Forrester Research, Inc. (NASDAQ:FORR) Q3 2020 Earnings Conference Call October 29, 2020 4:30 PM ET Company Participants George Colony - Founder, Chairman and Chief Executive Officer Kelley Hippler - Chief Sales Officer Michael Doyle - Chief Financial Officer Conference Call Participants Trevor Romeo - William Blair & Company, LLC Vincent Colicchio - Barrington Research Associates, Inc Anja Soderstrom - Sidoti & Company, LLC Allen Klee - National Securities Corporation Operator Good afternoon. Thank you for ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (MARK ONE) FORRESTER RESEARCH, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) 60 Acorn Park Drive CAMBRIDGE, MASSACHUSETTS (Address of principal executive offices) DELAWARE 04-2797789 (I.R.S. Employer Identification Number) 02140 (Zip Code) (617) 613-6000 (Registrant's telephone number, including area code) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR ...

Forrester Research, Inc. (NASDAQ:FORR) Q2 2020 Earnings Conference Call July 30, 2020 4:30 PM ET Company Participants George Colony - Chairman and Chief Executive Officer Kelley Hippler - Chief Sales Officer Mike Doyle - Chief Financial Officer Carrie Johnson - Chief Research Officer Conference Call Participants Anja Soderstrom - Sidoti Vincent Colicchio - Barrington Research Operator Good afternoon. Thank you for joining today’s call. With me today are George Colony, Forrester’s Chairman of the Board and C ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part presents the unaudited consolidated financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures for the Company [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents Forrester Research, Inc.'s unaudited consolidated financial statements for the three months ended March 31, 2020 and 2019, including balance sheets, statements of operations, comprehensive loss, and cash flows, along with detailed notes explaining accounting policies, significant transactions, and financial impacts, particularly concerning the COVID-19 pandemic [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Presents the company's financial position, detailing assets, liabilities, and equity as of March 31, 2020, and December 31, 2019 **Consolidated Balance Sheet Highlights (in thousands):** | Item | March 31, 2020 | December 31, 2019 | Change | % Change | | :-------------------------------- | :------------- | :---------------- | :----- | :------- | | Total current assets | $172,903 | $192,036 | $(19,133) | (10.0%) | | Total assets | $608,298 | $639,160 | $(30,862) | (4.8%) | | Total current liabilities | $257,357 | $268,931 | $(11,574) | (4.3%) | | Deferred revenue | $195,399 | $179,194 | $16,205 | 9.0% | | Total liabilities | $450,126 | $481,072 | $(30,946) | (6.4%) | | Total stockholders' equity | $158,172 | $158,088 | $84 | 0.1% | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) Details the company's revenues, expenses, and net loss for the three months ended March 31, 2020 and 2019 **Consolidated Statements of Operations Highlights (Three Months Ended March 31, in thousands):** | Item | 2020 | 2019 | Change | % Change | | :-------------------------------- | :----- | :----- | :----- | :------- | | Total revenues | $106,345 | $100,649 | $5,696 | 5.7% | | Research services | $72,796 | $68,609 | $4,187 | 6.1% | | Advisory services and events | $33,549 | $32,040 | $1,509 | 4.7% | | Total operating expenses | $105,624 | $111,533 | $(5,909) | (5.3%) | | Income (loss) from operations | $721 | $(10,884) | $11,605 | 106.6% | | Net loss | $(513) | $(13,316) | $12,803 | 96.1% | | Basic loss per common share | $(0.03) | $(0.73) | $0.70 | 95.9% | | Diluted loss per common share | $(0.03) | $(0.73) | $0.70 | 95.9% | [Consolidated Statements of Comprehensive Loss](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Loss) Reports the net loss and other comprehensive loss components for the three months ended March 31, 2020 and 2019 **Consolidated Statements of Comprehensive Loss (Three Months Ended March 31, in thousands):** | Item | 2020 | 2019 | Change | % Change | | :-------------------------------- | :----- | :----- | :----- | :------- | | Net loss | $(513) | $(13,316) | $12,803 | 96.1% | | Other comprehensive loss | $(3,101) | $(430) | $(2,671) | (621.2%) | | Comprehensive loss | $(3,614) | $(13,746) | $10,132 | 73.7% | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Summarizes cash inflows and outflows from operating, investing, and financing activities for the three months ended March 31, 2020 and 2019 **Consolidated Statements of Cash Flows Highlights (Three Months Ended March 31, in thousands):** | Cash Flow Activity | 2020 | 2019 | Change | % Change | | :-------------------------------- | :----- | :----- | :----- | :------- | | Net cash provided by operating activities | $21,823 | $25,988 | $(4,165) | (16.0%) | | Net cash used in investing activities | $(2,401) | $(241,715) | $239,314 | 99.0% | | Net cash provided by (used in) financing activities | $(15,291) | $151,361 | $(166,652) | (110.1%) | | Net change in cash, cash equivalents and restricted cash | $1,448 | $(63,928) | $65,376 | 102.3% | | Cash, cash equivalents and restricted cash, end of period | $70,640 | $76,368 | $(5,728) | (7.5%) | [Notes to Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Provides detailed explanations of the accounting policies, significant transactions, and financial impacts referenced in the financial statements [Note 1 — Interim Consolidated Financial Statements](index=7&type=section&id=Note%201%20%E2%80%94%20Interim%20Consolidated%20Financial%20Statements) Discusses the basis of presentation, impact of COVID-19, and recent accounting pronouncements - The COVID-19 pandemic began materially impacting the Company's business in March 2020, primarily affecting customer contract bookings and consulting project delivery[21](index=21&type=chunk)[99](index=99&type=chunk) - The Company anticipates the most significant impact on operations in Q2 2020, with subsequent periods also negatively affected[21](index=21&type=chunk)[99](index=99&type=chunk) - Cost-reduction measures have been implemented, including reductions in travel, new hiring, and employee incentive compensation programs, to mitigate the financial impact of COVID-19[22](index=22&type=chunk)[100](index=100&type=chunk) - The Company adopted ASU No. 2016-13 (Topic 326) on January 1, 2020, using the modified retrospective method, resulting in a **$0.2 million decrease to retained earnings** for expected credit losses[27](index=27&type=chunk) **Allowance for Expected Credit Losses on Accounts Receivable (in thousands):** | Item | Amount | | :------------------------------------ | :----- | | Balance at December 31, 2019 | $628 | | Cumulative effect adjustment of adopting Topic 326 | $218 | | Provision for expected credit losses | $433 | | Net write-offs | $(122) | | Translation adjustments | $(13) | | Balance at March 31, 2020 | $1,144 | [Note 2 — Acquisitions](index=9&type=section&id=Note%202%20%E2%80%94%20Acquisitions) Details the acquisition of SiriusDecisions, Inc. and related costs - On January 3, 2019, Forrester acquired 100% of SiriusDecisions, Inc. for **$246.8 million at closing**, aiming