Forrester Research(FORR) - 2024 Q2 - Quarterly Report

Cover Page / Filing Information Filing Details This section identifies Forrester Research, Inc. as an accelerated filer submitting its Form 10-Q quarterly report for the period ended June 30, 2024, noting 19,060,000 shares of common stock outstanding as of July 30, 2024 - Forrester Research, Inc. is an accelerated filer[2] - The company filed its Form 10-Q quarterly report for the period ended June 30, 2024[1] Shares Outstanding as of July 30, 2024 | Metric | Value | | :--- | :--- | | Common Stock Outstanding | 19,060,000 shares | PART I FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) This section presents Forrester Research, Inc.'s unaudited consolidated financial statements, including balance sheets, statements of operations, comprehensive income (loss), and cash flows, with detailed notes - Financial statements are unaudited, prepared in accordance with GAAP interim financial information and SEC Form 10-Q rules[13] Consolidated Balance Sheets Total assets decreased by 7.1% to $524.2 million as of June 30, 2024, from $564.2 million on December 31, 2023, primarily due to reductions in current assets, property and equipment, and right-of-use assets; total liabilities also decreased by 11.3% to $287.1 million Consolidated Balance Sheet Highlights (Units: Thousand USD) | Metric | June 30, 2024 | December 31, 2023 | Change | Change Percentage | | :--- | :--- | :--- | :--- | :--- | | Total Assets | $524,167 | $564,174 | $(40,007) | (7.1%) | | Total Liabilities | $287,113 | $323,909 | $(36,796) | (11.3%) | | Total Stockholders' Equity | $237,054 | $240,265 | $(3,211) | (1.3%) | | Cash and Cash Equivalents | $58,852 | $72,909 | $(14,057) | (19.3%) | | Accounts Receivable, Net | $47,702 | $58,999 | $(11,297) | (19.2%) | | Deferred Revenue | $164,117 | $156,798 | $7,319 | 4.7% | Consolidated Statements of Operations Total revenue for the three months ended June 30, 2024, decreased by 10% year-over-year to $121.8 million, with net income increasing by 18.6% to $6.3 million; for the six months, total revenue decreased by 11% to $221.9 million, resulting in a net loss of $0.4 million compared to a net income of $1.2 million in the prior year Consolidated Statements of Operations Highlights (Units: Thousand USD, except per share data) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | YoY Change | YoY Change Percentage | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $121,825 | $135,589 | $(13,764) | (10.2%) | | Operating Income | $11,314 | $8,288 | $3,026 | 36.5% | | Net Income (Loss) | $6,292 | $5,304 | $988 | 18.6% | | Diluted Earnings Per Share | $0.33 | $0.28 | $0.05 | 17.9% | | Six Months Ended June 30, 2024 | | | | | | Total Revenue | $221,902 | $249,259 | $(27,357) | (11.0%) | | Operating Income | $2,022 | $3,148 | $(1,126) | (35.8%) | | Net Income (Loss) | $(381) | $1,229 | $(1,610) | (131.0%) | | Diluted Earnings Per Share | $(0.02) | $0.06 | $(0.08) | (133.3%) | Consolidated Statements of Comprehensive Income (Loss) Comprehensive income for the three months ended June 30, 2024, was $6.1 million, slightly up from $6.0 million in the prior year; for the six months, the company reported a comprehensive loss of $2.5 million, a significant decline from $3.2 million comprehensive income in the prior year, mainly due to foreign currency translation losses Consolidated Statements of Comprehensive Income (Loss) Highlights (Units: Thousand USD) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Net Income (Loss) | $6,292 | $5,304 | $988 | | Foreign Currency Translation | $(211) | $746 | $(957) | | Net Change in Marketable Investments | $18 | $(11) | $29 | | Other Comprehensive Income (Loss) | $(193) | $735 | $(928) | | Comprehensive Income (Loss) | $6,099 | $6,039 | $60 | | Six Months Ended June 30, 2024 | | | | | Net Income (Loss) | $(381) | $1,229 | $(1,610) | | Foreign Currency Translation | $(2,179) | $1,952 | $(4,131) | | Net Change in Marketable Investments | $24 | $22 | $2 | | Other Comprehensive Income (Loss) | $(2,155) | $1,974 | $(4,129) | | Comprehensive Income (Loss) | $(2,536) | $3,203 | $(5,739) | Consolidated Statements of Cash Flows For