index=57&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk)[60](index=60&type=chunk)[61](index=61&type=chunk) [Item 1B. Unresolved Staff Comments](index=9&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company has not received any unresolved written comments from the Securities and Exchange Commission - No unresolved written comments have been received from the Securities and Exchange Commission[63](index=63&type=chunk) [Item 2. Properties](index=9&type=section&id=Item%202.%20Properties) Forrester's corporate headquarters is in Cambridge, Massachusetts, with global leased offices, deemed adequate for current operations - The corporate headquarters is located in Cambridge, Massachusetts, comprising approximately **190,000 square feet**, with the lease expiring on February 28, 2027[64](index=64&type=chunk) - Additional office spaces are rented in San Francisco, New York City, McLean (VA), Nashville, Norwalk (CT), London, New Delhi, Singapore, and Sydney, along with other short-term leases globally[65](index=65&type=chunk) - Management believes current facilities are adequate and additional facilities are available for future needs[66](index=66&type=chunk) [Item 3. Legal Proceedings](index=10&type=section&id=Item%203.%20Legal%20Proceedings) The company is subject to ordinary course legal proceedings, which are not expected to materially impact its financial position or operations - The company is subject to legal proceedings and civil/regulatory claims in the ordinary course of business[67](index=67&type=chunk) - Accruals for legal contingencies are recorded when a liability is probable and estimable, with associated costs expensed as incurred[67](index=67&type=chunk) - Management believes current lawsuits and claims are not expected to have a material adverse effect on financial position, results of operations, or cash flows, though litigation can still be adverse due to costs and resource diversion[68](index=68&type=chunk)[69](index=69&type=chunk) [Item 4. Mine Safety Disclosures](index=10&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to Forrester Research, Inc - Not applicable[70](index=70&type=chunk) PART II This section details the company's common equity market, financial condition, operations, market risks, and consolidated financial statements [Item 5. Market For Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities](index=11&type=section&id=Item%205.%20Market%20For%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Forrester's common stock trades on Nasdaq, with a suspended dividend and **$510.0 million** utilized from authorized stock repurchases - Common stock is listed on the Nasdaq Global Select Market under the symbol 'FORR'[73](index=73&type=chunk) - The quarterly dividend program was indefinitely suspended starting in 2019[73](index=73&type=chunk) Stockholder and Repurchase Program Metrics | Metric | Value | |---|---| | Stockholders of record (as of March 6, 2023) | ~24 | | Closing stock price (as of March 6, 2023) | $34.09 per share | | Total authorized stock repurchase program | $585.0 million | | Aggregate cost of repurchased shares (as of Dec 31, 2022) | $510.0 million | | Number of shares repurchased (as of Dec 31, 2022) | ~17.0 million | | Shares outstanding (as of March 6, 2023) | 19,191,000 | | Market value of non-affiliate common equity (as of June 30, 2022) | ~$532,000,000 | - No shares were purchased under the stock repurchase program during the quarter ended December 31, 2022[75](index=75&type=chunk) [Item 6. [Reserved]](index=12&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=13&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes Forrester's financial performance, noting slowed **Contract Value** growth, increased expenses, decreased net income, and cash flow changes [Overview](index=13&type=section&id=Overview) This overview describes Forrester's revenue streams, operating expenses, and **Contract Value (CV)** metric performance - Revenues are generated from Research subscriptions, electronic reprints, consulting projects, advisory services, and events. Subscription products are recognized ratably over the contract term, while consulting and event revenues are recognized as services are provided or events are completed[79](index=79&type=chunk) - Primary operating expenses include cost of services and fulfillment, selling and marketing, and general and administrative expenses, with overhead costs allocated based on employee headcount[80](index=80&type=chunk) - The company focuses on **Contract Value (CV)** products, which are its most profitable and have historically high renewal rates. **CV** is defined as the annualized value of all recurring research-related contracts in effect at a specific point in time[81](index=81&type=chunk)[83](index=83&type=chunk) Contract Value and Client Metrics | Metric | 2022 (in millions) | 2021 (in millions) | Absolute Change (in millions) | Percentage Change | |---|---|---|---|---| | Contract value | $353.4 | $343.0 | $10.4 | 3% | | Client retention | 74% | 78% | (4) points | — | | Wallet retention | 94% | 102% | (8) points | — | | Number of clients | 2,778 | 3,005 | (227) | (8%) | - The **3% CV growth** in 2022 represents an **11-point decrease** from **14% growth** in 2021, primarily due to macroeconomic conditions (funding/budget pressure, inflation, interest rates, geopolitical turbulence, recession threat) and the ongoing transition to the **Forrester Decisions** product platform[84](index=84&type=chunk) - Approximately **32% of CV** was composed of **Forrester Decisions** products as of December 31, 2022, with an anticipation of reaching **two-thirds** by the end of 2023. Macroeconomic conditions and product transition are expected to pressure key metrics through the first half of 2023[84](index=84&type=chunk) [Critical Accounting Estimates](index=14&type=section&id=Critical%20Accounting%20Estimates) This section outlines key accounting estimates for revenue recognition, goodwill impairment, and income taxes - Key accounting estimates include revenue recognition (determining performance obligations, standalone selling prices, and estimating unused prepaid obligations), goodwill and intangible asset impairment, and income taxes (deferred tax assets/liabilities and valuation allowances)[85](index=85&type=chunk)[86](index=86&type=chunk)[88](index=88&type=chunk)[89](index=89&type=chunk)[90](index=90&type=chunk)[94](index=94&type=chunk) - **Goodwill** and intangible assets totaled **$291.7 million** as of December 31, 2022. The annual goodwill impairment test as of November 30, 2022, concluded no impairments[89](index=89&type=chunk)[91](index=91&type=chunk) - In 2022, the company recorded **$3.7 million** in right-of-use asset impairments and **$1.3 million** in leasehold improvement impairments related to closing office space in San Francisco[94](index=94&type=chunk) - A valuation allowance of **$1.0 million** was maintained as of December 31, 2022, primarily for foreign net operating loss carryforwards[94](index=94&type=chunk) [Results of Operations for the years ended December 31, 2022 and 2021](index=16&type=section&id=Results%20of%20Operations%20for%20the%20years%20ended%20December%2031%2C%202022%20and%202021) This section analyzes Forrester's consolidated revenues and operating expenses for 2022 and 2021 Consolidated Statements of Income (as a percentage of total revenues) | Metric | 2022 (%) | 2021 (%) | |---|---|---| | Research revenues | 65.9% | 65.8% | | Consulting revenues | 28.4% | 31.6% | | Events revenues | 5.7% | 2.6% | | **Total revenues** | **100.0%** | **100.0%** | | Cost of services and fulfillment | 41.6% | 40.8% | | Selling and marketing | 33.8% | 34.6% | | General and administrative | 12.6% | 11.7% | | Depreciation | 1.7% | 1.9% | | Amortization of intangible assets | 2.5% | 3.1% | | Integration costs | — | 0.1% | | Restructuring costs | 1.7% | — | | **Income from operations** | **6.1%** | **7.8%** | | Interest expense | (0.5%) | (0.9%) | | Other income (expense), net | — | (0.2%) | | Gains on investments, net | 0.1% | — | | Income before income taxes | 5.7% | 6.7% | | Income tax expense | 1.6% | 1.7% | | **Net income** | **4.1%** | **5.0%** | Revenue Performance (2022 vs. 2021) | Revenue Category | 2022 (in millions) | 2021 (in millions) | Absolute Change (in millions) | Percentage Change | |---|---|---|---|---| | Total revenues | $537.8 | $494.3 | $43.5 | 9% | | Research revenues | $354.5 | $325.3 | $(29.1) | 9% | | Consulting revenues | $152.6 | $156.1 | $(3.5) | (2%) | | Events revenues | $30.7 | $12.9 | $17.9 | 139% | | Revenues attributable to customers outside of the U.S. | $111.7 | $112.7 | $(1.0) | (1%) | | Percentage of revenue attributable to customers outside of the U.S. | 21% | 23% | (2) points | — | - Total revenues increased **9%** (**10%** excluding foreign currency effects) in 2022, driven by a **139% increase in Events revenue** due to the return of in-person attendance, while Consulting revenues decreased **2%** due to