to cross-sell services, extend platforms, and accelerate growth[34](index=34&type=chunk)[35](index=35&type=chunk)[101](index=101&type=chunk) - The acquisition costs of **$1.7 million** for the three months ended March 31, 2019, were primarily for investment banker fees and professional services[37](index=37&type=chunk) [Note 3 — Goodwill and Other Intangible Assets](index=9&type=section&id=Note%203%20%E2%80%94%20Goodwill%20and%20Other%20Intangible%20Assets) Provides carrying amounts and amortization schedules for goodwill and finite-lived intangible assets **Goodwill Carrying Amount (in thousands):** | Item | Amount | | :-------------------------- | :------- | | Balance at December 31, 2019 | $243,895 | | Translation adjustments | $(1,205) | | Balance at March 31, 2020 | $242,690 | **Finite-Lived Intangible Assets (March 31, 2020, in thousands):** | Asset Type | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | | :-------------------- | :-------------------- | :----------------------- | :------------------ | | Customer relationships | $109,608 | $42,100 | $67,508 | | Technology | $16,676 | $7,796 | $8,880 | | Backlog | $13,000 | $8,125 | $4,875 | | Trademarks | $12,453 | $1,061 | $11,392 | | **Total** | **$151,737** | **$59,082** | **$92,655** | **Estimated Intangible Asset Amortization Expense (in thousands):** | Year | Amount | | :----------------- | :------- | | 2020 (remainder) | $14,133 | | 2021 | $12,344 | | 2022 | $11,005 | | 2023 | $10,830 | | 2024 | $9,721 | | Thereafter | $34,622 | | **Total** | **$92,655** | [Note 4 — Debt](index=10&type=section&id=Note%204%20%E2%80%94%20Debt) Outlines the Company's credit agreement, outstanding borrowings, and compliance with financial covenants - The Company entered into a **$200.0 million** Credit Agreement on January 3, 2019, comprising **$125.0 million** in Term Loans and a **$75.0 million** Revolving Credit Facility, primarily to finance the SiriusDecisions acquisition[42](index=42&type=chunk)[136](index=136&type=chunk) **Outstanding Borrowings (in thousands):** | Description | March 31, 2020 | December 31, 2019 | | :-------------------------------- | :------------- | :---------------- | | Term loan facility | $116,406 | $118,750 | | Revolving credit facility | $— | $14,000 | | Principal amount outstanding | $116,406 | $132,750 | | Less: Deferred financing fees | $(2,048) | $(2,205) | | Net carrying amount | $114,358 | $130,545 | - As of March 31, 2020, the Company was in compliance with its financial covenants under the Credit Agreement and forecasts continued compliance for at least one year, considering COVID-19 cost-reduction measures[51](index=51&type=chunk)[140](index=140&type=chunk) [Note 5 — Leases](index=12&type=section&id=Note%205%20%E2%80%94%20Leases) Presents lease expenses, future minimum lease payments, and ROU asset impairments **Lease Expense (Three Months Ended March 31, in thousands):** | Item | 2020 | 2019 | | :-------------------- | :----- | :----- | | Operating lease cost | $3,991 | $3,569 | | Short-term lease cost | $81 | $255 | | Variable lease cost | $1,356 | $1,234 | | Sublease income | $(61) | $— | | **Total lease cost** | **$5,367** | **$5,058** | **Future Minimum Lease Payments (as of March 31, 2020, in thousands):** | Year | Amount | | :----------------- | :------- | | 2020 (remainder) | $11,828 | | 2021 | $14,022 | | 2022 | $13,505 | | 2023 | $12,974 | | 2024 | $12,619 | | Thereafter | $23,902 | | **Total lease payments** | **$88,850** | | Less imputed interest | $(12,945) | | **Present value of lease liabilities** | **$75,905** | - The Company incurred **$1.4 million** of ROU asset impairments during Q1 2020 related to facility leases from the SiriusDecisions acquisition[56](index=56&type=chunk) [Note 6 – Contract Assets and Liabilities](index=13&type=section&id=Note%206%20%E2%80%93%20Contract%20Assets%20and%20Liabilities) Details revenue recognition from deferred revenue, remaining performance obligations, and deferred commissions - The Company recognized **$69.9 million** and **$58.1 million** in revenue during the three months ended March 31, 2020 and 2019, respectively, related to its deferred revenue balance at the beginning of each period[62](index=62&type=chunk) - Approximately **$343.6 million** of revenue is expected to be recognized from remaining performance obligations over the next 12 to 24 months as of March 31, 2020[63](index=63&type=chunk) - Amortization expense for deferred commissions was **$8.1 million** and **$7.2 million** for the three months ended March 31, 2020 and 2019, respectively[64](index=64&type=chunk) [Note 7 — Derivatives and Hedging](index=14&type=section&id=Note%207%20%E2%80%94%20Derivatives%20and%20Hedging) Describes the Company's interest rate swap contract, its fair value, and effectiveness as a cash flow hedge - As of March 31, 2020, the Company had an interest rate swap contract with a notional amount of **$89.1 million**, maturing in 2022, designated as a cash flow hedge[66](index=66&type=chunk) - The fair value of the interest rate swap was a liability of **$1.8 million** as of March 31, 2020, recorded in other non-current liabilities[66](index=66&type=chunk) - The swap was considered highly effective through March 31, 2020, with a **$1.3 million** net accumulated loss deferred in accumulated other comprehensive loss[68](index=68&type=chunk) [Note 8 — Fair Value Measurements](index=14&type=section&id=Note%208%20%E2%80%94%20Fair%20Value%20Measurements) Presents the fair value hierarchy for financial instruments and changes in Level 3 contingent consideration **Fair Value Hierarchy (as of March 31, 2020, in thousands):** | Item | Level 1 | Level 2 | Level 3 | Total | | :-------------------------- | :------ | :------ | :------ | :------ | | **Assets:** | | | | | | Money market funds | $2,811 | $— | $— | $2,811 | | **Liabilities:** | | | | | | Contingent purchase price | $— | $— | $(2,524) | $(2,524) | | Interest rate swap | $— | $(1,787) | $— | $(1,787) | | **Total Liabilities** | **$—** | **$(1,787)** | **$(2,524)** | **$(4,311)** | **Changes in Level 3 Contingent Consideration (Three Months Ended March 31, 2020, in thousands):** | Item | Amount | | :------------------------------------ | :------- | | Balance at December 31, 2019 | $(2,511) | | Fair value adjustment of contingent purchase price | $(11) | | Foreign exchange effect | $(2) | | Balance at March 31, 2020 | $(2,524) | [Note 9 — Income Taxes](index=15&type=section&id=Note%209%20%E2%80%94%20Income%20Taxes) Reports income tax expense, effective tax rate, and the evaluation of the CARES Act **Income Tax Expense (Benefit) (Three Months Ended March 31, in thousands):** | Item | 2020 | 2019 | | :-------------------------- | :----- | :----- | | Income tax expense (benefit) | $19 | $(226) | | Effective tax rate | (3.8%) | 1.7% | - The Company anticipates an effective tax rate of approximately **10% to 15%** for the full year 2020[79](index=79&type=chunk) - The Company is evaluating the potential impact of the Coronavirus Aid, Relief and Economic Security (CARES) Act enacted on March 27, 2020[80](index=80&type=chunk) [Note 10 — Accumulated Other Comprehensive Loss](index=16&type=section&id=Note%2010%20%E2%80%94%20Accumulated%20Other%20Comprehensive%20Loss) Details