the six months ended June 30, 2024, the company used $2.3 million in cash from operating activities, a significant decrease from $15.8 million cash inflow in the prior year; investing activities used $2.7 million, and financing activities used $8.3 million, primarily for common stock repurchases Consolidated Statements of Cash Flows Highlights (Units: Thousand USD) | Cash Flow Activity | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | Change | | :--- | :--- | :--- | :--- | | Net Cash from Operating Activities | $(2,295) | $15,788 | $(18,083) | | Net Cash from Investing Activities | $(2,676) | $3,444 | $(6,120) | | Net Cash from Financing Activities | $(8,274) | $(15,239) | $6,965 | | Net Change in Cash, Cash Equivalents, and Restricted Cash | $(14,073) | $6,417 | $(20,490) | | Cash, Cash Equivalents, and Restricted Cash, End of Period | $60,969 | $112,071 | $(51,102) | Notes to Consolidated Financial Statements This section provides detailed disclosures and explanations for the consolidated financial statements, covering accounting policies, specific asset and liability details, debt, leases, revenue recognition, and other financial matters Note 1 — Interim Consolidated Financial Statements Interim financial statements are prepared under GAAP and SEC Form 10-Q rules, omitting certain disclosures; management believes all necessary adjustments for fair presentation are included; the company is evaluating new FASB ASUs on segment reporting and income tax disclosures, effective in 2024 and 2025, respectively - Financial statements are unaudited and prepared in accordance with GAAP interim financial information, including all necessary recurring adjustments[13] - The company is evaluating the impact of ASU No. 2023-07 (segment reporting) and ASU No. 2023-09 (income tax disclosures) on its consolidated financial statements, effective January 1, 2024, and January 1, 2025, respectively[16] Cash, Cash Equivalents, and Restricted Cash (Units: Thousand USD) | Metric | June 30, 2024 | June 30, 2023 | | :--- | :--- | :--- | | Cash and Cash Equivalents on Balance Sheet | $58,852 | $109,951 | | Restricted Cash in Other Assets | $2,117 | $2,120 | | Total Cash, Cash Equivalents, and Restricted Cash on Cash Flow Statement | $60,969 | $112,071 | Note 2 — Marketable Investments Total marketable investments were $52.0 million as of June 30, 2024, primarily comprising money market funds ($35.2 million) and corporate bonds ($15.2 million); the portfolio showed a net unrealized loss of $0.049 million; no realized gains or losses from marketable securities sales occurred during the three and six months ended June 30, 2024, and 2023 Marketable Investments as of June 30, 2024 (Units: Thousand USD) | Type | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | | :--- | :--- | :--- | :--- | :--- | | Corporate Bonds | $15,264 | $2 | $(46) | $15,220 | | Federal Agency Bonds | $1,500 | — | $(3) | $1,497 | | Money Market Funds | $35,244 | — | — | $35,244 | | Total | $52,008 | $2 | $(49) | $51,961 | - No realized gains or losses from marketable securities sales occurred during the three and six months ended June 30, 2024, and 2023[17] Note 3 — Goodwill and Other Intangible Assets Goodwill slightly decreased to $242.9 million as of June 30, 2024, mainly due to foreign currency adjustments; the company performed its annual impairment test on November 30, 2023, and an interim test as of June 30, 2024, finding no impairment; finite-lived intangible assets, primarily customer relationships, totaled $32.6 million, with an estimated remaining amortization expense of $4.9 million for 2024 Goodwill Carrying Value (Units: Thousand USD) | Date | Total Goodwill | | :--- | :--- | | December 31, 2023 | $244,257 | | Foreign Currency Translation Adjustment | $(1,333) | | June 30, 2024 | $242,924 | - No goodwill impairment was identified in the annual test as of November 30, 2023, or the interim test as of June 30, 2024[20] Finite-Lived Intangible Assets, Net (Units: Thousand USD) | Asset Type | June 30, 2024 | | :--- | :--- | | Customer Relationships | $31,341 | | Technology | $280 | | Trademarks | $941 | | Total | $32,562 | Estimated Intangible Asset