a shift in research analysts' efforts to **CV products**[98](index=98&type=chunk)[99](index=99&type=chunk)[100](index=100&type=chunk)[101](index=101&type=chunk) Operating Expenses (2022 vs. 2021) | Expense Category | 2022 (in millions) | 2021 (in millions) | Absolute Change (in millions) | Percentage Change | |---|---|---|---|---| | Cost of services and fulfillment | $223.8 | $201.8 | $22.0 | 11% | | Selling and marketing | $181.9 | $170.9 | $11.0 | 6% | | General and administrative | $67.7 | $58.1 | $9.6 | 17% | | Amortization of intangible assets | $13.2 | $15.1 | $(2.0) | (13%) | | Restructuring costs | $9.3 | $0.0 | $9.3 | — | | Interest expense | $(2.5) | $(4.2) | $1.8 | (43%) | | Income tax expense | $8.9 | $8.3 | $0.6 | 7% | - Cost of services and fulfillment increased **11%** due to higher event expenses, compensation/benefits (headcount, merit increases), and stock compensation. Selling and marketing expenses rose **6%** primarily from increased compensation/benefits. General and administrative expenses increased **17%** due to higher compensation/benefits, professional services, and software costs[103](index=103&type=chunk)[104](index=104&type=chunk)[105](index=105&type=chunk) - Amortization expense decreased by **$2.0 million** as certain intangible assets became fully amortized in 2021. Restructuring costs of **$9.3 million** were incurred in Q4 2022, including **$5.0 million** for office space impairment and **$4.3 million** for severance related to a **4% workforce reduction**[107](index=107&type=chunk)[108](index=108&type=chunk) - Interest expense decreased by **$1.8 million** due to lower average outstanding borrowings, partially offset by an increase in the annualized interest rate[109](index=109&type=chunk) - The effective tax rate increased from **25% in 2021 to 29% in 2022**, mainly due to increased non-deductible stock compensation, higher foreign subsidiary income subject to U.S. tax, and non-deductible expenses, partially offset by a tax legislation benefit[112](index=112&type=chunk) [Segment Results](index=19&type=section&id=Segment%20Results) This section details the financial performance of Forrester's Research, Consulting, and Events operating segments - The company operates in three reportable segments: Research, Consulting, and Events, with performance evaluated based on segment revenues and direct expenses[113](index=113&type=chunk)[117](index=117&type=chunk) Segment Revenues and Expenses (2022 vs. 2021, in thousands) | Segment | 2022 Revenues (in thousands) | 2021 Revenues (in thousands) | YoY Revenue Change (%) | 2022 Expenses (in thousands) | 2021 Expenses (in thousands) | YoY Expense Change (%) | |---|---|---|---|---|---|---| | Research | $396,012 | $372,587 | 6% | $(133,566) | $(118,155) | 13% | | Consulting | $111,028 | $108,867 | 2% | $(56,889) | $(51,770) | 10% | | Events | $30,747 | $12,861 | 139% | $(21,801) | $(12,709) | 72% | | **Consolidated Total** | **$537,787** | **$494,315** | **9%** | **$(212,256)** | **$(182,634)** | **16%** | - Research segment revenues increased **6%** in 2022, driven by a **9% increase in research product revenues** (due to 2021's strong **CV** growth), but partially offset by a **12% decrease in consulting product revenues** within this segment as analysts shifted focus to **CV products**. Research segment expenses increased **13%** due to higher compensation and travel[119](index=119&type=chunk)[120](index=120&type=chunk) - Consulting segment revenues increased **2%** due to demand for content marketing and strategy offerings. Expenses rose **10%** due to increased compensation and professional services[120](index=120&type=chunk)[121](index=121&type=chunk) - Event segment revenues surged **139%** due to increased sponsorship and paid ticket attendance from the return of in-person events. Expenses increased **72%** accordingly[122](index=122&type=chunk) [Liquidity and Capital Resources](index=20&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses Forrester's cash flow, debt obligations, and overall financial resources and liquidity - Operations are primarily financed through funds generated from operations, with research revenues (**66% of 2022 revenues**) typically renewable annually and payable in advance[124](index=124&type=chunk) Cash Flow from Operating Activities | Year | Net Cash Provided (in millions) | |---|---| | 2022 | $39.4 | | 2021 | $107.1 | | **Change (2022 vs 2021)** | **$(67.6)** | - The **$67.6 million decrease in cash from operations** in 2022 was primarily due to a **$50.9 million decrease** from accounts receivable and deferred revenue (due to high client billings in 2021 not recurring) and a **$26.5 million increase** in cash used for accrued expenses (year-end incentive compensation payout)[124](index=124&type=chunk) Cash Flow from Investing Activities | Year | Net Cash Used (in millions) | |---|---| | 2022 | $6.8 | | 2021 | $29.3 | | **Change (2022 vs 2021)** | **$(22.5)** | - Investing activities in 2022 included **$5.7 million** for property and equipment purchases and **$1.4 million** in net marketable investments[125](index=125&type=chunk) Cash Flow from Financing Activities | Year | Net Cash Used (in millions) | |---|---| | 2022 | $38.9 | | 2021 | $49.1 | | **Change (2022 vs 2021)** | **$(10.2)** | - Financing activities in 2022 included **$25.0 million** in discretionary repayments of the revolving credit facility and **$15.1 million** for common stock repurchases[127](index=127&type=chunk) - As of December 31, 2022, the company had **$50.0 million outstanding** on its **$150.0 million revolving credit facility**, which matures in December 2026. The company was in full compliance with all loan covenants[128](index=128&type=chunk)[129](index=129&type=chunk)[130](index=130&type=chunk) - As of December 31, 2022, cash, cash equivalents, and marketable investments totaled **$123.3 million**, with **$81.4 million held outside the U.S**. The company intends to permanently reinvest foreign funds and believes current liquidity is sufficient for the next twelve months and long-term cash requirements[133](index=133&type=chunk) [Recent Accounting Pronouncements](index=21&type=section&id=Recent%20Accounting%20Pronouncements) This section refers to the notes for a description of recent accounting pronouncements affecting the company - The company refers to Note 1 – Summary of Significant Accounting Policies for a full description of recent accounting pronouncements[135](index=135&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=22&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Forrester manages market risks from foreign currency and variable interest rates on its **$50.0 million** debt, with minimal investment portfolio impact - The company is exposed to market risk from changes in foreign currency exchange rates (Euro, British Pound, etc.) and interest rates on its variable-rate debt[136](index=136&type=chunk)[137](index=137&type=chunk) - Foreign currency exchange losses were **$0.2 million** in 2022, down from **$1.4 million** in 2021. The company uses foreign currency forward contracts to mitigate these risks[137](index=137&type=chunk)[138](index=138&type=chunk) - As of December 31, 2022, all **$50.0 million of outstanding debt** was based on a floating interest rate. A hypothetical **25 basis point change** in interest rates would alter annual pretax interest expense by approximately **$0.1 million**[138](index=138&type=chunk)[139](index=139&type=chunk) - The investment portfolio, consisting of cash equivalents and marketable investments (U.S. government agencies, corporate notes, etc.), aims to preserve principal and maintain liquidity. Given short maturities and investment-grade quality, a **10% change in interest rates** is not expected to materially affect the fair value of cash and cash equivalents[140](index=140&type=chunk) Marketable Investment Portfolio by Maturity (as of December 31, 2022, in thousands) | Maturity Year | Corporate Obligations (in thousands) | Federal Obligations (in thousands) | Total (in thousands) | |---|---|---|---| | 2023 | $11,982 | — | $11,982 | | 2024 | $3,815 | $1,985 | $5,800 | | 2025 | $1,906 | — | $1,906 | | **Weighted average interest rates** | **3.45% (2023)** | **2.88% (2024)** | **2.53% (2025)** | [Item 8. Consolidated Financial Statements and Supplementary Data](index=23&type=section&id=Item%208.