the components of accumulated other comprehensive loss, including unrealized gains/losses and translation adjustments **Components of Accumulated Other Comprehensive Loss (in thousands):** | Item | Net Unrealized Gain (Loss) on Interest Rate Swap | Cumulative Translation Adjustment | Total Accumulated Other Comprehensive Loss | | :------------------------------------ | :--------------------------------------------- | :-------------------------------- | :----------------------------------------- | | Balance at December 31, 2019 | $(104) | $(4,753) | $(4,857) | | Foreign currency translation | $— | $(1,920) | $(1,920) | | Unrealized loss on interest rate swap, net of tax | $(1,181) | $— | $(1,181) | | **Balance at March 31, 2020** | **$(1,285)** | **$(6,673)** | **$(7,958)** | [Note 11 — Net Loss Per Common Share](index=16&type=section&id=Note%2011%20%E2%80%94%20Net%20Loss%20Per%20Common%20Share) Provides basic and diluted weighted average common shares outstanding and anti-dilutive exclusions **Basic and Diluted Weighted Average Common Shares (in thousands):** | Item | March 31, 2020 | March 31, 2019 | | :------------------------------------ | :------------- | :------------- | | Basic weighted average common shares outstanding | 18,705 | 18,363 | | Diluted weighted average common shares outstanding | 18,705 | 18,363 | | Options and restricted stock units excluded (anti-dilutive) | 980 | 703 | [Note 12 — Stockholders' Equity](index=17&type=section&id=Note%2012%20%E2%80%94%20Stockholders%27%20Equity) Summarizes changes in stockholders' equity, stock-based compensation, and dividend/repurchase programs **Stockholders' Equity Changes (Three Months Ended March 31, 2020, in thousands):** | Item | Common Stock ($0.01 Par Value) | Additional Paid-in Capital | Retained Earnings | Treasury Stock Cost | Accumulated Other Comprehensive Loss | Total Equity | | :------------------------------------ | :----------------------------- | :------------------------- | :---------------- | :------------------ | :----------------------------------- | :----------- | | Balance at Dec 31, 2019 | $233 | $216,454 | $118,147 | $(171,889) | $(4,857) | $158,088 | | Issuance of common stock under stock plans, net | $1 | $1,052 | $— | $— | $— | $1,053 | | Stock-based compensation expense | $— | $2,802 | $— | $— | $— | $2,802 | | Cumulative effect adjustment (Topic 326) | $— | $— | $(157) | $— | $— | $(157) | | Net loss | $— | $— | $(513) | $— | $— | $(513) | | Net change in interest rate swap, net of tax | $— | $— | $— | $— | $(1,181) | $(1,181) | | Foreign currency translation | $— | $— | $— | $— | $(1,920) | $(1,920) | | **Balance at Mar 31, 2020** | **$234** | **$220,308** | **$117,477** | **$(171,889)** | **$(7,958)** | **$158,172** | **Stock-Based Compensation Expense (Three Months Ended March 31, in thousands):** | Expense Category | 2020 | 2019 | | :------------------------------------ | :----- | :----- | | Cost of services and fulfillment | $1,593 | $1,463 | | Selling and marketing | $362 | $440 | | General and administrative | $847 | $782 | | **Total** | **$2,802** | **$2,685** | - The Company suspended its dividends program in 2019 following the SiriusDecisions acquisition and related debt, declaring no dividends in Q1 2020 or Q1 2019[88](index=88&type=chunk) - No shares of common stock were repurchased in the three months ended March 31, 2020 or 2019, and the Company plans to substantially reduce or eliminate repurchases in 2020[89](index=89&type=chunk)[156](index=156&type=chunk) [Note 13 — Non-Marketable Investments](index=19&type=section&id=Note%2013%20%E2%80%94%20Non-Marketable%20Investments) Describes the carrying value and accounting method for non-marketable investments in private equity funds - The carrying value of non-marketable investments in technology-related private equity funds was **$2.5 million** as of March 31, 2020, accounted for using the equity method[90](index=90&type=chunk)[91](index=91&type=chunk) [Note 14 — Operating Segments](index=19&type=section&id=Note%2014%20%E2%80%94%20Operating%20Segments) Details the Company's segment realignment and financial performance for Products and Research segments - Effective January 1, 2020, the Company realigned its internal management and reporting into Products and Research segments, eliminating the SiriusDecisions segment[92](index=92&type=chunk)[124](index=124&type=chunk) **Total Segment Revenues and Expenses (Three Months Ended March 31, in millions):** | Segment | 2020 Revenues | 2019 Revenues | YoY Revenue Change | 2020 Expenses | 2019 Expenses | YoY Expense Change | | :---------------- | :------------ | :------------ | :----------------- | :------------ | :------------ | :----------------- | | Products | $39,918 | $37,967 | 5% | $(19,378) | $(19,948) | (3%) | | Research | $66,427 | $62,682 | 6% | $(18,784) | $(20,397) | (8%) | | **Consolidated** | **$106,345** | **$100,649** | **6%** | **$(38,162)** | **$(40,345)** | **(5%)** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition and results of operations, highlighting the impact of COVID-19, key business metrics, detailed revenue and expense analysis, segment performance, and liquidity [Overview](index=21&type=section&id=Overview) Discusses the impact of the COVID-19 pandemic on business operations, implemented cost-reduction measures, and key business metrics - The COVID-19 pandemic significantly impacted Q1 2020 business, primarily affecting March customer contract bookings and consulting project delivery[99](index=99&type=chunk)[152](index=152&type=chunk) - Q2 2020 is expected to face the most significant impact, including a substantial reduction in revenues and profits from virtualized flagship events (SiriusDecisions Summit, CX North America) and cancelled smaller events[99](index=99&type=chunk)[152](index=152&type=chunk) - The Company has implemented cost-reduction measures, including cuts to travel, new hiring, and employee incentive compensation, to proactively respond to the pandemic's effects[100](index=100&type=chunk)[153](index=153&type=chunk) **Key Business Metrics (as of March 31, dollars in millions):** | Metric | 2020 | 2019 | Absolute Change | Percentage Change | | :-------------------- | :----- | :----- | :-------------- | :---------------- | | Deferred revenue | $195.4 | $191.6 | $3.8 | 2% | | Agreement value | $354.9 | $345.3 | $9.6 | 3% | | Client retention | 69% | 72% | (3) | (4%) | | Dollar retention | 89% | 90% | (1) | (1%) | | Enrichment | 102% | 106% | (4) | (4%) | | Number of clients | 2,805 | 2,850 | (45) | (2%) | - Retention and enrichment rates were negatively affected by decreased contract bookings in March 2020 due to the widespread economic effects of COVID-19[106](index=106&type=chunk) [Results of Operations](index=23&type=section&id=Results%20of%20Operations) Analyzes revenue performance, operating expenses, amortization, interest expense, and income tax for the period **Revenue Performance (Three Months Ended March 31, in millions):** | Revenue Category | 2020 | 2019 | Absolute Increase (Decrease) | Percentage Increase (Decrease) | | :------------------------------------ | :----- | :----- | :--------------------------- | :----------------------------- | | Total revenues | $106.3 | $100.6 | $5.7 | 6% | | Research services | $72.8 | $68.6 | $4.2 | 6% | | Advisory services and events | $33.5 | $32.0 | $1.5 | 5% | | Revenues from customers outside of the U.S. | $21.4 | $22.4 | $(1.0) | (4%) | - Total revenues increased **6% YoY**, with approximately **4%** of this growth attributed to the fair value adjustment of pre-acquisition deferred revenue in 2019[109](index=109&type=chunk) - Cost of services and fulfillment decreased **4% YoY**, primarily due to a **$2.6 million** decrease in compensation and benefits (incentive bonuses) and a **$0.6 million** decrease in travel and entertainment, partially offset by increased professional services costs[112](index=112&type=chunk) - Selling and marketing expenses decreased **4% YoY**, driven by a **$1.1 million** decrease in travel and entertainment and a **$0.7 million** decrease in compensation and benefits (incentive bonuses)[114](index=114&type=chunk) - General and administrative expenses decreased **9% YoY**, mainly due to a **$1.1 million** decrease in compensation and benefits (incentive bonuses)[115](index=115&type=chunk) - Amortization of intangible assets decreased by **$1.5 million YoY** as certain technology intangible assets became fully amortized[117](index=117&type=chunk) - Interest expense decreased by **$0.8 million YoY** due to lower average outstanding borrowings and lower effective interest rates[119](index=119&type=chunk) **Income Tax Expense (Benefit) (Three Months Ended March 31, in millions):** | Item | 2020 | 2019 | Absolute Increase (Decrease) | Percentage Increase (Decrease) | | :------------------------------------ | :----- | :----- | :--------------------------- | :----------------------------- | | Provision (benefit) for income taxes | $0.0 | $(0.2) | $0.2 | 100% | | Effective tax rate | (3.8%) | 1.7% | (5.5) | (324%) | [Segment Results](index=26&type=section&id=Segment%20Results) Provides a detailed analysis of revenue and expense performance for the Product and Research segments - Product segment revenues increased **5% YoY**, driven by a **2% increase** in Connect revenues (executive program) and a **9% increase** in Consulting revenues (strong consultant delivery)[129](index=129&type=chunk) - Product segment expenses decreased **3% YoY**, primarily due to a **$1.5 million** decrease in compensation and benefits (incentive bonuses) and a **$0.4 million** decrease in travel and entertainment, partially offset by a **$1.4 million** increase in professional services[130](index=130&type=chunk) - Research segment revenues increased **6% YoY**, driven by an **8% increase** in the Research product line (reprint product), partially offset by a **1% decrease** in Consulting revenues[131](index=131&type=chunk) - Research segment expenses decreased **8% YoY**, mainly due to a **$1.5 million** decrease in compensation and benefits (incentive bonuses)[132](index=132&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) Examines cash flow activities, debt obligations, cash and cash equivalents, and contractual obligations - Net cash provided by operating activities decreased by **$4.2 million YoY** to **$21.8 million** for Q1 2020, primarily due to a **$5.3 million** reduction in cash from accounts receivable and deferred revenue from decreased contract bookings[133](index=133&type=chunk) - Net cash used in investing activities was **$2.4 million** in Q1 2020, primarily for property and equipment purchases, a significant decrease from **$241.7 million** in Q1 2019 (which included the SiriusDecisions acquisition)[134](index=134&type=chunk) - Net cash used in financing activities was **$15.3 million** in Q1 2020, mainly due to **$16.3 million** in debt repayments (**$14.0 million** discretionary on revolving credit, **$2.3 million** required on term loan)[135](index=135&type=chunk) - The Company expects to pay approximately **$3.5 million** in deferred acquisition purchase price in 2020 for the FeedbackNow acquisition[135](index=135&type=chunk) - As of March 31, 2020, cash and cash equivalents totaled **$69.8 million**, with **$51.8 million** held outside the U.S., which the Company intends to permanently reinvest[141](index=141&type=chunk) **Contractual Obligations (as of March 31, 2020, in thousands):** | Contractual Obligations | Total | 2020 | 2021 | 2022 | 2023 | 2024 | Thereafter | | :---------------------- | :------ | :----- | :----- | :----- | :----- | :----- | :--------- | | Operating lease payments | $106,026 | $12,046 | $15,777 | $15,387 | $14,872 | $14,534 | $33,410 | | Purchase commitments | $8,372 | $6,632 | $870 | $870 | $— | $— | $— | | **Total** | **$114,398** | **$18,678** | **$16,647** | **$16,257** | **$14,872** | **$14,534** | **$33,410** | - Purchase commitments were reduced by **$2.1 million** due to the cancellation of event venue contracts as flagship events moved to a virtual format and smaller events were cancelled due to COVID-19[145](index=145&type=chunk) [Off-Balance Sheet Arrangements](index=28&type=section&id=Off-Balance%20Sheet%20Arrangements) Confirms the absence of any off-balance sheet financing arrangements - The Company does not maintain any off-balance sheet financing arrangements[144](index=144&type=chunk) [Recent Accounting Pronouncements](index=28&type=section&id=Recent%20Accounting%20Pronouncements) Refers to Note 1 for a comprehensive description of recent accounting pronouncements - Refer to Note 1 – Interim Consolidated Financial Statements for a full description of recent accounting pronouncements[145](index=145&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=29&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that there have been no material changes in the Company's assessment of its sensitivity to market risk since the last annual report - No material changes in the assessment of market risk sensitivity since the Annual Report on Form 10-K for the year ended December 31, 2019[146](index=146&type=chunk) [Item 4. Controls and Procedures](index=29&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of the Company's disclosure controls and procedures and reports on any changes in internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=29&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Concludes on the effectiveness of the Company's disclosure controls and procedures as of March 31, 2020 - Management, including the principal executive and financial officers, concluded that the Company's disclosure controls and procedures were effective as of March 31, 2020, providing reasonable assurance[147](index=147&type=chunk) [Changes in Internal Control Over Financial Reporting](index=29&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) Reports on the absence of material changes in internal control over financial reporting during Q1 2020 - No material changes in internal control over financial reporting occurred during Q1 2020, despite modifications to control procedures due to employees working remotely in response to COVID-19[148](index=148&type=chunk) [PART II. OTHER INFORMATION](index=30&type=section&id=PART%20II.