Amortization Expense (Units: Thousand USD) | Year | Amount | | :--- | :--- | | 2024 (Remaining) | $4,890 | | 2025 | $8,874 | | 2026 | $8,392 | | 2027 | $8,324 | | 2028 | $2,082 | | Total | $32,562 | Note 4 — Debt The company has a $150 million revolving credit facility, maturing in December 2026, with an outstanding balance of $35 million as of June 30, 2024; the facility includes an expansion feature up to $50 million, and the contractual annualized interest rate was 6.69% as of June 30, 2024; the company is in full compliance with all loan covenants - The company has a $150 million revolving credit facility maturing in December 2026, with an outstanding balance of $35 million as of June 30, 2024[24][25] - The credit facility includes an expansion feature up to $50 million, with $114.4 million available for borrowing as of June 30, 2024[24][25] - The contractual annualized interest rate was 6.69% as of June 30, 2024, and the company is in full compliance with all loan covenants[25] Note 5 — Leases All company leases are operating leases, primarily for office space; total lease costs for the three and six months ended June 30, 2024, were $4.0 million and $8.4 million, respectively; the weighted-average remaining lease term is 4.0 years, with a weighted-average discount rate of 4.2%; during the six months ended June 30, 2024, the company recorded $3.2 million in right-of-use asset impairment and $0.6 million in leasehold improvement impairment due to office closures Total Lease Costs (Units: Thousand USD) | Period | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | | Total Lease Costs | $4,036 | $4,439 | $8,444 | - As of June 30, 2024, the weighted-average remaining lease term for operating leases is 4.0 years, with a weighted-average discount rate of 4.2%[27] - During the six months ended June 30, 2024, the company recorded $3.2 million in right-of-use asset impairment and $0.6 million in leasehold improvement impairment due to the closure of its San Francisco office[30] Note 6 – Revenue and Related Matters Total revenue for the three and six months ended June 30, 2024, was $121.8 million and $221.9 million, respectively, with North America being the largest geographical contributor; deferred revenue increased to $164.1 million as of June 30, 2024; the company expects to recognize approximately $359.6 million in revenue from remaining performance obligations over the next 24 months; the allowance for expected credit losses increased to $0.753 million Revenue by Geographic Region (Units: Thousand USD) | Geographic Region | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | North America | $99,049 | $178,678 | | Europe | $15,004 | $28,441 | | Asia Pacific | $5,310 | $10,200 | | Other | $2,462 | $4,583 | | Total | $121,825 | $221,902 | - Deferred revenue increased to $164.1 million as of June 30, 2024, from $156.8 million as of December 31, 2023[6] - As of June 30, 2024, approximately $359.6 million in revenue is expected to be recognized from remaining performance obligations over the next 24 months[34] Allowance for Expected Credit Losses (Units: Thousand USD) | Metric | Amount | | :--- | :--- | | Balance as of December 31, 2023 | $574 | | Provision for Expected Credit Losses | $368 | | Write-offs | $(189) | | Balance as of June 30, 2024 | $753 | Note 7 — Derivatives and Hedging The company uses forward foreign exchange contracts to hedge foreign currency fluctuations but does not designate them as accounting hedges; all five contracts entered into during the six months ended June 30, 2024, were settled by period-end, resulting in a net loss of $0.014 million, recognized in other income, net - The company uses forward foreign exchange contracts to hedge foreign currency fluctuations but does not designate them as accounting hedges[38] Impact of Derivative Contracts on Other Income, Net (Units: Thousand USD) | Period | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Amount Recognized in Other Income, Net | $1 | $(14) | Note 8 — Fair Value Measurements The company regularly measures certain financial assets and liabilities at fair value, primarily cash equivalents and marketable investments; as of June 30, 