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Forrester Research(FORR) - 2025 Q2 - Earnings Call Transcript
2025-07-31 21:30
Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $111.7 million, a decrease of 8% compared to $121.8 million in Q2 2024 [22] - Research revenue was $77.9 million, down 7% year-over-year, while consulting revenue was $23.4 million, also down 5% [22][23] - Net income decreased by 24% to $9.8 million, with earnings per share at $0.51 compared to $0.68 in the prior year [27][28] - Operating income decreased by 24% to $13.7 million, representing 12.2% of revenue [26] Business Line Data and Key Metrics Changes - Research and consulting revenues improved from Q1, with declines of 5% compared to 11% in Q1 [20][21] - Events revenue was $10.2 million, a decrease of 23% year-over-year, despite increased attendance and satisfaction scores [25][26] - Client retention increased to 74%, up one point from the previous quarter [23] Market Data and Key Metrics Changes - CV (contract value) declined by 7%, mirroring Q1 performance [21] - The government sector showed building momentum, with significant contracts booked with U.S. state and local governments and European federal agencies [8][9] Company Strategy and Development Direction - The company is focusing on enhancing its sales organization and improving the sales pipeline, with a 15% increase in the total sales pipeline from Q1 [10][46] - New research frameworks, such as Buying Networks and Total Experience Score, were introduced to strengthen market position [12][32] - The events business is being restructured to align with marketing efforts to drive contract value expansion [16][20] Management's Comments on Operating Environment and Future Outlook - The management expressed uncertainty in the economic outlook for the second half of the year but maintained margin and EPS guidance [8][30] - The company anticipates improved performance in the government sector and from its Forrester Decisions product portfolio [21][30] Other Important Information - The generative AI tool, iZOLA, has seen a 22% increase in clients using it, with prompts up 44% [18] - The company plans to reinstate its stock repurchase program in the second half of the year [28] Q&A Session Summary Question: What initiatives are being taken to improve the event business and sponsorships? - The company is modernizing sponsorship offerings and ensuring sales teams are skilled in selling outcome-based experiences [35][36] Question: How is the trend for multiyear deals? - There is a positive trend in multiyear contracts, with 72% of contract value now in multiyear agreements, up eight points year-over-year [38][39] Question: Is the sales force fully ramped? - The sales force is still being built out, with 75% having over 25 months of experience, and attrition is in line with expectations [41][42] Question: How is the sales pipeline performing? - The sales pipeline increased by 15% quarter-over-quarter, but conversion rates need improvement [46][47] Question: What is being done to improve conversion rates? - The focus is on early involvement in the sales process and ensuring that potential buyers are committed to the purchasing process [53][55]
Forrester Research(FORR) - 2025 Q2 - Earnings Call Presentation
2025-07-31 20:30
Forrester's Business Overview - Forrester is a research and advisory firm that helps businesses accelerate growth through customer obsession[4] - The company has a global reach with operations in Asia Pacific, Europe, and North America, employing approximately 1,500 people[5] - 61% of Fortune 100 companies are Forrester's clients[5] Financial Performance and Strategy - In 2024, approximately 73% of Forrester's total revenue came from Research, while approximately 27% came from Consulting and Events[5] - Forrester Decisions accounted for approximately 80% of the company's contract value in 2024[5] - Forrester's adjusted EBITDA for 2024 was $46.1 million[5] - Forrester estimates the total available research market opportunity to be $78 billion, growing to $115 billion[9] Q2 2025 Financial Results - Consolidated revenue for Q2 2025 was $111.7 million, a decrease of 8% compared to the previous year[57] - Research revenue for Q2 2025 was $77.9 million, a decrease of 7% compared to the previous year[57] - Adjusted EPS for Q2 2025 was $0.51, a decrease of 25% compared to the previous year[57] - Forrester's CV(Contract Value) in Q2 2025 was $288.7 million[62]
Forrester Research(FORR) - 2025 Q1 - Earnings Call Transcript
2025-05-06 21:32
Financial Data and Key Metrics Changes - The company generated $89.9 million in revenue, a decrease of 10% compared to $100.1 million in the prior year period [19] - Net income decreased by 28% to $2 million, with earnings per share at $0.11 compared to $0.14 in the prior year [23] - Operating income decreased by 27% to $2.5 million, representing 2.8% of revenue, down from 3.4% in the previous year [22] - Free cash flow was positive at $26.1 million, reflecting prudent cash management [17] Business Line Data and Key Metrics Changes - Research revenues decreased by 11%, with subscription research products down 6% [20] - Consulting business revenues were $21.4 million, down 7% compared to the prior year, while Advisory showed single-digit growth [21] - Events business revenues were insignificant as no events were held during the quarter [21] Market Data and Key Metrics Changes - Economic uncertainty has led to budget tightening and spending pauses, particularly in verticals like discrete