%20OTHER%20INFORMATION) This part includes information on legal proceedings, risk factors, equity sales, and exhibits [Item 1. Legal Proceedings](index=30&type=section&id=Item%201.%20Legal%20Proceedings) This section confirms that the Company is not currently involved in any material legal proceedings - The Company is not currently a party to any material legal proceedings[150](index=150&type=chunk) [Item 1A. Risk Factors](index=30&type=section&id=Item%201A.%20Risk%20Factors) This section updates the Company's risk factors, specifically emphasizing the adverse impact of health epidemics like COVID-19 on business operations, financial condition, and the ability to comply with financial covenants - The risk factor regarding health epidemics has been updated to reflect the adverse impact of COVID-19, which is expected to significantly affect Q2 2020 results and subsequent periods[151](index=151&type=chunk)[152](index=152&type=chunk) - The pandemic could disrupt or restrict the Company's ability to sell or fulfill products/services, reduce demand, and impact financial condition, results of operations, cash flows, and liquidity[152](index=152&type=chunk) - Despite cost-reduction measures, a more severe impact from COVID-19 than currently forecasted could affect the Company's ability to comply with financial covenants, potentially having a material adverse effect[153](index=153&type=chunk)[154](index=154&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=30&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports on the Company's stock repurchase program, noting no repurchases during the first quarter of 2020 and future plans to reduce or eliminate such activities - No shares of common stock were repurchased under the stock repurchase program during the quarter ended March 31, 2020[156](index=156&type=chunk) - The Company anticipates continuing to substantially reduce or eliminate repurchases of common stock during 2020 following the SiriusDecisions acquisition[156](index=156&type=chunk) [Item 6. Exhibits](index=31&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including organizational documents, certifications, and XBRL data files - The exhibits include Restated Certificate of Incorporation, Amended and Restated By-Laws, Specimen Certificate for Common Stock, Certifications of Principal Executive and Financial Officers (31.1, 31.2, 32.1, 32.2), and XBRL Instance Document and Taxonomy Extensions[162](index=162&type=chunk) [SIGNATURES](index=33&type=section&id=SIGNATURES) This section contains the official signatures for the Form 10-Q filing, confirming its submission by authorized personnel - The report was signed by Michael A. Doyle, Chief Financial Officer, on May 11, 2020[165](index=165&type=chunk)

Forrester Research, Inc. (NASDAQ:FORR) Q1 2020 Earnings Conference Call May 7, 2020 4:30 PM ET Company Participants George Colony – Chairman and Chief Executive Officer Carrie Johnson – Chief Research Officer Mike Doyle – Chief Financial Officer Kelley Hippler – Chief Sales Officer Conference Call Participants Andrew Nicholas – William Blair & Company Anja Soderstrom – Sidoti & Company Operator Good afternoon and thank you for joining today's call. With me today are George Colony, Forrester's Chairman of th ...

PART I [Item 1. Business](index=3&type=section&id=Item%201.%20Business) Forrester Research, Inc. provides global independent research, data, and advisory services, expanding significantly with the 2019 SiriusDecisions acquisition to help clients become customer-obsessed [General](index=3&type=section&id=General) Forrester Research, Inc. is a global independent research, data, and advisory firm, founded in 1983, focused on customer-obsessed strategies, and expanded with the 2019 SiriusDecisions acquisition - Forrester Research, Inc. is a global independent research, data, and advisory services firm, founded in 1983 and reincorporated in 1996, focusing on helping business and technology leaders with customer-obsessed strategies[13](index=13&type=chunk)[14](index=14&type=chunk) - On January 3, 2019, Forrester acquired SiriusDecisions, Inc., a B2B sales, marketing, and product leadership company, to expand cross-selling, extend platforms, and accelerate international growth[16](index=16&type=chunk) [Industry Background](index=3&type=section&id=Industry%20Background) Enterprises face rapid digital changes and market disruptions, necessitating objective external advice on customer behavior, technology, and business strategy - Enterprises struggle with rapid digital changes and market disruptions, requiring external, objective advice on customer behavior, technology investments, and business strategy[17](index=17&type=chunk)[18](index=18&type=chunk) [Forrester's® Strategy](index=3&type=section&id=Forrester's%C2%AE%20Strategy) Forrester's strategy aims to help clients achieve "customer-obsession" by providing market insights, strategic guidance, and execution advice, leveraging combined strengths - Forrester's strategy focuses on helping clients become "customer-obsessed" by providing insights into market changes, strategic guidance, and execution advice, leveraging the combined strengths of Forrester and SiriusDecisions[19](index=19&type=chunk)[20](index=20&type=chunk)[21](index=21&type=chunk) [Forrester's Solution](index=4&type=section&id=Forrester's%20Solution) Forrester's solutions address key market imperatives for clients, including driving revenue with improving customer experience, differentiating with digital, accelerating growth with marketing innovation, using customer insights for competitive advantage, transforming IT, and securing customers/protecting brands - Forrester's solutions address key market imperatives for clients, including driving revenue with improving customer experience, differentiating with digital, accelerating growth with marketing innovation, using customer insights for competitive advantage, transforming IT, and securing customers/protecting brands[23](index=23&type=chunk) [Products and Services](index=4&type=section&id=Products%20and%20Services) Forrester offers diverse products and services including research, peer networking, certifications, analytics, consulting, and events [Research](index=5&type=section&id=Research) Forrester provides distinct research products, including syndicated and operational intelligence, with subscriptions offering analyst inquiry access - Forrester offers two distinct research products: Forrester Research (syndicated, evaluative, and emerging tech research) and SiriusDecisions Research (operational intelligence, best practices for B2B marketing, sales, and product leaders)[24](index=24&type=chunk)[25](index=25&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk) - Research subscriptions include various access levels, with Member Licenses and SiriusDecisions offerings providing analyst inquiry for direct feedback and discussions[28](index=28&type=chunk) [Connect](index=6&type=section&id=Connect) Connect offerings facilitate peer and expert interaction through exclusive Leadership Boards and personalized Executive Programs for strategic support - Connect offerings facilitate peer and expert interaction through Leadership Boards (exclusive executive peer groups) and Executive Programs (personalized