FORRESTER RESEARCH, INC.

Forrester Research, Inc. operates as a global independent research and advisory firm, empowering leaders in technology, customer experience, digital, marketing, sales, and product functions to accelerate growth through customer obsession. The company's offerings are rooted in rigorous methodologies, extensive surveys, proprietary data, and trusted human insights, combined with generative AI capabilities, to provide clients with trusted insights and advice. The market dynamics, including empowered customers, changing business-to-business buying behaviors, and rapid advancements in AI, have fundamentally altered the business and technology landscape, creating an increasing need for trusted guidance. Forrester believes it is well-positioned to address this need through its complementary combination of human intelligence and AI.

The foundation of Forrester's business model is to help business and technology leaders tackle their priorities and drive growth through customer obsession. The company's offerings are designed to expand contract value (CV), which is defined as the annualized value of all recurring research-related contracts in effect at a specific point in time. CV products primarily consist of subscription research products, while consulting and events play complementary roles in driving CV growth. Multi-year CV product relationships enable the company to assist clients in formulating their vision and translating plans into implementation over time, which is expected to result in predictable and profitable revenue streams for investors.

Forrester delivers its products and services globally through three business segments: Research, Consulting, and Events. The Research segment provides objective, independent, and data-driven research insights, including future trends, predictions, market forecasts, consumer and business buyer data, best practice models, benchmarking data, and vendor evaluations. This research is accessible through the proprietary generative AI tool, Forrester AI, and includes ongoing support from Forrester analysts. The Consulting segment helps clients implement customer-obsessed strategies through consulting projects, content marketing, and advisory services. The Events segment hosts multiple events across North America, Europe, and Asia-Pacific, designed to provide clients with insights and actionable advice, and serves as a primary driver for CV growth by increasing contract renewal rates and new client acquisition.

For the fiscal year ended December 31, 2025, Forrester reported total revenues of $396.888 million ¹, a decrease of 8% from $432.470 million ² in 2024. The company experienced a net loss of $(119.360) million ³ in 2025, compared to a net loss of $(5.747) million ⁴ in 2024. Basic and diluted loss per common share were both $(6.28) ⁵ in 2025, compared to $(0.30) ⁶ in 2024. Gross profit, calculated as total revenues less cost of services and fulfillment, was $226.171 million ⁷ in 2025, resulting in a gross margin of 56.98% ⁸. Operating loss was $(113.173) million ⁹ in 2025, compared to operating income of $0.740 million ¹⁰ in 2024, leading to an operating margin of (28.51)% ¹¹ in 2025. Cash and cash equivalents stood at $63.335 million ¹² as of December 31, 2025, with total debt of $35.0 million ¹³.

Comparing 2025 to 2024, Research revenues decreased by 7% to $295.607 million ¹⁴ from $316.739 million ¹⁵. Consulting revenues decreased by 9% to $88.192 million ¹⁶ from $97.254 million ¹⁷. Events revenues saw the largest decline, decreasing by 29% to $13.089 million ¹⁸ from $18.477 million ¹⁹. Research revenues as a percentage of total revenues increased from approximately 73% ²⁰ in 2024 to approximately 75% ²¹ in 2025. Contract value decreased 6% to $292.4 million ²² at December 31, 2025, from $311.9 million ²³ at December 31, 2024. Client retention increased by 4 percentage points to 77% ²⁴ in 2025 from 73% ²⁵ in 2024, while wallet retention decreased by 2 percentage points to 87% ²⁶ from 89% ²⁷.

During 2025, Forrester recorded goodwill impairment charges totaling $110.707 million ²⁸ related to its Research reporting unit, with $83.9 million ²⁹ recorded in Q1 2025 and an additional $26.8 million ³⁰ in Q4 2025. These impairments were triggered by a sustained decline in stock price and market capitalization, macroeconomic conditions, and a larger-than-expected decline in contract bookings. The company also implemented a workforce reduction of approximately 6% ³¹ in January 2025, incurring $1.8 million ³² in severance and related costs during 2025. A further workforce reduction of approximately 8% ³³ was implemented in February 2026, with $8.8 million ³⁴ in severance and related costs recorded in Q4 2025. The FeedbackNow product line was divested in Q3 2024 for approximately $17.6 million ³⁵, resulting in a pre-tax loss of $1.8 million ³⁶ on the sale.

Forrester anticipates that its 2026 consulting revenues will decline in the low 20 percent range ³⁷ on a year-over-year basis, primarily due to the cessation of strategy consulting engagements. The company announced in February 2026 that it would discontinue selling strategy consulting engagements and plans to fulfill its existing backlog of these engagements during 2026. The ongoing consulting business will focus on content marketing consulting and advisory services.