2024, total financial assets measured at fair value were $67.2 million, with $50.5 million classified as Level 1 (money market funds) and $16.7 million as Level 2 (marketable investments); no transfers between fair value levels occurred during the six months ended June 30, 2024 Fair Value Hierarchy of Financial Assets as of June 30, 2024 (Units: Thousand USD) | Asset Type | Level 1 | Level 2 | Total | | :--- | :--- | :--- | :--- | | Money Market Funds | $50,486 | — | $50,486 | | Marketable Investments | — | $16,717 | $16,717 | | Total Assets | $50,486 | $16,717 | $67,203 | - No transfers between fair value levels occurred for assets or liabilities during the six months ended June 30, 2024[40] Note 9 — Income Taxes Income tax expense for the six months ended June 30, 2024, was $3.2 million, with an effective tax rate of 113.7%, significantly higher than 54.3% in the prior year; this increase is primarily attributed to equity compensation settlements, foreign withholding taxes from foreign subsidiary dissolutions, and increased valuation allowance for unrealizable state NOL carryforwards from domestic subsidiary dissolutions; the company anticipates a full-year effective tax rate between 65% and 80% for 2024 Income Tax Expense and Effective Tax Rate (Units: Thousand USD) | Metric | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Income Tax Expense | $3,167 | $1,460 | | Effective Tax Rate | 113.7% | 54.3% | - The increase in the effective tax rate for the six months ended June 30, 2024, was primarily due to equity compensation settlements, foreign withholding taxes, and increased valuation allowance for state NOL carryforwards[42] - The company anticipates a full-year effective tax rate between 65% and 80% for 2024[78] Note 10 — Accumulated Other Comprehensive Loss ("AOCL") Accumulated other comprehensive loss increased to $6.7 million as of June 30, 2024, from $4.6 million on December 31, 2023; this change was primarily driven by $2.2 million in foreign currency translation losses during the six months ended June 30, 2024 Accumulated Other Comprehensive Loss (AOCL) (Units: Thousand USD) | Metric | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total AOCL | $(6,726) | $(4,571) | | Foreign Currency Translation (Six Months) | $(2,179) | Not Applicable (Prior Year End) | | Net Unrealized Gains, Net of Tax (Six Months) | $24 | Not Applicable (Prior Year End) | - The company does not record tax provisions or benefits for foreign currency translation adjustments as it intends to permanently reinvest the undistributed earnings of its foreign subsidiaries[45] Note 11 — Net Income (Loss) Per Common Share Diluted net income per common share for the three months ended June 30, 2024, was $0.33, up from $0.28 in the prior year; for the six months, diluted net loss per common share was $0.02, compared to diluted net income of $0.06 in the prior year; the number of options and restricted stock units excluded from diluted EPS calculations due to anti-dilutive effects significantly increased Net Income (Loss) Per Common Share (Units: Thousand USD, except per share data) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | Basic Earnings (Loss) Per Share | $0.33 | $0.28 | $(0.02) | $0.06 | | Diluted Earnings (Loss) Per Share | $0.33 | $0.28 | $(0.02) | $0.06 | | Diluted Weighted-Average Common Shares Outstanding | 19,124 | 19,258 | 19,189 | 19,214 | | Options and Restricted Stock Units Excluded (Anti-Dilutive) | 1,620 | 706 | 1,089 | 657 | Note 12 — Stockholders' Equity Total stockholders' equity slightly decreased to $237.1 million as of June 30, 2024, from $240.3 million on December 31, 2023; during the six months ended June 30, 2024, the company repurchased approximately 0.4 million shares of common stock for a total cost of $8.0 million, with $87.9 million remaining under the repurchase authorization; equity compensation expense for the six months ended June 30, 2024, was $7.6 million Components of Stockholders' Equity (Units: Thousand USD) | Metric | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Common Stock, $0.01 Par Value | $249 | $247 | | Additional Paid-in Capital | $285,395 | $278,057 | | Retained Earnings | $177,300 | $177,681 | | Treasury Stock | $(219,164) | $(211,149) | | Accumulated Other Comprehensive Loss | $(6,726) | $(4,571) | | Total Stockholders' Equity | $237,054 | $240,265 | - During the six months ended June 30, 2024, the company repurchased approximately 0.4 million shares of common stock for a total cost of $8.0 million[53] - As of June 30, 2024, approximately $87.9 million remained under the stock repurchase authorization[53][83] Equity Compensation Expense (Units: Thousand USD) | Expense Category | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Services and Fulfillment Costs | $2,513 | $4,635 | | Sales and Marketing | $559 | $1,158 | | General and Administrative | $953 | $1,806 | | Total | $4,025 | $7,599 | Note 13 — Restructuring and Related Costs The company incurred restructuring costs in January 2023, May 2023, and February 2024 due to workforce reductions and office closures; the February 2024 action resulted in $2.8 million in severance and related costs and $3.8 million in restructuring charges (including right-of-use asset and leasehold improvement impairments) recorded in Q1 2024; all accrued amounts are expected to be fully paid by the end of 2024 - In February 2024, the company implemented a workforce reduction of approximately 3%, recording $2.8 million in severance and related costs in Q1 2024[56] - $3.8 million in restructuring charges were recorded in Q1 2024, related to the closure of one floor of the San Francisco office, including $3.2 million in right-of-use asset impairment and $0.6 million in leasehold improvement impairment[56] Accrued Activity for February 2024 Restructuring Actions (Units: Thousand USD) | Metric | Amount | | :--- | :--- | | Accrued as of December 31, 2023 | $732 | | Additional Restructuring and Related Costs | $6,662 | | Non-Cash Charges (Included Above) | $(3,806) | | Cash Payments | $(2,779) | | Accrued as of June 30, 2024 | $809 | Note 14 — Operating Segments The company operates in three reportable segments: Research, Consulting, and Events; revenue decreased across all segments for the three and six months ended June 30, 2024, compared to the prior year, primarily due to lower contract value, reduced client bookings, and decreased sponsorship/ticket sales; segment expenses generally decreased due to workforce reductions - The company operates in three reportable segments: Research, Consulting, and Events, with performance assessed based on segment revenue and direct expenses[58][79] Segment Total Revenue (Units: Thousand USD) | Segment | Three Months Ended June 30, 2024 | YoY Change | Six Months Ended June 30, 2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | | Research Segment | $89,163 | (6%) | $170,387 | (7%) | | Consulting Segment | $19,311 | (16%) | $37,809 | (19%) | | Events Segment | $13,351 | (25%) | $13,706 | (28%) | | Consolidated Total | $121,825 | (10%) | $221,902 | (11%) | Segment Total Expenses (Units: Thousand USD) | Segment | Three Months Ended June 30, 2024 | YoY Change | Six Months Ended June 30, 2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | | Research Segment | $(31,974) | (2%) | $(65,488) | (4%) | | Consulting Segment | $(9,504) | (17%) | $(19,601) | (18%) | | Events Segment | $(10,515) | (0%) | $(12,001) | (1%) | | Consolidated Total | $(51,993) | (5%) | $(97,090) | (7%) | Note 15 — Contingencies The company may face legal proceedings and civil and regulatory claims in its ordinary course of business; a $4.8 million wage-related legal settlement accrued in Q1 2023 was fully paid in Q1 2024 - The company records accrued legal contingencies when a liability is probable and the amount can be reasonably estimated[61] - A $4.8 million wage-related legal settlement accrued in Q1 2023 was fully paid in Q1 2024[61] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial performance and condition, including an operational overview, detailed analysis of revenue and expenses by segment, and a discussion of liquidity and capital resources; it highlights the impact of macroeconomic conditions and the transition to the Forrester Decisions product platform on key metrics Overview Company revenue is derived from research products and