%20Consolidated%20Financial%20Statements%20and%20Supplementary%20Data) This section presents Forrester's audited consolidated financial statements and supplementary data, with an **unqualified audit opinion** from PricewaterhouseCoopers LLP - PricewaterhouseCoopers LLP issued an **unqualified opinion** on the consolidated financial statements and the effectiveness of internal control over financial reporting as of December 31, 2022[149](index=149&type=chunk)[150](index=150&type=chunk) - A **critical audit matter** identified was **Revenue Recognition – Identification of Distinct Performance Obligations**, due to the significant audit effort required to evaluate management's judgments in identifying distinct performance obligations within customer contracts[157](index=157&type=chunk)[158](index=158&type=chunk) [Report of Independent Registered Public Accounting Firm](index=24&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) PricewaterhouseCoopers LLP issued an **unqualified opinion** on Forrester's consolidated financial statements and internal control over financial reporting - PricewaterhouseCoopers LLP audited the consolidated financial statements and internal control over financial reporting, issuing an **unqualified opinion** for both as of December 31, 2022[149](index=149&type=chunk)[150](index=150&type=chunk) - The **critical audit matter** identified was '**Revenue Recognition – Identification of Distinct Performance Obligations**,' highlighting the significant judgment required by management and the extensive audit effort to evaluate the identification of distinct performance obligations in contracts[157](index=157&type=chunk)[158](index=158&type=chunk) [Consolidated Balance Sheets](index=26&type=section&id=Consolidated%20Balance%20Sheets) This section presents Forrester's consolidated financial position, detailing assets, liabilities, and stockholders' equity Consolidated Balance Sheet (in thousands) | Asset/Liability/Equity | December 31, 2022 (in thousands) | December 31, 2021 (in thousands) | |---|---|---| | **ASSETS** | | | | Cash and cash equivalents | $103,629 | $115,769 | | Marketable investments | $19,688 | $18,509 | | Accounts receivable, net | $73,345 | $86,965 | | Deferred commissions | $24,559 | $29,631 | | Prepaid expenses and other current assets | $14,069 | $18,614 | | **Total current assets** | **$235,290** | **$269,488** | | Property and equipment, net | $23,208 | $28,245 | | Operating lease right-of-use assets | $49,970 | $65,009 | | Goodwill | $242,149 | $244,994 | | Intangible assets, net | $49,504 | $62,733 | | Other assets | $8,317 | $9,660 | | **Total assets** | **$608,438** | **$680,129** | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Accounts payable | $361 | $840 | | Accrued expenses and other current liabilities | $91,007 | $97,800 | | Deferred revenue | $178,021 | $213,696 | | **Total current liabilities** | **$269,389** | **$312,336** | | Long-term debt | $50,000 | $75,000 | | Non-current operating lease liabilities | $50,751 | $65,038 | | Other non-current liabilities | $16,642 | $23,848 | | **Total liabilities** | **$386,782** | **$476,222** | | **Total stockholders' equity** | **$221,656** | **$203,907** | | **Total liabilities and stockholders' equity** | **$608,438** | **$680,129** | [Consolidated Statements of Income](index=27&type=section&id=Consolidated%20Statements%20of%20Income) This section presents Forrester's consolidated revenues, expenses, and net income for the reported periods Consolidated Statements of Income (in thousands, except per share data) | Metric | 2022 (in thousands) | 2021 (in thousands) | 2020 (in thousands) | |---|---|---|---| | **Revenues:** | | | | | Research | $354,453 | $325,340 | $301,544 | | Consulting | $152,587 | $156,114 | $137,303 | | Events | $30,747 | $12,861 | $10,137 | | **Total revenues** | **$537,787** | **$494,315** | **$448,984** | | **Operating expenses:** | | | | | Cost of services and fulfillment | $223,773 | $201,815 | $180,899 | | Selling and marketing | $181,940 | $170,949 | $166,200 | | General and administrative | $67,655 | $58,056 | $50,369 | | Depreciation | $9,269 | $9,390 | $9,879 | | Amortization of intangible assets | $13,161 | $15,129 | $19,683 | | Integration costs | — | $334 | $5,779 | | Restructuring costs | $9,335 | — | — | | **Total operating expenses** | **$505,133** | **$455,673** | **$432,809** | | **Income from operations** | **$32,654** | **$38,642** | **$16,175** | | Interest expense | $(2,461) | $(4,222) | $(5,340) | | Other income (expense), net | $222 | $(1,229) | $(374) | | Gains on investments, net | $309 | — | $2,472 | | Income before income taxes | $30,724 | $33,191 | $12,933 | | Income tax expense | $8,918 | $8,347 | $2,943 | | **Net income** | **$21,806** | **$24,844** | **$9,990** | | Basic income per common share | $1.15 | $1.30 | $0.53 | | Diluted income per common share | $1.14 | $1.28 | $0.53 | | Basic weighted average common shares outstanding | 18,967 | 19,110 | 18,827 | | Diluted weighted average common shares outstanding | 19,172 | 19,357 | 18,935 | [Consolidated Statements of Comprehensive Income](index=28&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) This section presents Forrester's comprehensive income, including net income and other comprehensive income components Consolidated Statements of Comprehensive Income (in thousands) | Metric | 2022 (in thousands) | 2021 (in thousands) | 2020 (in thousands) | |---|---|---|---| | Net income | $21,806 | $24,844 | $9,990 | | **Other comprehensive income (loss), net of tax:** | | | | | Foreign currency translation | $(4,807) | $(3,083) | $4,884 | | Net change in market value of interest rate swap | $212 | $609 | $(717) | | Net change in market value of investments | $(134) | $(25) | — | | **Other comprehensive income (loss)** | **$(4,729)** | **$(2,499)** | **$4,167** | | **Comprehensive income** | **$17,077** | **$22,345** | **$14,157** | [Consolidated Statements of Stockholders' Equity](index=29&type=section&id=Consolidated%20Statements%20of%20Stockholders%27%20Equity) This section details changes in Forrester's stockholders' equity, including common stock, retained earnings, and treasury stock Consolidated Statements of Stockholders' Equity (in thousands) | Metric | December 31, 2022 (in thousands) | December 31, 2021 (in thousands) | December 31, 2020 (in thousands) | |---|---|---|---| | Common Stock ($0.01 Par Value) | $244 | $241 | $236 | | Additional Paid-in Capital | $261,766 | $245,985 | $230,128 | | Retained Earnings | $174,631 | $152,825 | $127,981 | | Treasury Stock (Cost) | $(207,067) | $(191,955) | $(171,889) | | Accumulated Other Comprehensive Loss | $(7,918) | $(3,189) | $(690) | | **Total Stockholders' Equity** | **$221,656** | **$203,907** | **$185,766** | - Key changes in 2022 include an increase in additional paid-in capital by **$15.8 million** (driven by stock-based compensation expense of **$14.5 million**), an increase in retained earnings by **$21.8 million** (net income), and an increase in treasury stock cost by **$15.1 million** (repurchases of common stock)[171](index=171&type=chunk) [Consolidated Statements of Cash Flows](index=30&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section presents Forrester's cash flows from operating, investing, and financing activities Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | 2022 (in thousands) | 2021 (in thousands) | 2020 (in thousands) | |---|---|---|---| | Net cash provided by operating activities | $39,425 | $107,067 | $47,754 | | Net cash used in investing activities | $(6,814) | $(29,296) | $(4,570) | | Net cash used in financing activities | $(38,871) | $(49,143) | $(23,687) | | Effect of exchange rate changes on cash | $(6,117) | $(1,249) | $1,963 | | **Net increase (decrease) in cash, cash equivalents and restricted cash** | **$(12,377)** | **$27,379** | **$21,460** | | Cash, cash equivalents and restricted cash, beginning of year | $118,031 | $90,652 | $69,192 | | **Cash, cash equivalents and restricted cash, end of year** | **$105,654** | **$118,031** | **$90,652** | | Cash paid for interest | $2,015 | $3,279 | $4,373 | | Cash paid for income taxes | $8,901 | $9,815 | $3,194 | - Net cash from operating activities decreased significantly in 2022 to **$39.4 million** from **$107.1 million** in 2021, primarily due to a **$50.9 million decrease** in cash generated from accounts receivable and deferred revenue and a **$26.5 million increase** in cash used for accrued expenses[124](index=124&type=chunk)[174](index=174&type=chunk) - Net cash used in investing activities decreased to **$6.8 million** in 2022 from **$29.3 million** in 2021, mainly due to lower net purchases of marketable investments and property and equipment[125](index=125&type=chunk)[126](index=126&type=chunk)[174](index=174&type=chunk) - Net cash used in financing activities decreased to **$38.9 million** in 2022 from **$49.1 million** in 2021, driven by lower debt repayments and common stock repurchases[127](index=127&type=chunk)[174](index=174&type=chunk) [Notes to Consolidated Financial Statements](index=31&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed disclosures on Forrester's significant accounting policies and specific financial statement accounts [Note 1 – Summary of Significant Accounting Policies](index=31&type=section&id=Note%201%20%E2%80%93%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines Forrester's significant accounting policies, including revenue recognition, impairment, and income taxes - Forrester Research, Inc. is a global independent research and advisory firm, with consolidated