strategy support for C-suite leaders)[33](index=33&type=chunk)[34](index=34&type=chunk)[36](index=36&type=chunk)[37](index=37&type=chunk) [Certification](index=7&type=section&id=Certification) Certification programs provide 8-week online courses for critical proficiencies, expanding to include CX, Zero Trust, and B2B Marketing - Certification programs offer 8-week online courses (Pro and Champ tracks) for critical proficiencies, initially in CX, and expanded in 2019 to include Zero Trust and B2B Marketing certifications[39](index=39&type=chunk)[40](index=40&type=chunk) [Analytics](index=7&type=section&id=Analytics) Analytics products include CX Index, Consumer Technographics, Business Technographics, and FeedbackNow for measuring and understanding customer and business technology adoption - Analytics products include CX Index (customer experience measurement), Consumer Technographics (consumer tech adoption insights), Business Technographics (business tech adoption insights), and FeedbackNow (real-time customer experience cloud solution)[41](index=41&type=chunk)[46](index=46&type=chunk) [Consulting](index=9&type=section&id=Consulting) Consulting services deliver focused insights and recommendations for technology and business strategy, leveraging proprietary frameworks and data - Consulting services provide focused insights and recommendations for technology and business strategy, including CX, digital transformation, and marketing, leveraging proprietary frameworks and data[42](index=42&type=chunk) [Events](index=9&type=section&id=Events) Forrester hosts global events focusing on key business imperatives, significantly enhanced by the SiriusDecisions annual Summits - Forrester hosts events globally, focusing on key business imperatives, with the SiriusDecisions annual Summits significantly enhancing its event portfolio[43](index=43&type=chunk)[44](index=44&type=chunk) [Sales and Marketing](index=9&type=section&id=Sales%20and%20Marketing) Forrester utilizes a direct sales force segmented by client size and geography, supported by multi-channel marketing efforts to enhance brand and drive growth - Forrester sells products and services through a direct sales force segmented by client size and geography, with sales personnel increasing from 528 in 2018 to **698 in 2019**[45](index=45&type=chunk) - Marketing efforts aim to enhance the Forrester brand, promote products, improve client experience, and drive growth through analytics, content, social media, PR, and multi-channel campaigns[47](index=47&type=chunk) - As of December 31, 2019, Forrester served over **2,800 client companies**, with no single client accounting for more than **4% of 2019 revenues**[48](index=48&type=chunk) [Pricing and Contracts](index=10&type=section&id=Pricing%20and%20Contracts) Revenue is categorized into research and advisory services, with agreement value increasing significantly in 2019 due to the SiriusDecisions acquisition - Revenue is categorized into research services (subscriptions) and advisory services and events (consulting, custom analytics, events)[49](index=49&type=chunk) - Agreement value, a key business indicator, increased by **34% to $358.0 million** at December 31, 2019, with approximately **25 percentage points** of this increase attributed to the SiriusDecisions acquisition[51](index=51&type=chunk) [Competition](index=10&type=section&id=Competition) Forrester competes with direct rivals, consulting firms, and indirect sources, emphasizing product adaptability, global data, and independent analysis as key advantages - Forrester competes with direct rivals like Gartner and various consulting/market research firms, as well as indirect competitors like internal client teams and free online resources[52](index=52&type=chunk) - Key competitive factors include product/service adaptability, global data, independent analysis, digital service delivery, pricing, and customer service quality[52](index=52&type=chunk) - Forrester's competitive advantages include its "Age of the Customer" strategy, research methodology, focus on emerging technologies, and growing digital product capabilities[52](index=52&type=chunk) [Employees](index=11&type=section&id=Employees) Forrester's employee base totaled 1,795 as of December 31, 2019, with a culture promoting client service, courage, collaboration, integrity, and quality Employee Count (December 31, 2019) | Employee Category | Count (Dec 31, 2019) | | :---------------- | :------------------- | | Total Employees | 1,795 | | Research, Connect, Analytics, Consulting, Events Staff | 688 | | Sales Personnel | 698 | - Forrester's culture promotes values such as client service, courage, collaboration, integrity, and quality through training and recognition programs[54](index=54&type=chunk) [Item 1A. Risk Factors](index=11&type=section&id=Item%201A.%20Risk%20Factors) Forrester faces diverse risks including declining demand, economic downturns, international operational challenges, COVID-19 impacts, acquisition integration, debt management, and cybersecurity threats - Risks include declining renewals/demand for subscription and advisory services, adverse economic conditions, and operational challenges from international activities (**21% of 2019 revenues** from international sales)[55](index=55&type=chunk)[56](index=56&type=chunk)[57](index=57&type=chunk)[58](index=58&type=chunk) - The COVID-19 outbreak is expected to reduce 2020 SiriusDecisions Summit revenues by **$7.0-$9.0 million** and operating income by **$4.0-$6.0 million** due to its conversion to a virtual event[59](index=59&type=chunk) - Integration difficulties with acquired companies (SiriusDecisions, FeedbackNow, GlimpzIt) and the realignment of SiriusDecisions operations into existing segments pose risks to realizing anticipated benefits[66](index=66&type=chunk) - Outstanding debt of **$132.8 million** from the SiriusDecisions acquisition could restrict business and affect financial condition, with covenants limiting financial flexibility[67](index=67&type=chunk) - Competition from direct rivals (e.g., Gartner) and indirect sources (internal client staff, free online information) could lead to pricing pressure and market share loss[69](index=69&type=chunk) - Fluctuations in operating results can be caused by market spending trends, subscription timing, advisory service utilization, event timing, new product introductions, hiring, currency exchange rates, and interest rate changes[72](index=72&type=chunk) [Item 1B. Unresolved Staff Comments](index=15&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 from the Securities and Exchange Commission[76](index=76&type=chunk) [Item 2. Properties](index=15&type=section&id=Item%202.%20Properties) Forrester's corporate headquarters is in Cambridge, Massachusetts, with global rented offices, and current facilities are deemed adequate for present and future needs - Corporate headquarters is a **190,000 sq ft office** in Cambridge, Massachusetts, with other rented offices in San Francisco, New York City, Dallas, McLean, Nashville, Wilton (SiriusDecisions HQ), Austin, Amsterdam, Frankfurt, London, Paris, New Delhi, Singapore, and Lausanne[77](index=77&type=chunk)[78](index=78&type=chunk) - The company believes its current facilities are adequate and future needs can be met with available lease options[79](index=79&type=chunk) [Item 3. Legal Proceedings](index=15&type=section&id=Item%203.