manufacturing and retail [10] - The government sector, which constitutes less than 6% of total contract value, experienced minimal contract cancellations, but future renewals are expected to remain tight [9][19] Company Strategy and Development Direction - The company is focusing on optimizing its go-to-market strategy to align with its product platform, Forrester Decisions [6] - A new wave of research was launched to help companies manage through volatility, covering various topics including B2C and B2B marketing, technology, and cybersecurity [10] - The company aims to leverage its strengths in AI and cybersecurity to penetrate government accounts [11][12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that the first quarter did not meet expectations due to economic instability but expressed confidence in the company's ability to assist clients during volatile times [15][27] - The guidance for 2025 remains unchanged, with expected revenue between $400 million and $415 million, reflecting a decline of 4% to 8% compared to 2024 [26] Other Important Information - The company recorded a goodwill impairment charge of approximately $84 million due to a decline in stock price [24] - The company has approximately $80 million of stock repurchase authorization intact and a strong balance sheet with over $134 million in cash [23] Q&A Session Summary Question: Guidance and macro uncertainty - Management maintained guidance despite macro uncertainty, citing a conservative outlook and potential opportunities in the government sector [33][36] Question: Sales pipeline and performance - Sales pipelines are improving, with a 33% increase per account executive, although sales cycles are prolonged by about 10-12 days [43][53] Question: Client retention and sector challenges - The decline in total clients is primarily among smaller clients, with a focus on selling team solutions to improve retention [65][66]
Forrester Research(FORR) - 2025 Q1 - Earnings Call Transcript
2025-05-06 20:30
Financial Data and Key Metrics Changes - Forrester generated $89.9 million in revenue for Q1 2025, a decrease of 10% compared to $100.1 million in the prior year period [18] - The company reported a net income of $2 million and earnings per share of $0.11, down from $2.8 million and $0.14 in Q1 2024, representing a significant decline [23] - Operating income decreased by 27% to $2.5 million, or 2.8% of revenue, compared to 3.4% in the same quarter last year [22] - Free cash flow for the quarter was $26.1 million, reflecting prudent cash management [17] Business Line Data and Key Metrics Changes - Research revenues decreased by 11% year-over-year, with subscription research products down 6% [20] - Consulting revenues were $21.4 million, down 7% compared to the prior year, although the Advisory segment showed single-digit growth [21] - The events business generated insignificant revenues as no events were held during the quarter [21] Market Data and Key Metrics Changes - The company experienced a 7% decline in contract value (CV) for the quarter, with expectations of flat to slightly down CV for the year [17] - Economic uncertainty led to budget tightening and spending pauses, particularly in verticals like discrete manufacturing and retail [9] - The government sector, which constitutes less than 6% of total contract value, faced some contract cancellations, but the overall impact was minimal [19] Company Strategy and Development Direction - Forrester is focusing on optimizing its go-to-market strategy to align with its product platform, Forrester Decisions [6] - The company launched a new wave of research aimed at helping clients manage through economic volatility, covering various topics including B2C and B2B marketing, technology, and cybersecurity [10] - Forrester is expanding its research in artificial intelligence and has developed its own large language model, IZOLA, to assist clients [12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that economic volatility is expected to persist throughout 2025, impacting client spending and project initiation [20] - The company remains optimistic about its ability to assist clients in navigating uncertain times, emphasizing its role as a partner in optimizing costs [26] - Guidance for 2025 remains unchanged, with expected revenue between $400 million and $415 million, reflecting a decline of 4% to 8% compared to 2024 [25] Other Important Information - A goodwill impairment charge of approximately $84 million was recorded due to a decline in stock price, which does not reflect lowered long-term expectations for the business [24] - The company has approximately $80 million of stock repurchase authorization intact and a strong balance sheet with over $134 million in cash [23] Q&A Session Summary Question: Guidance and macro uncertainty - Management maintained guidance despite macro uncertainty, citing a conservative outlook and potential opportunities in the government sector [32][34] Question: Sales pipeline and execution - Sales pipelines are improving, with a 33% increase per account executive, although sales cycles are taking longer due to increased scrutiny [42][53] Question: Sector challenges - Challenges are being observed across various sectors, particularly in manufacturing and financial services, with significant impacts noted in Asia and Europe due to tariffs [60] Question: Client retention and small clients - The decline in total clients is primarily among smaller clients, with a focus on ensuring the right product fit for retention [66][68]