financial statements prepared in accordance with GAAP and SEC rules[177](index=177&type=chunk)[178](index=178&type=chunk) - Significant accounting estimates include revenue recognition, goodwill and intangible asset impairment, and income taxes[180](index=180&type=chunk) - The company adopted ASU No. 2019-12 (Income Taxes) and ASU No. 2016-13 (Credit Losses) in 2021 and 2020, respectively. The adoption of Topic 326 resulted in a **$0.2 million decrease** to retained earnings[181](index=181&type=chunk)[182](index=182&type=chunk) - Revenue recognition follows a five-step model, identifying performance obligations and allocating transaction prices based on standalone selling prices. Revenue is recognized when control of products or services is transferred to the customer[205](index=205&type=chunk)[209](index=209&type=chunk) - Research revenues are primarily recognized ratably over the contract term. Consulting project revenues are recognized over time using an input method (hours expended), while advisory services and event revenues are recognized at a point in time (completion of service/event)[210](index=210&type=chunk)[212](index=212&type=chunk)[213](index=213&type=chunk)[214](index=214&type=chunk) - Deferred revenue represents billings in excess of recognized revenue. As of December 31, 2022, approximately **$416.8 million of revenue** is expected to be recognized from remaining performance obligations over the next 24 months[221](index=221&type=chunk)[222](index=222&type=chunk) - Commissions paid to sales representatives are capitalized as deferred commissions and amortized over the initial contract term. Amortization expense was **$45.9 million** in 2022[223](index=223&type=chunk)[225](index=225&type=chunk) - All leases are operating leases, primarily for office space. Operating lease ROU assets and liabilities are recognized based on the present value of future minimum lease payments. Total lease cost was **$19.7 million** in 2022[226](index=226&type=chunk)[227](index=227&type=chunk)[230](index=230&type=chunk)[261](index=261&type=chunk) - Stock-based compensation expense was **$14.5 million** in 2022. The unamortized fair value of stock-based awards was **$24.2 million** as of December 31, 2022, with a weighted average remaining recognition period of **2.4 years**[235](index=235&type=chunk)[236](index=236&type=chunk) - Depreciation and amortization of property and equipment are computed using the straight-line method. Amortization of intangible assets is computed using an accelerated method[237](index=237&type=chunk)[238](index=238&type=chunk) - The effective tax rate was **29.0% in 2022**, up from **25.1% in 2021**, primarily due to increased non-deductible stock compensation and foreign subsidiary income subject to U.S. tax[240](index=240&type=chunk)[241](index=241&type=chunk)[279](index=279&type=chunk) - Basic and diluted net income per common share were **$1.15** and **$1.14**, respectively, in 2022[242](index=242&type=chunk)[243](index=243&type=chunk) [Note 2 – Marketable Investments](index=39&type=section&id=Note%202%20%E2%80%93%20Marketable%20Investments) This note details Forrester's marketable investments, classified as available-for-sale securities, and their fair value measurements Marketable Investments (as of December 31, 2022, in thousands) | Category | Amortized Cost (in thousands) | Gross Unrealized Gains (in thousands) | Gross Unrealized Losses (in thousands) | Market Value (in thousands) | |---|---|---|---|---| | Corporate obligations | $17,900 | $8 | $(205) | $17,703 | | Federal agency obligations | $1,999 | — | $(14) | $1,985 | | **Total** | **$19,899** | **$8** | **$(219)** | **$19,688** | - Marketable investments are classified as available-for-sale securities and carried at fair value, with unrealized gains and losses recorded in accumulated other comprehensive loss. No realized gains or losses were recorded in 2022 or 2021[192](index=192&type=chunk)[193](index=193&type=chunk) Marketable Investments by Maturity (as of December 31, 2022, in thousands) | Maturity Year | Corporate Obligations (in thousands) | Federal Agency Obligations (in thousands) | Total (in thousands) | |---|---|---|---| | 2023 | $11,982 | — | $11,982 | | 2024 | $3,816 | $1,985 | $5,801 | | 2025 | $1,905 | — | $1,905 | | **Total** | **$17,703** | **$1,985** | **$19,688** | [Note 3 – Goodwill and Other Intangible Assets](index=40&type=section&id=Note%203%20%E2%80%93%20Goodwill%20and%20Other%20Intangible%20Assets) This note provides information on Forrester's goodwill and amortizable intangible assets, including impairment testing and amortization Goodwill by Segment (in thousands) | Segment | December 31, 2022 (in thousands) | December 31, 2021 (in thousands) | |---|---|---| | Research | $234,020 | $236,770 | | Consulting | $8,129 | $8,224 | | **Total Goodwill** | **$242,149** | **$244,994** | - **Goodwill** decreased by **$2.8 million** in 2022, primarily due to translation adjustments. The annual impairment test as of November 30, 2022, concluded no impairments[250](index=250&type=chunk) Amortizable Intangible Assets (as of December 31, 2022, in thousands) | Category | Gross Carrying Amount (in thousands) | Accumulated Amortization (in thousands) | Net Carrying Amount (in thousands) | |---|---|---|---| | Customer relationships | $77,786 | $33,805 | $43,981 | | Technology | $16,803 | $14,696 | $2,107 | | Trademarks | $12,472 | $9,056 | $3,416 | | **Total** | **$107,061** | **$57,557** | **$49,504** | - Amortization expense for intangible assets was **$13.2 million** in 2022, and is estimated to be **$11.9 million** for 2023[251](index=251&type=chunk) [Note 4 – Debt](index=41&type=section&id=Note%204%20%E2%80%93%20Debt) This note describes Forrester's debt obligations, including its revolving credit facility and compliance with covenants - On December 21, 2021, the company amended its credit facility, increasing the revolving credit facility to **$150.0 million**, eliminating the term loan, and extending maturity to December 2026[252](index=252&type=chunk)[253](index=253&type=chunk) - The amendment reduced applicable margins for revolving loans and commitment fees, replaced the minimum fixed charge coverage ratio with a minimum consolidated interest coverage ratio of **3.50:1.00**, and included a capital expenditure limit[253](index=253&type=chunk) Outstanding Borrowings (in thousands) | Description | December 31, 2022 (in thousands) | December 31, 2021 (in thousands) | |---|---|---| | Revolving credit facility | $50,000 | $75,000 | | **Total** | **$50,000** | **$75,000** | - The contractual annualized interest rate on the revolving credit facility was **5.6875%** as of December 31, 2022. The weighted average annual effective rate on total debt was **2.9%** in 2022[259](index=259&type=chunk) - The company was in full compliance with all restrictive loan covenants as of December 31, 2022[259](index=259&type=chunk) [Note 5 – Leases](index=42&type=section&id=Note%205%20%E2%80%93%20Leases) This note details Forrester's operating lease arrangements, lease costs, and future minimum lease payments Components of Lease Expense (in thousands) | Expense Category | 2022 (in thousands) | 2021 (in thousands) | 2020 (in thousands) | |---|---|---|---| | Operating lease cost | $14,284 | $15,527 | $16,188 | | Short-term lease cost | $754 | $439 | $330 | | Variable lease cost | $5,416 | $5,582 | $1,871 | | Sublease income | $(746) | $(549) | $(256) | | **Total lease cost** | **$19,708** | **$20,999** | **$18,133** | - Cash paid for operating lease liabilities was **$12.9 million** in 2022. The weighted-average remaining lease term for operating leases was **5.1 years**, with a weighted-average discount rate of **4.3%**[262](index=262&type=chunk) Future Minimum Lease Payments (as of December 31, 2022, in thousands) | Year | Operating Lease Payments (in thousands) | |---|---| | 2023 | $16,463 | | 2024 | $16,027 | | 2025 | $14,074 | | 2026 | $12,118 | | 2027 | $5,589 | | Thereafter | $8,728 | | **Total lease payments** | **$72,999** | | Less imputed interest | $(8,616) | | **Present value of lease liabilities** | **$64,383** | - In 2022, the company recorded **$3.7 million of ROU asset impairments** and **$1.3 million of leasehold improvement impairments** related to closing office space in San Francisco, included in restructuring costs[264](index=264&type=chunk) [Note 6 – Derivatives and Hedging](index=44&type=section&id=Note%206%20%E2%80%93%20Derivatives%20and%20Hedging) This note explains Forrester's use of derivative contracts to manage interest rate and foreign currency risks - The company uses derivative contracts (interest rate swaps and foreign currency forwards) to mitigate cash flow risk from interest rate changes on variable debt and foreign exchange rate fluctuations[266](index=266&type=chunk) - An interest rate swap contract, designated as a cash flow hedge, matured on December 31, 2022. Changes in its fair value were recorded in accumulated other comprehensive