%20Legal%20Proceedings) Forrester Research, Inc. is not currently a party to any material legal proceedings - Forrester Research, Inc. is not a party to any material legal proceedings[80](index=80&type=chunk) [Item 4. Mine Safety Disclosures](index=15&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to Forrester Research, Inc. - Not applicable[81](index=81&type=chunk) PART II [Item 5. Market For Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities](index=16&type=section&id=Item%205.%20Market%20For%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters,%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Forrester's common stock is listed on Nasdaq, with its quarterly dividend suspended in 2019 post-acquisition, and no stock repurchases occurred despite authorization - Common stock is listed on Nasdaq Global Select Market under "FORR"[84](index=84&type=chunk) - Quarterly dividend program was suspended indefinitely starting in 2019 due to the SiriusDecisions acquisition[84](index=84&type=chunk) Cash Dividends Declared and Paid | Year | Quarterly Dividend per Share | Total Dividends Paid (in thousands) | | :--- | :--------------------------- | :---------------------------------- | | 2018 | $0.20 | $14,502 | | 2017 | $0.19 | $13,631 | | 2016 | $0.18 | $12,987 | | 2015 | $0.17 | $12,179 | - As of December 31, 2019, **$535.0 million** was authorized for stock repurchases, with **$474.9 million** used to repurchase **16.3 million shares** historically; no repurchases in 2019[85](index=85&type=chunk) [Item 6. Selected Consolidated Financial Data](index=18&type=section&id=Item%206.%20Selected%20Consolidated%20Financial%20Data) This section presents selected consolidated financial data from 2015-2019, highlighting impacts from the 2019 SiriusDecisions acquisition, new accounting standards, and the 2017 Tax Cuts and Jobs Act Consolidated Statement of Income (Loss) Data (in thousands, except per share amounts) | Metric | 2019 | 2018 | 2017 | 2016 | 2015 | | :---------------------------------- | :----- | :----- | :----- | :----- | :----- | | Research services revenue | $298,735 | $228,399 | $216,471 | $215,216 | $210,268 | | Advisory services and events revenue | $162,962 | $129,176 | $121,202 | $110,879 | $103,458 | | **Total revenues** | **$461,697** | **$357,575** | **$337,673** | **$326,095** | **$313,726** | | Income (loss) from operations | $(1,075) | $22,425 | $27,549 | $30,774 | $18,827 | | Net income (loss) | $(9,570) | $15,380 | $15,140 | $17,651 | $11,996 | | Basic income (loss) per common share | $(0.52) | $0.85 | $0.84 | $0.98 | $0.67 | | Diluted income (loss) per common share | $(0.52) | $0.84 | $0.83 | $0.97 | $0.66 | Consolidated Balance Sheet Data (in thousands) | Metric | 2019 | 2018 | 2017 | 2016 | 2015 | | :---------------------------------- | :----- | :----- | :----- | :----- | :----- | | Cash, cash equivalents and marketable investments | $67,904 | $140,296 | $134,123 | $138,105 | $101,106 | | Working capital | $(76,895) | $46,108 | $41,766 | $45,962 | $15,274 | | Total assets | $639,160 | $353,524 | $345,200 | $335,785 | $318,991 | | Deferred revenue | $179,194 | $135,332 | $145,207 | $134,265 | $140,676 | | Long-term debt, net of deferred financing fees | $130,545 | — | — | — | — | | Total liabilities | $481,072 | $201,924 | $204,011 | $185,749 | $191,689 | - 2019 results include SiriusDecisions operations from acquisition date[92](index=92&type=chunk) - Adoption of Topic 842 (Leases) in 2019 increased operating lease assets and liabilities by **$53.3 million**[92](index=92&type=chunk) - Adoption of Topic 606 (Revenue from Contracts with Customers) in 2018 increased 2018 total revenues by **$1.6 million** and net income by **$1.4 million**[92](index=92&type=chunk) - Tax Cuts and Jobs Act of 2017 resulted in a decrease in U.S. corporate tax rate from **35% to 21%** and a one-time transition tax on foreign earnings[92](index=92&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=17&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section reviews Forrester's revenue, expenses, and the significant 2019 SiriusDecisions acquisition impact, detailing accounting policies, operational results, segment performance, and liquidity [Overview](index=20&type=section&id=Overview) This overview details Forrester's revenue sources, the 2019 SiriusDecisions acquisition, key operating expenses, and updated client retention metrics - Revenue sources include subscriptions (Research, Connect, Analytics), reprints, advisory services, consulting, and events, with recognition methods varying by service type[93](index=93&type=chunk) - The acquisition of SiriusDecisions on January 3, 2019, for **$246.8 million** (net cash paid **$237.7 million**) was financed by **$175.0 million debt** and cash on hand[94](index=94&type=chunk) - Key operating expenses are cost of services and fulfillment, selling and marketing, and general and administrative[95](index=95&type=chunk) - Client retention, dollar retention, and enrichment metrics were updated in Q1 2019 to include virtually all client relationships and capture all enrichment at a client account level[96](index=96&type=chunk) Key Business Metrics (in millions, except percentages) | Metric | Dec 31, 2019 | Dec 31, 2018 | Absolute Change | Percentage Change | | :---------------- | :----------- | :----------- | :-------------- | :---------------- | | Deferred revenue | $179.2 | $135.3 | $43.9 | 32% | | Agreement value | $358.0 | $266.3 | $91.7 | 34% | | Client retention | 72% | 71% | 1% | 1% | | Dollar retention | 90% | 90% | — | — | | Enrichment | 106% | 109% | (3%) | (3%) | | Number of clients | 2,880 | 2,353 | 527 | 22% | - SiriusDecisions acquisition contributed **24 percentage points** to deferred revenue growth, **25 percentage points** to agreement value growth, and **17 percentage points** to client count growth in 2019[100](index=100&type=chunk) [Critical Accounting Policies and Estimates](index=21&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section outlines critical accounting policies and estimates for revenue recognition, leases, goodwill, intangible assets, and income taxes [Revenue Recognition](index=22&type=section&id=Revenue%20Recognition) Revenue is recognized upon transfer of control, with subscriptions recognized ratably and consulting/advisory services recognized over time or at a point in time - Revenue is recognized when control of products/services is transferred, with transaction prices allocated to performance obligations based on standalone selling prices[102](index=102&type=chunk)[217](index=217&type=chunk)[220](index=220&type=chunk) - Research, Connect, and Analytics subscriptions are generally recognized ratably over the contract term as a "stand ready" obligation[104](index=104&type=chunk)[221](index=221&type=chunk)[222](index=222&type=chunk)[223](index=223&type=chunk) - 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)[103](index=103&type=chunk)[225](index=225&type=chunk)[226](index=226&type=chunk)[227](index=227&type=chunk) - Management