services, electronic "reprint" licensing, consulting projects, and events, with a focus on "Contract Value" (CV) products due to their high profitability and renewal rates; as of June 30, 2024, macroeconomic conditions and the ongoing transition to the Forrester Decisions product platform pressured key metrics, leading to a 3% decline in contract value and a 15% year-over-year decrease in client count - Revenue is derived from research products and services, electronic "reprint" licensing, consulting projects and services, and events[63] - The company focuses on "Contract Value" (CV) products, which are its most profitable and historically have high renewal rates[63] Key Metrics as of June 30, 2024 (Units: Million USD) | Metric | June 30, 2024 | June 30, 2023 | Absolute Change | Change Percentage | | :--- | :--- | :--- | :--- | :--- | | Contract Value (CV) | $323.0 | $333.2 | $(10.2) | (3%) | | Client Retention Rate | 73% | 74% | (1) percentage point | | | Wallet Retention Rate | 89% | 89% | — | | | Client Count | 2,220 | 2,604 | (384) | (15%) | - The decline in contract value and client count is attributed to macroeconomic conditions (funding and budget pressures on smaller tech clients and the tech industry, and uncertain economic conditions from inflation, high interest rates, and geopolitical instability over the past year) and the ongoing transition to the Forrester Decisions product platform[65] - As of June 30, 2024, approximately 73% of the overall contract value is from the Forrester Decisions product platform, projected to reach 80% by the end of 2024[65] Results of Operations Total revenue decreased by 10% and 11% for the three and six months ended June 30, 2024, respectively, primarily due to declines across all revenue streams (Research, Consulting, Events); operating expenses generally decreased, with restructuring costs significantly lower year-over-year; net income increased for the three-month period but turned into a net loss for the six-month period Revenue Breakdown and Changes (Units: Million USD) | Revenue Type | Three Months Ended June 30, 2024 | % of Total Revenue (2024) | Three Months Ended June 30, 2023 | % of Total Revenue (2023) | YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Research Revenue | $83.7 | 68.7% | $87.7 | 64.7% | (5%) | | Consulting Revenue | $24.8 | 20.4% | $30.0 | 22.1% | (17%) | | Events Revenue | $13.4 | 10.9% | $17.9 | 13.2% | (25%) | | Total Revenue | $121.8 | 100.0% | $135.6 | 100.0% | (10%) | | Six Months Ended June 30, 2024 | | | | | | | Research Revenue | $160.2 | 72.2% | $168.6 | 67.6% | (5%) | | Consulting Revenue | $48.0 | 21.6% | $61.7 | 24.8% | (22%) | | Events Revenue | $13.7 | 6.2% | $18.9 | 7.6% | (28%) | | Total Revenue | $221.9 | 100.0% | $249.3 | 100.0% | (11%) | - Research revenue decreased by 5% for both the three and six months ended June 30, 2024, primarily due to lower contract value (CV) and reduced revenue from reprint products and other smaller and discontinued offerings[67][68] - Consulting revenue decreased by 17% and 22% for the three and six months, respectively, driven by fewer client bookings and lower service delivery volumes[68] - Events revenue decreased by 25% and 28% for the three and six months, respectively, primarily due to lower sponsorship and event ticket revenue[68] Operating Expenses and Changes (Units: Million USD) | Expense Type | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Services and Fulfillment Costs | $51.2 | $54.6 | (6%) | | Sales and Marketing | $40.3 | $41.6 | (3%) | | General and Administrative | $14.4 | $15.3 | (6%) | | Amortization of Intangible Assets | $2.5 | $3.1 | (19%) | | Restructuring Costs | $0.1 | $10.5 | (99%) | | Six Months Ended June 30, 2024 | | | | | Services and Fulfillment Costs | $95.9 | $103.9 | (8%) | | Sales and Marketing | $79.7 | $83.1 | (4%) | | General and Administrative | $28.5 | $36.5 | (22%) | | Amortization of Intangible Assets | $5.0 | $6.1 | (18%) | | Restructuring Costs | $6.7 | $12.1 | (45%) | - Other income, net, increased by $0.5 million and $1.2 million for the three and six months ended June 30, 2024, respectively, primarily due to higher interest income[78] Segment