loss[267](index=267&type=chunk)[268](index=268&type=chunk) - Foreign currency forward exchange contracts are used to mitigate adverse fluctuations in foreign currency rates. These are not designated as hedges for accounting purposes, with gains and losses recorded in other income (expense), net[269](index=269&type=chunk) Amounts Recognized in Consolidated Statements of Income for Derivative Contracts (in thousands) | Expense Category | 2022 (in thousands) | 2021 (in thousands) | 2020 (in thousands) | |---|---|---|---| | Interest expense (from interest rate swap) | $(103) | $(807) | $(858) | | Other income (expense), net (net realized losses on foreign currency forward contracts) | $(194) | $(90) | $(157) | | **Total** | **$(297)** | **$(897)** | **$(1,015)** | [Note 7 – Fair Value Measurements](index=44&type=section&id=Note%207%20%E2%80%93%20Fair%20Value%20Measurements) This note describes Forrester's fair value measurements for financial assets and liabilities, categorized by hierarchy levels - Financial assets and liabilities measured at fair value are classified into Level 1 (quoted prices in active markets), Level 2 (observable inputs other than Level 1), or Level 3 (unobservable inputs)[273](index=273&type=chunk)[274](index=274&type=chunk)[275](index=275&type=chunk) Fair Value Hierarchy for Financial Assets and Liabilities (as of December 31, 2022, in thousands) | Category | Level 1 (in thousands) | Level 2 (in thousands) | Total (in thousands) | |---|---|---|---| | **Assets:** | | | | | Money market funds | $5,800 | — | $5,800 | | Marketable investments | — | $19,688 | $19,688 | | **Total Assets** | **$5,800** | **$19,688** | **$25,488** | | **Liabilities:** | | | | | Interest rate swap | — | $(294) | $(294) | | **Total Liabilities** | **—** | **$(294)** | **$(294)** | - Marketable investments are valued using third-party pricing services and observable market inputs (Level 2). The interest rate swap's fair value is based on mark-to-market valuations from a third-party broker using observable interest rates (Level 2)[276](index=276&type=chunk) - Level 3 activity consisted entirely of contingent purchase price related to the FeedbackNow acquisition, which was fully settled by December 31, 2020[277](index=277&type=chunk)[278](index=278&type=chunk) [Note 8 – Income Taxes](index=46&type=section&id=Note%208%20%E2%80%93%20Income%20Taxes) This note provides details on Forrester's income tax expense, effective tax rate, deferred taxes, and net operating loss carryforwards Income Before Income Taxes (in thousands) | Category | 2022 (in thousands) | 2021 (in thousands) | 2020 (in thousands) | |---|---|---|---| | Domestic | $16,552 | $22,424 | $7,237 | | Foreign | $14,172 | $10,767 | $5,696 | | **Total** | **$30,724** | **$33,191** | **$12,933** | Components of Income Tax Expense (in thousands) | Category | 2022 (in thousands) | 2021 (in thousands) | 2020 (in thousands) | |---|---|---|---| | Current | $15,570 | $8,622 | $4,620 | | Deferred | $(6,652) | $(275) | $(1,677) | | **Income tax expense** | **$8,918** | **$8,347** | **$2,943** | Effective Tax Rate Reconciliation | Factor | 2022 (%) | 2021 (%) | 2020 (%) | |---|---|---|---| | Income tax provision at federal statutory rate | 21.0% | 21.0% | 21.0% | | State tax provision, net of federal benefit | 5.2% | 3.8% | 2.6% | | Foreign tax rate differential | (0.5%) | (0.4%) | (0.2%) | | Stock compensation | 0.9% | (0.4%) | 5.7% | | Withholding taxes | 1.7% | 1.3% | 3.3% | | Non-deductible expenses | 1.5% | — | 2.2% | | Change in valuation allowance | 1.0% | — | (5.8%) | | Foreign subsidiary income subject to U.S. tax | 0.6% | (0.5%) | (4.3%) | | Change in tax legislation | (1.6%) | (0.3%) | (1.9%) | | Other, net | (0.8%) | 0.6% | 0.2% | | **Effective tax rate** | **29.0%** | **25.1%** | **22.8%** | - The effective tax rate increased in 2022 primarily due to increased non-deductible stock compensation, higher foreign subsidiary income subject to U.S. tax, and non-deductible expenses, partially offset by a tax legislation benefit[279](index=279&type=chunk) - As of December 31, 2022, the company had a net deferred tax liability of **$13.4 million** and maintained a valuation allowance of **$1.0 million**, primarily related to foreign net operating loss carryforwards[281](index=281&type=chunk)[285](index=285&type=chunk) - The company has foreign net operating loss carryforwards of approximately **$18.9 million**, which can be carried forward indefinitely[282](index=282&type=chunk) - As of December 31, 2022, the company had no significant unrecognized tax benefits and no jurisdictions under audit[287](index=287&type=chunk)[289](index=289&type=chunk) [Note 9 – Stockholders' Equity](index=48&type=section&id=Note%209%20%E2%80%93%20Stockholders%27%20Equity) This note details Forrester's common stock, stock repurchase program, equity incentive plans, and accumulated other comprehensive loss - The Board of Directors has authorized **$585.0 million** for common stock repurchases, with **$510.0 million** used to repurchase approximately **17.0 million shares** as of December 31, 2022[291](index=291&type=chunk) - The company does not currently pay cash dividends on its common stock[292](index=292&type=chunk) - The Equity Incentive Plan, running until May 2026, provides for stock-based awards (ISOs, NSOs, RSUs). As of December 31, 2022, approximately **1.4 million shares** were available for future grant[293](index=293&type=chunk) Restricted Stock Unit (RSU) Activity (in thousands, except per share data) | Metric | Number of Shares (in thousands) | Weighted Average Grant Date Fair Value | |---|---|---| | Unvested at December 31, 2021 | 634 | $42.45 | | Granted | 355 | $50.37 | | Vested | (230) | $42.45 | | Forfeited | (77) | $44.99 | | **Unvested at December 31, 2022** | **682** | **$46.28** | Stock Option Activity (in thousands, except per share data) | Metric | Number of Shares (in thousands) | Weighted Average Exercise Price Per Share | |---|---|---| | Outstanding at December 31, 2021 | 114 | $35.52 | | Exercised | (23) | $35.35 | | Forfeited | (2) | $34.91 | | **Outstanding at December 31, 2022** | **89** | **$35.58** | | Vested and Exercisable at December 31, 2022 | 89 | $35.58 | - The Employee Stock Purchase Plan allows eligible employees to purchase common stock at a discount. As of December 31, 2022, approximately **0.7 million shares** remain available for issuance under the plan[299](index=299&type=chunk) Accumulated Other Comprehensive Loss (AOCL) Components (in thousands) | Component | December 31, 2022 (in thousands) | December 31, 2021 (in thousands) | December 31, 2020 (in thousands) | |---|---|---|---| | Marketable Investments | $(159) | $(25) | — | | Interest Rate Swap | — | $(212) | $(821) | | Translation Adjustment | $(7,759) | $(2,952) | $131 | | **Total AOCL** | **$(7,918)** | **$(3,189)** | **$(690)** | - The increase in AOCL in 2022 was primarily due to foreign currency translation losses of **$4.8 million**[301](index=301&type=chunk) [Note 10 – Employee Pension Plans](index=50&type=section&id=Note%2010%20%E2%80%93%20Employee%20Pension%20Plans) This note describes Forrester's defined contribution employee pension plans and related contributions - Forrester sponsors several defined contribution plans for eligible employees. Contributions totaled approximately **$8.2 million** in 2022, up from **$6.5 million** in 2021[302](index=302&type=chunk) [Note 11 – Restructuring](index=50&type=section&id=Note%2011%20%E2%80%93%20Restructuring) This note details restructuring costs incurred in Q4 2022, including office space impairment and severance expenses - In Q4 2022, the company incurred **$9.3 million in restructuring costs**, including **$5.0 million** for office space impairment (ROU asset and leasehold improvements) and **$4.3 million** for severance related to a **4% workforce reduction** in January 2023[303](index=303&type=chunk) - Approximately all **$4.3 million of severance** and related benefit costs incurred in 2022 are expected to be paid in 2023[304](index=304&type=chunk) [Note 12 – Non-Marketable Investments](index=51&type=section&id=Note%2012%20%E2%80%93%20Non-Marketable%20Investments) This note provides information on Forrester's non-marketable investments, primarily in technology-related private equity funds - Non-marketable investments, primarily interests in technology-related private equity funds, had a carrying value of **$0.9 million** as of December 31, 2022[305](index=305&type=chunk) - These investments are accounted for using the equity method. The company recorded **$0.3 million in gains** from non-marketable investments in 2022[306](index=306&type=chunk) [Note 13 – Operating Segment and Enterprise Wide Reporting](index=51&type=section&id=Note%2013%20%E2%80%93%20Operating%20Segment%20and%20Enterprise%20Wide%20Reporting) This note details Forrester's reportable segments (Research, Consulting, Events) and revenue breakdown by geographic destination - The company operates in three reportable