estimates the amount of prepaid performance obligations that will expire unused, recognizing revenue for this estimate over the period related rights are exercised[105](index=105&type=chunk)[228](index=228&type=chunk) [Leases](index=23&type=section&id=Leases) Operating leases are recognized as ROU assets and liabilities based on present value of payments, with lease terms including reasonably certain extension/termination options - Operating leases are recognized as ROU assets and liabilities based on the present value of future minimum lease payments, using the incremental borrowing rate as the discount rate[106](index=106&type=chunk)[243](index=243&type=chunk) - Lease terms include extension/termination options when their exercise is reasonably certain, requiring management judgment based on economic factors[107](index=107&type=chunk)[243](index=243&type=chunk)[244](index=244&type=chunk) [Goodwill, Intangible Assets and Other Long-Lived Assets](index=23&type=section&id=Goodwill,%20Intangible%20Assets%20and%20Other%20Long-Lived%20Assets) Goodwill is tested annually for impairment, while finite-lived intangible assets are amortized over 5 to 16 years and continually evaluated for impairment - Goodwill (**$341.3 million** as of Dec 31, 2019) is tested for impairment annually (November 30th) by comparing reporting unit carrying value to fair value, with no impairment found in 2019[107](index=107&type=chunk)[108](index=108&type=chunk) - Finite-lived intangible assets (customer relationships, technology, backlog, trade names) are amortized over **5 to 16 years** and continually evaluated for impairment[109](index=109&type=chunk)[255](index=255&type=chunk) [Income Taxes](index=24&type=section&id=Income%20Taxes) Deferred tax assets and liabilities are recognized for temporary differences, requiring significant judgment in multi-jurisdictional income tax calculations - Deferred tax assets and liabilities are recognized for temporary differences and operating loss carryforwards, with a valuation allowance recorded if realization is uncertain[110](index=110&type=chunk)[256](index=256&type=chunk)[257](index=257&type=chunk) - Significant judgment is required for income tax calculations in multiple jurisdictions, including transfer pricing and potential audit challenges[111](index=111&type=chunk) [Results of Operations for the years ended December 31, 2019 and 2018](index=24&type=section&id=Results%20of%20Operations%20for%20the%20years%20ended%20December%2031,%202019%20and%202018) This section analyzes Forrester's operational results for 2019 compared to 2018, detailing revenue and expense changes, significantly impacted by the SiriusDecisions acquisition [2019 compared to 2018](index=25&type=section&id=2019%20compared%20to%202018) This sub-section provides a detailed comparison of financial performance between 2019 and 2018, highlighting key changes in revenues and expenses [Revenues](index=25&type=section&id=Revenues) Total revenues increased by 29% in 2019, significantly driven by the SiriusDecisions acquisition across research and advisory services Revenue Performance (in millions, except percentages) | Metric | 2019 | 2018 | Absolute Increase | Percentage Increase | | :---------------------------------- | :----- | :----- | :---------------- | :------------------ | | Total revenues | $461.7 | $357.6 | $104.1 | 29% | | Revenues from research services | $298.7 | $228.4 | $70.3 | 31% | | Revenues from advisory services and events | $163.0 | $129.2 | $33.8 | 26% | | Revenues attributable to customers outside of the U.S. | $98.8 | $83.4 | $15.4 | 18% | | Percentage of revenue attributable to customers outside of the U.S. | 21% | 23% | (2%) | (9%) | - SiriusDecisions contributed **22 percentage points** to total revenue growth, **26 percentage points** to research services revenue growth, and **16 percentage points** to advisory services and events revenue growth in 2019[115](index=115&type=chunk)[116](index=116&type=chunk)[117](index=117&type=chunk) [Cost of Services and Fulfillment](index=25&type=section&id=Cost%20of%20Services%20and%20Fulfillment) Cost of services and fulfillment increased by 34% in 2019, primarily due to the SiriusDecisions acquisition Cost of Services and Fulfillment (in millions, except percentages) | Metric | 2019 | 2018 | Absolute Increase | Percentage Increase | | :---------------------------------- | :----- | :----- | :---------------- | :------------------ | | Cost of services and fulfillment | $196.7 | $146.5 | $50.2 | 34% | | As a percentage of total revenues | 42.6% | 41.0% | 1.6% | 4% | | Service and fulfillment employees (at end of period) | 776 | 639 | 137 | 21% | - **$39.5 million** of the increase was due to the SiriusDecisions acquisition[119](index=119&type=chunk) [Selling and Marketing](index=26&type=section&id=Selling%20and%20Marketing) Selling and marketing expenses increased by 31% in 2019, largely attributable to the SiriusDecisions acquisition and planned sales employee growth Selling and Marketing Expenses (in millions, except percentages) | Metric | 2019 | 2018 | Absolute Increase | Percentage Increase | | :---------------------------------- | :----- | :----- | :---------------- | :------------------ | | Selling and marketing expenses | $172.9 | $131.8 | $41.0 | 31% | | As a percentage of total revenues | 37.4% | 36.9% | 0.5% | 1% | | Selling and marketing employees (at end of period) | 780 | 590 | 190 | 32% | - **$33.4 million** of the increase was due to the SiriusDecisions acquisition[121](index=121&type=chunk) - Forrester plans to increase sales employees by approximately **4% to 6%** during 2020[121](index=121&type=chunk) [General and Administrative](index=26&type=section&id=General%2

Forrester Research, Inc. (NASDAQ:FORR) Q4 2019 Earnings Conference Call February 13, 2020 4:30 PM ET Company Participants George Colony – Chairman of the Board and Chief Executive Officer Kelley Hippler – Chief Sales Officer Mike Doyle – Chief Financial Officer Conference Call Participants Trevor Romeo – William Blair & Company Vincent Colicchio – Barrington Research Associates Allen Klee – National Securities Corporation Anja Soderstrom – Sidoti & Company Operator Good afternoon. Thank you for joining toda ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q FOR THE QUARTERLY PERIOD ENDED September 30, 2019 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. (MARK ONE) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) 60 Aco ...

Forrester Research, Inc. (NASDAQ:FORR) Q3 2019 Earnings Conference Call October 24, 2019 4:30 PM ET Company Participants George Colony - Chairman and Chief Executive Officer Kelley Hippler - Chief Sales Officer Michael Doyle - Chief Financial Officer Conference Call Participants Trevor Romeo - William Blair & Company L.L.C. Vincent Colicchio - Barrington Research Associates Allen Klee - National Securities Corporation Operator Good afternoon, and thank you for joining today's call. With me today are George ...

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, 2019 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) DELAWARE 04-2797789 (State or other jurisdiction of incorporation or organ ...