Results All three segments (Research, Consulting, Events) experienced revenue declines for the three and six months ended June 30, 2024, compared to the prior year; Research revenue decreased due to lower contract value and specific product sales; Consulting revenue declined due to reduced client bookings; Events revenue was impacted by decreased sponsorship and ticket sales; expenses in Research and Consulting generally decreased due to workforce reductions, while Event expenses remained consistent Year-over-Year Change in Segment Revenue | Segment | Three Months Ended June 30, 2024 YoY Change | Six Months Ended June 30, 2024 YoY Change | | :--- | :--- | :--- | | Research Segment | (6%) | (7%) | | Consulting Segment | (16%) | (19%) | | Events Segment | (25%) | (28%) | | Consolidated Total | (10%) | (11%) | - Research segment revenue decreased primarily due to lower contract value (CV) and reduced revenue from reprint products and other smaller/discontinued offerings[81] - Consulting segment revenue decreased primarily due to fewer client bookings and lower delivery volumes of consulting services[82] - Events segment revenue decreased primarily due to lower sponsorship revenue and event ticket revenue[82] Year-over-Year Change in Segment Expenses | Segment | Three Months Ended June 30, 2024 YoY Change | Six Months Ended June 30, 2024 YoY Change | | :--- | :--- | :--- | | Research Segment | (2%) | (4%) | | Consulting Segment | (17%) | (18%) | | Events Segment | (0%) | (1%) | | Consolidated Total | (5%) | (7%) | Liquidity and Capital Resources For the six months ended June 30, 2024, the company used $2.3 million in cash from operating activities, a significant decrease from $15.8 million cash inflow in the prior year, mainly due to reduced cash from accounts receivable, deferred revenue, and lower incentive compensation accruals; the company has a $150 million revolving credit facility with $35 million outstanding and $87.9 million remaining under stock repurchase authorization; management believes current cash balances and operating cash flows will meet short-term and long-term funding needs - Net cash used in operating activities was $2.3 million for the six months ended June 30, 2024, a $18.1 million decrease from the prior year, primarily due to reduced cash from accounts receivable and deferred revenue, and lower incentive compensation accruals[83] - The company used $2.7 million in cash for investing activities and $8.3 million for financing activities during the six months ended June 30, 2024, primarily for common stock repurchases[83] - As of June 30, 2024, the company held $110.8 million in cash, cash equivalents, and marketable investments, with $73.8 million held outside the U.S. for permanent reinvestment[83] - The company has a $150 million revolving credit facility with an outstanding balance of $35 million and $114.4 million available for borrowing as of June 30, 2024[83] - As of June 30, 2024, approximately $87.9 million remained under the stock repurchase authorization[83] Recent Accounting Pronouncements This section refers to Note 1 for details on recent accounting pronouncements, including ASU No. 2023-07 (segment reporting) and ASU No. 2023-09 (income tax disclosures), which the company is currently evaluating for impact - Refer to Note 1 for detailed information on recent accounting pronouncements, including ASU No. 2023-07 (segment reporting) and ASU No. 2023-09 (income tax disclosures)[85] Critical Accounting Policies and Estimates This section refers to the company's annual report on Form 10-K for the year ended December 31, 2023, for information on critical accounting policies and estimates, noting no significant changes since that report - No significant changes to critical accounting policies and estimates have occurred since the annual report on Form 10-K for the year ended December 31, 2023[86] Item 3. Quantitative and Qualitative Disclosures About Market Risk No significant changes have occurred in the company's market risk sensitivity assessment since the disclosure in its annual report on Form 10-K for the year ended December 31, 2023 - No significant changes have occurred in the