segments: Research, Consulting, and Events. Segment performance is evaluated based on revenues and direct expenses[308](index=308&type=chunk)[312](index=312&type=chunk) Total Segment Revenues (in thousands) | Segment | 2022 (in thousands) | 2021 (in thousands) | 2020 (in thousands) | |---|---|---|---| | Research | $396,012 | $372,587 | $351,950 | | Consulting | $111,028 | $108,867 | $86,897 | | Events | $30,747 | $12,861 | $10,137 | | **Consolidated Total** | **$537,787** | **$494,315** | **$448,984** | Revenues by Geographic Destination (2022, 2021, 2020, in thousands and as % of total) | Region | 2022 Revenue (in thousands) | 2022 (%) | 2021 Revenue (in thousands) | 2021 (%) | 2020 Revenue (in thousands) | 2020 (%) | |---|---|---|---|---|---|---| | United States | $426,041 | 79% | $381,662 | 77% | $356,288 | 79% | | Europe (excluding UK) | $36,664 | 7% | $41,264 | 9% | $34,897 | 8% | | United Kingdom | $20,079 | 4% | $21,913 | 5% | $15,741 | 4% | | Canada | $20,759 | 4% | $17,213 | 3% | $14,005 | 3% | | Asia Pacific | $26,548 | 5% | $26,768 | 5% | $22,969 | 5% | | Other | $7,696 | 1% | $5,495 | 1% | $5,084 | 1% | | **Total** | **$537,787** | **100%** | **$494,315** | **100%** | **$448,984** | **100%** | [Note 14 – Certain Balance Sheet Accounts](index=54&type=section&id=Note%2014%20%E2%80%93%20Certain%20Balance%20Sheet%20Accounts) This note provides detailed breakdowns of specific balance sheet accounts, including property and equipment, and accrued liabilities Property and Equipment, Net (in thousands) | Category | December 31, 2022 (in thousands) | December 31, 2021 (in thousands) | |---|---|---| | Computers and equipment | $14,303 | $15,751 | | Computer software | $34,903 | $39,858 | | Furniture and fixtures | $9,745 | $10,896 | | Leasehold improvements | $30,285 | $31,697 | | Total property and equipment | $89,236 | $98,202 | | Less accumulated depreciation | $(66,028) | $(69,957) | | **Total property and equipment, net** | **$23,208** | **$28,245** | - Amortization of capitalized internal use software costs was **$4.8 million** in 2022[316](index=316&type=chunk) Accrued Expenses and Other Current Liabilities (in thousands) | Category | December 31, 2022 (in thousands) | December 31, 2021 (in thousands) | |---|---|---| | Payroll and related benefits | $53,581 | $61,979 | | Taxes | $5,823 | $4,731 | | Lease liability | $13,632 | $12,992 | | Other | $17,971 | $18,098 | | **Total** | **$91,007** | **$97,800** | Non-Current Liabilities (in thousands) | Category | December 31, 2022 (in thousands) | December 31, 2021 (in thousands) | |---|---|---| | Deferred tax liability | $14,133 | $21,346 | | Other | $2,509 | $2,502 | | **Total** | **$16,642** | **$23,848** | Allowance for Doubtful Accounts (in thousands) | Metric | 2022 (in thousands) | 2021 (in thousands) | 2020 (in thousands) | |---|---|---|---| | Balance, beginning of year | $610 | $708 | $628 | | Provision for doubtful accounts | $638 | $225 | $721 | | Write-offs | $(669) | $(318) | $(850) | | **Balance, end of year** | **$560** | **$610** | **$708** | [Note 15 – Contingencies](index=55&type=section&id=Note%2015%20%E2%80%93%20Contingencies) This note discusses Forrester's legal contingencies and the management's assessment of their potential financial impact - The company is subject to legal proceedings and civil/regulatory claims in the ordinary course of business. Accruals are recorded when a liability is probable and estimable[320](index=320&type=chunk) - Management believes current lawsuits and claims are not expected to have a material adverse effect on the company's financial position, results of operations, or cash flows, despite potential defense and settlement costs[321](index=321&type=chunk)[322](index=322&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=55&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) This item is not applicable, indicating no changes in or disagreements with accountants on accounting and financial disclosure - Not applicable[324](index=324&type=chunk) [Item 9A. Controls and Procedures](index=55&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management and auditors concluded Forrester's disclosure controls and internal control over financial reporting were effective as of December 31, 2022 - Disclosure controls and procedures were evaluated and deemed effective as of December 31, 2022[325](index=325&type=chunk) - Management assessed and concluded that the company's internal control over financial reporting was effective as of December 31, 2022, based on the **COSO 2013 framework**[326](index=326&type=chunk)[327](index=327&type=chunk) - PricewaterhouseCoopers LLP audited and attested to the effectiveness of internal control over financial reporting[328](index=328&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended December 31, 2022[329](index=329&type=chunk) [Item 9B. Other Information](index=56&type=section&id=Item%209B.%20Other%20Information) Forrester's Board of Directors approved a bylaw amendment on March 8, 2023, to clarify procedures for advance notice and director nominations - On March 8, 2023, the Board of Directors approved an amendment to the company's bylaws to clarify procedures for advance notice bylaws and director nominations under Rule 14a-19[330](index=330&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=55&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to Forrester Research, Inc - Not applicable[332](index=332&type=chunk) PART III This section provides information on Forrester's directors, executive officers, corporate governance, compensation, and security ownership [Item 10. Directors, Executive Officers, and Corporate Governance](index=57&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%2C%20and%20Corporate%20Governance) This section lists Forrester's executive officers, references its Code of Business Conduct, and incorporates governance details from the 2023 Proxy Statement - The executive officers as of March 10, 2023, include George F. Colony (Chairman & CEO), Ryan D. Darrah (Chief Legal Officer), L. Christian Finn (CFO), Carrie Johnson (Chief Product Officer), Mike Kasparian (CIO), Sharyn Leaver (Chief Research Officer), Sarah Le Roy (Chief People Officer), Shirley Macbeth (Chief Marketing Officer), Steven Peltzman (Chief Business Technology Officer), and Nate Swan (Chief Sales Officer)[335](index=335&type=chunk)[336](index=336&type=chunk)[337](index=337&type=chunk)[338](index=338&type=chunk)[339](index=339&type=chunk)[340](index=340&type=chunk)[341](index=341&type=chunk)[342](index=342&type=chunk)[343](index=343&type=chunk) - The company's Code of Business Conduct and Ethics covers all employees, officers, and directors and is available on its website[344](index=344&type=chunk)[345](index=345&type=chunk) - Disclosures regarding amendments to or waivers from the Code of Business Conduct and Ethics will be posted on the company's website[347](index=347&type=chunk) - Further information on director elections and Section 16(a) Beneficial Ownership Reporting Compliance is incorporated by reference from the 2023 Proxy Statement[348](index=348&type=chunk) [Item 11. Executive Compensation](index=59&type=section&id=Item%2011.%20Executive%20Compensation) Executive compensation details are incorporated by reference from the company's 2023 Proxy Statement - Executive compensation details are incorporated by reference from the 2023 Proxy Statement under 'Director Compensation' and 'Executive Compensation'[349](index=349&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=59&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section incorporates security ownership data from the 2023 Proxy Statement, detailing outstanding and available shares under equity plans - Information on security ownership of certain beneficial owners and management is incorporated by reference from the 2023 Proxy Statement[350](index=350&type=chunk) Equity Compensation Plan Summary (as of December 31, 2022) | Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights | Weighted Average Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans | |---|---|---|---| | Equity compensation plans approved by stockholders | 771,072 (includes 682,122 restricted stock units) | $35.58 | 2,136,068 (includes 1,412,830 shares under Equity Incentive Plan and 723,238 shares under Stock Purchase Plan) | | Equity compensation plans not approved by stockholders | N/A | N/A | N/A | | **Total** | **771,072** | **$35.58** | **2,136,068** | [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=59&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on related transactions and director independence is incorporated by reference from the 2023 Proxy Statement - Details on certain relationships, related transactions, and director independence are incorporated by reference from the 2023 Proxy Statement[352](index=352&type=chunk) [Item 14. Principal Accountant Fees and Services](index=59&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Principal accountant fees