market risk sensitivity assessment since the disclosure in the company's annual report on Form 10-K for the year ended December 31, 2023[88] Item 4. Controls and Procedures Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2024, providing reasonable assurance of achieving control objectives; no significant changes in internal control over financial reporting occurred this quarter Evaluation of Disclosure Controls and Procedures As of June 30, 2024, management, with the participation of the CEO and CFO, concluded that the company's disclosure controls and procedures were effective, providing reasonable assurance of achieving the intended control objectives - As of June 30, 2024, the company's disclosure controls and procedures were evaluated and deemed effective, providing reasonable assurance of achieving control objectives[89] Changes in Internal Control Over Financial Reporting No significant changes in the company's internal control over financial reporting occurred during the quarter ended June 30, 2024, nor are any reasonably likely to materially affect internal control over financial reporting - No significant changes in internal control over financial reporting occurred during the quarter ended June 30, 2024[90] PART II OTHER INFORMATION Item 1. Legal Proceedings This section details legal proceedings and claims the company may face in its ordinary course of business by referencing contingency information in Note 15 to the financial statements - Legal proceedings information is disclosed by reference to Note 15 — Contingencies[92] Item 1A. Risk Factors This section states that the risk factors discussed in the company's annual report on Form 10-K for the year ended December 31, 2023, remain applicable, and no new material risks have been identified - The risk factors described in the annual report on Form 10-K for the year ended December 31, 2023, remain applicable, and no new material risks have been identified[93] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The Board has authorized a total of $610 million for common stock repurchases, including an additional $25 million authorized in April 2024; during the quarter ended June 30, 2024, the company repurchased 202,000 shares of common stock at an average price of $19.70 in April and $18.82 in May, with $87.869 million remaining under the repurchase authorization - The Board has authorized a total of $610 million for common stock repurchases, including an additional $25 million authorized in April 2024[94] Common Stock Repurchases for Q2 2024 | Period | Total Number of Shares Repurchased (Shares) | Average Price Paid Per Share (USD) | Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plan or Program (Thousand USD) | | :--- | :--- | :--- | :--- | | April 1 - April 30 | 132,000 | $19.70 | $89,186 | | May 1 - May 31 | 70,000 | $18.82 | $87,869 | | June 1 - June 30 | — | — | $87,869 | | Total for the Quarter | 202,000 | Not Applicable | Not Applicable | Item 3. Defaults Upon Senior Securities This item is not applicable to the company - This item is not applicable[95] Item 4. Mine Safety Disclosures This item is not applicable to the company - This item is not applicable[96] Item 5. Other Information During the three-month period ended June 30, 2024, no directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements - No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three-month period ended June 30, 2024[97] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including organizational documents, certifications, and XBRL-related files - Exhibits include amended and restated certificate of incorporation, amended and restated bylaws, specimen common stock certificate, and various certifications (Chief Executive Officer, Chief Financial Officer, Sarbanes-Oxley Act Section 906)[98] - XBRL instance document, taxonomy extension schema document, and cover page interactive data file are also filed as exhibits[98] SIGNATURES Signature Details This report was duly signed by L. Christian Finn, Chief Financial Officer of Forrester Research, Inc., on August 5, 2024 - The report was signed by L. Christian Finn, Chief Financial Officer, on August 5, 2024[100]