and services information is incorporated by reference from the 2023 Proxy Statement - Information on principal accountant fees and services is incorporated by reference from the 2023 Proxy Statement under 'Independent Auditors' Fees and Other Matters'[353](index=353&type=chunk) PART IV This section lists the exhibits and financial statement schedules filed as part of the annual report [Item 15. Exhibits and Financial Statement Schedules](index=60&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the financial statements and exhibits included in the 2022 Annual Report on Form 10-K, with a comprehensive Exhibit Index - Financial statements are filed as part of this 2022 Annual Report on Form 10-K[354](index=354&type=chunk) - A complete listing of exhibits is provided in the Exhibit Index[354](index=354&type=chunk) [Item 16. Form 10-K Summary](index=60&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable - Not applicable[355](index=355&type=chunk) [EXHIBIT INDEX](index=61&type=section&id=EXHIBIT%20INDEX) The Exhibit Index provides a comprehensive list of documents filed with the Form 10-K, including corporate governance, equity plans, and certifications - The Exhibit Index lists various documents filed with the Form 10-K, including corporate governance documents, equity plans, lease agreements, and credit agreements[358](index=358&type=chunk)[359](index=359&type=chunk)[360](index=360&type=chunk) - Key exhibits include the Agreement and Plan of Merger (2.1), Restated Certificate of Incorporation (3.1), Amended and Restated By-Laws (3.5), Amended and Restated Employee Stock Purchase Plan (10.02+), Amended and Restated Equity Incentive Plan (10.03+), Credit Agreement (10.21), and First Amendment to Credit Agreement (10.22)[358](index=358&type=chunk)[359](index=359&type=chunk)[360](index=360&type=chunk) - Certifications from the Principal Executive Officer (31.1) and Principal Financial Officer (31.2) are included, along with the Consent of PricewaterhouseCoopers LLP (23.1)[360](index=360&type=chunk)

Financial Data and Key Metrics Changes - For the full year 2022, revenue increased by 9%, adjusted operating margin was 13%, and EPS grew by 18% [12][38] - In Q4 2022, revenue was $136.9 million, a 2% increase from $133.7 million in the prior year [39] - Net income decreased by 25% to $8.5 million in Q4 2022 compared to $11.3 million in the previous year [74] - EPS decreased by 24% in Q4 to $0.45 compared to $0.59 in the year-ago quarter [74] Business Line Data and Key Metrics Changes - Forrester Decisions achieved a wallet retention rate of 101% in Q4, significantly higher than the total portfolio's 94% [8][35] - Client retention for Forrester Decisions was 89%, 15 points higher than the total portfolio [35] - Research revenues increased by 3% in Q4 and 9% for the full year [44] - Consulting revenues were $37.5 million in Q4, down 4%, and $152.6 million for the full year, down 2% [45] Market Data and Key Metrics Changes - The events business grew 139% in 2022, with Q4 revenue of $7.2 million, a 43% increase [16][41] - The company anticipates slight declines in key metrics in the first half of 2023, with a return to growth expected in the second half [17][83] Company Strategy and Development Direction - The company is focused on transitioning clients to Forrester Decisions, aiming for approximately two-thirds of contract value to be on the new platform by year-end 2023 [20][32] - Three initiatives for 2023 include enhancing Forrester Decisions, increasing sales force effectiveness, and optimizing consulting and events businesses [28][20] - The company is managing costs and driving the transition to Forrester Decisions to build a strong base for future growth [33][42] Management's Comments on Operating Environment and Future Outlook - Management expects 2023 to be a tale of two halves, with pressure on key metrics in the first half and growth returning in the second half [17][78] - The macroeconomic environment remains challenging, with ongoing inflation and potential recession impacting performance [42][82] - Confidence in the ability to navigate challenges is bolstered by strong client acceptance of Forrester Decisions [43][93] Other Important Information - The company has over $120 million in cash and investments on hand, with priorities including reinvesting in the business and exploring value-creating acquisitions [50][75] - The company plans to maintain a cautious approach to share buybacks while focusing on growth opportunities [100] Q&A Session Summary Question: What factors impacted 2022's performance? - Management identified funding pressure on smaller tech clients, inflation, and the transition to Forrester Decisions as key factors affecting performance [98] Question: What is the capital allocation strategy for 2023? - The company plans to be opportunistic regarding share buybacks and will focus on value-creating acquisitions while managing existing debt [99][100] Question: What complexities were encountered during the transition to Forrester Decisions? - The transition faced unexpected challenges, particularly with smaller tech vendors who were less willing to migrate than anticipated [106][117] Question: How is the sales team being managed amid workforce reductions? - The company clarified that the reduction in workforce did not impact quota-carrying sales representatives, and hiring will continue to enhance productivity [112][114]

Financial Data and Key Metrics Changes - Forrester's revenue grew 8% year-over-year, impacted by a two-point foreign currency headwind [11] - Margin increased, and earnings per share (EPS) rose 39% year-over-year [11][41] - Net contract value increase (NCVI) was up 7% overall, down three percentage points compared to Q2 [11] - Client retention declined to 75%, and wallet retention was down to 97% [34] Business Line Data and Key Metrics Changes - Research revenues increased by 9% compared to Q3 2021, driven by growth in contract value [33] - Consulting business revenues were flat at $37.4 million compared to the prior year [37] - Events business revenues surged 276% year-over-year, reaching $3.3 million [38] Market Data and Key Metrics Changes - The European business experienced a slowdown due to the Ukraine war and energy uncertainty, with the slowest NCVI growth among global regions [12] - The event business showed strong recovery, with record attendance and sponsorship growth [21] Company Strategy and Development Direction - The company is focused on transitioning clients to the Forrester Decisions research platform, which is expected to constitute one-third of contract value by year-end [14][27] - The strategy includes enhancing client contracts and retention through the new platform, which offers 16 different services [15][72] - The company plans to stop selling new legacy research contracts as of January 1, 2023 [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating macroeconomic challenges and emphasized the importance of financial discipline [10][22] - The company anticipates continued macroeconomic headwinds, including recession risks in 2023 [49][50] - Despite challenges, management remains optimistic about long-term growth potential driven by the Forrester Decisions platform [50][52] Other Important Information - The company has raised its margin and EPS guidance for the fourth quarter due to ongoing expense management [13][47] - Cash flow from operating activities year-to-date was $37.8 million, with capital expenditures of $4.2 million [41] - The company plans to provide annual guidance moving forward, rather than quarterly [53] Q&A Session Summary Question: Client retention and conversion rates - Management noted that client retention and wallet retention are expected to remain in the low 70s in the near term due to macroeconomic issues and the transition to Forrester Decisions [58][59] Question: Cost savings areas - Cost savings have been achieved through tighter control on travel and entertainment expenses and non-critical headcount [63] Question: Industry performance - Smaller tech clients are underperforming, while larger clients transitioning to Forrester Decisions are showing improved retention rates [66][67] Question: Hiring a new head of sales - The search for a new Chief Sales Officer is ongoing, with a focus on candidates experienced in scaling businesses and driving metrics-driven sales organizations [75][76] Question: Exposure to small tech clients - The company has some exposure to small tech clients, but it is not characterized as material [82] Question: Sales force growth expectations - The company expects to grow its sales force in 2023, but the rate will depend on macroeconomic conditions [83][85]

PART I FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Unaudited financial statements for Q3 and nine months ended September 30, 2022, show revenue and net income growth, with decreased operating cash flow and total assets [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) - As of September 30, 2022, total assets decreased to **$585.2 million** from **$680.1 million** at year-end 2021, primarily due to reductions in accounts receivable, deferred commissions, and goodwill. Total liabilities also decreased to **$371.4 million** from **$476.2 million**, driven by lower deferred revenue and long-term debt. Stockholders' equity increased to **$213.9 million**[11](index=11&type=chunk) Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | **Total Assets** | **$585,240** | **$680,129** | | Total Current Assets | $204,284 | $269,488 | | Goodwill | $238,949 | $244,994 | | **Total Liabilities** | **$371,351** | **$476,222** | | Deferred Revenue | $180,758 | $213,696 | | Long-term Debt | $50,000 | $75,000 | | **Total Stockholders' Equity** | **$213,889** | **$203,907** | [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) - For the third quarter of 2022, total revenues grew to **$127.7 million** from **$118.1 million** in Q3 2021, with net income increasing to **$5.4 million** from **$4.5 million**. For the nine-month period, revenues rose to **$400.9 million** from **$360.6 million**, and net income grew to **$23.4 million** from **$16.8 million** year-over-year[14](index=14&type=chunk) Financial Performance Summary (in thousands, except per share data) | Metric | Q3 2022 | Q3 2021 | 9 Months 2022 | 9 Months 2021 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | **$127,679** | **$118,136** | **$400,896** | **$360,587** | | Research | $87,038 | $79,876 | $262,265 | $235,846 | | Consulting | $37,382 | $37,393 | $115,075 | $116,903 | | Events | $3,259 | $867 | $23,556 | $7,838 | | **Income from Operations** | **$8,557** | **$6,539** | **$35,731** | **$27,158** | | **Net Income** | **$5,414** | **$4,522** | **$23,436** | **$16,821** | | **Diluted EPS** | **$0.28** | **$0.23** | **$1.22** | **$0.87** | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) - For the nine months ended September 30, 2022, net cash provided by operating activities was **$37.8 million**, a significant decrease from **$85.0 million** in the prior-year period. Net cash used in investing activities was **$5.7 million**, while financing activities used **$38.8 million**, primarily for debt repayment and stock repurchases[20](index=20&type=chunk) Cash Flow Summary for Nine Months Ended Sep 30 (in thousands) | Cash Flow Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $37,803 | $84,992 | | Net cash used in investing activities | ($5,719) | ($26,850) | | Net cash used in financing activities | ($38,789) | ($15,528) | | **Net change in cash, cash equivalents and restricted cash** | **($17,432)** | **$41,150** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes 11% revenue growth to Research and Events segments, despite slight declines in client retention, with increased operating expenses and solid liquidity [Key Metrics](index=22&type=section&id=Key%20Metrics) - Contract Value (CV) increased by **7%** to **$353.0 million** as of September 30, 2022, driven by increased contract bookings. However, client retention and wallet retention decreased by **3** and **2 percentage points**, respectively, attributed to higher turnover in smaller clients amid macroeconomic conditions and a product platform transition[104](index=104&type=chunk) Key Business Metrics as of September 30 | Metric | 2022 | 2021 | Change | | :--- | :--- | :--- | :--- | | Contract value | $353.0 M | $328.6 M | +7% | | Client retention | 75% | 78% | (3) points | | Wallet retention | 97% | 99% | (2) points | | Number of clients | 2,875 | 2,964 | (3%) | [Results of Operations](index=23&type=section&id=Results%20of%20Operations) - Total revenues for Q3 2022 increased **8%** (**10% constant currency**) YoY, driven by **9%** growth in Research revenues and **276%** growth in Events revenues. For the nine-month period, total revenues grew **11%** (**13% constant currency**)[108](index=108&type=chunk)[109](index=109&type=chunk) - Operating expenses rose across all categories for both the three and nine-month periods. The increases were primarily due to higher compensation and benefits from increased headcount, higher travel expenses related to the return of in-person events, and increased professional services costs[113](index=113&type=chunk)[115](index=115&type=chunk)[117](index=117&type=chunk) - Interest expense decreased for the three and nine-month periods due to lower average outstanding borrowings, despite a rise in the effective interest rate[121](index=121&type=chunk) [Segment Results](index=26&type=section&id=Segment%20Results) - **Research Segment:** Revenues grew **6%** in Q3 and **8%** in the nine-month period, driven by increased contract value. Expenses rose **15%** and **13%** respectively, due to higher compensation costs from increased headcount[130](index=130&type=chunk)[131](index=131&type=chunk)[132](index=132&type=chunk) - **Consulting Segment:** Revenues increased **6%** in Q3 and **4%** in the nine-month period, led by demand for content marketing and strategy consulting. Expenses for this segment grew **13%** in both periods, mainly from higher compensation and contractor costs[130](index=130&type=chunk)[133](index=133&type=chunk)[134](index=134&type=chunk) - **Events Segment:** Revenues saw a significant increase of **276%** in Q3 and **201%** in the nine-month period, reflecting the return to in-person events. Expenses also rose sharply, up **93%** for the nine-month period, due to costs associated with hosting these events[130](index=130&type=chunk)[135](index=135&type=chunk)[136](index=136&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) - Cash from operations decreased to **$37.8 million** for the nine months ended Sep 30, 2022, from **$85.0 million** in the prior year period, primarily due to changes in deferred revenue and accrued expenses[137](index=137&type=chunk) - The company amended its credit facility in December 2021, increasing its revolving credit facility to **$150.0 million** and extending the maturity to 2026. As of September 30, 2022, **$50.0 million** was outstanding[140](index=140&type=chunk)[141](index=141&type=chunk) - During the first nine months of 2022, the company repurchased approximately **0.3 million shares** for **$15.1 million**. The remaining stock repurchase authorization was approximately **$75.0 million** as of September 30, 2022[89](index=89&type=chunk)[139](index=139&type=chunk) - As of September 30, 2022, the company held **$118.7 million** in cash, cash equivalents, and marketable investments, with **$77.5 million** held outside the U.S. Management believes current cash and operational cash flows are sufficient to meet requirements for the next twelve months[145](index=145&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) There have been no material changes in the company's assessment of market risk sensitivity since its 2021 Annual Report on Form 10-K - There have been no material changes in the company's market risk exposure since its 2021 year-end report[149](index=149&type=chunk) [Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2022, with no material changes to internal control over financial reporting - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of September 30, 2022[150](index=150&type=chunk) - No material changes to the company's internal control over financial reporting were identified during the third quarter of 2022[151](index=151&type=chunk) PART II OTHER INFORMATION [Legal Proceedings](index=31&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to ordinary course legal proceedings and claims, which could materially impact operations due to costs and management resource diversion - The company is subject to legal proceedings from time to time in the ordinary course of business[153](index=153&type=chunk) [Risk Factors](index=31&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the 2021 Annual Report on Form 10-K have occurred, and prior risks remain applicable - The risk factors described in the Annual Report on Form 10-K for the year ended December 31, 2021, remain applicable to the business[154](index=154&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=31&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not repurchase any common stock under its authorized program during the quarter ended September 30, 2022 - No shares of common stock were repurchased during the third quarter of 2022[155](index=155&type=chunk) [Exhibits](index=32&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including officer certifications and XBRL data files - The report includes a list of exhibits filed, such as officer certifications and Inline XBRL documents[162](index=162&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (MARK ONE) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934. FOR THE QUARTERLY PERIOD ENDED June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934. COMMISSION FILE NUMBER: 000-21433 FORRESTER RESEARCH, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) 60 Acorn Pa ...