A major growth area for Forrester is its proprietary generative AI tool, Forrester AI (formerly Izola), which was introduced in October 2023. This tool allows clients to query the company's research database to provide immediate, trusted guidance. Forrester is also in the process of implementing various other generative AI initiatives within the company. The company believes that generative AI technologies offer significant opportunities, and its combination of trusted human intelligence and AI is well-positioned to address the increasing need for trusted guidance and insights in a rapidly changing business and technology landscape.

Regarding operational outlook, Forrester implemented a workforce reduction of approximately 8% ³⁸ across various geographies and functions in February 2026 to better align its cost structure with the revenue outlook for 2026. The company anticipates total costs for this action to be in a range of $10.0 million to $10.5 million ³⁹, principally related to cash severance and related benefit costs for terminated employees, with the majority of these cash costs expected to be expended in 2026. Additionally, the company expects to incur approximately $3.0 million ⁴⁰ for contract termination costs, with $1.1 million ⁴¹ already recorded during the fourth quarter of 2025. Forrester has also approved plans to close certain smaller offices both inside and outside the United States.

For planned capital allocation, Forrester expects amortization expense related to its intangible assets to be approximately $8.3 million ⁴² for the year ending December 31, 2026. The company intends to renovate floors four to six of its Cambridge, Massachusetts headquarters and currently expects to incur capital expenditures of approximately $28.0 million ⁴³ during the first half of 2026 for this project. A tenant improvement allowance of $17.2 million ⁴⁴ is expected to be received in the first half of 2026, which will be classified as operating cash flows. As of December 31, 2025, the remaining stock repurchase authorization was approximately $77.5 million ⁴⁵. The company does not currently pay cash dividends on its common stock.

Forrester's credit facility was amended on March 12, 2026, extending the maturity date from December 2026 to March 12, 2029 ⁴⁶. The Revolving Credit Facility was reduced from $150.0 million ⁴⁷ to $50.0 million ⁴⁸, and the amount the company is permitted to increase commitments was reduced from $50.0 million ⁴⁹ to $15.0 million ⁵⁰. A minimum liquidity covenant was also added. The company expects to be in full compliance with these covenants through the next 12 months.

Forrester faces several material risks, including a decline in renewals or demand for its subscription-based research services, which comprised 75% ⁵¹ of total revenues in 2025, and a decrease in demand for its project-based, non-recurring consulting services, which made up 22% ⁵² of total revenues in 2025. The business is susceptible to adverse economic conditions, such as inflation, slowing growth, changes in interest rates, and the threat of recession, which could decrease technology spending and demand for products. International operations, accounting for approximately 23% ⁵³ of revenues, expose the company to risks including political and economic instability, regulatory changes, currency fluctuations, and difficulties in enforcing agreements in approximately 68 countries ⁵⁴. The company's future success depends on its ability to develop and offer new products and services, with the process of internal development or assimilation of acquired products being risky and costly. The use of generative AI, both internally and by competitors, poses risks such as factual errors, unintentional distribution of confidential information, ethical concerns, data privacy/security risks, and potential reduction in demand for Forrester's services if third parties use AI to compete or load proprietary research into large language models in violation of terms of use. The loss of key management, particularly George F. Colony, who owns approximately 39% ⁵⁵ of outstanding stock, could adversely affect the business. The ability to attract and retain qualified professional staff, including research professionals, consultants, and sales personnel, is critical, especially given recent workforce reductions of approximately 3% ⁵⁶ in February 2024, 6% ⁵⁷ in January 2025, and 8% ⁵⁸ in February 2026. Failure to anticipate and respond to rapidly changing technologies and market trends could impact market position. Business with the U.S. government is subject to contracting risks, including appropriation approvals and termination clauses. Outstanding debt of $35.0 million ⁵⁹ as of December 31, 2025, under a revolving credit facility, could restrict business and affect financial condition, with covenants that could lead to acceleration of amounts outstanding if not met. Competition from other independent research and advisory firms like Gartner, marketing agencies, consulting firms, and free online sources, including AI services, could lead to pricing pressure and loss of market share. Fluctuations in operating results can occur due to various factors, many beyond control. The company has recorded substantial goodwill impairment charges totaling $110.707 million ⁶⁰ in 2025, and future impairments could negatively impact financial results. Network disruptions or security breaches, despite a cybersecurity program, could damage reputation and harm business. Failure to enforce intellectual property rights, particularly in countries with weaker protections, is a risk. Compliance with evolving privacy laws (e.g., GDPR, CCPA) and new AI governance laws (e.g., EU AI Act) could incur substantial costs. Changes in tax law or income becoming taxable in higher-rate jurisdictions could adversely affect the effective tax rate. Any weakness in internal controls over financial reporting could materially affect the business or financial results.

Management's message to shareholders emphasizes the company's role as a global independent research and advisory firm, empowering leaders to accelerate growth through customer obsession. They highlight Forrester's unique research and guidance model, which helps executives achieve initiatives faster and with confidence. A key strategic priority is leveraging the complementary combination of trusted human intelligence and AI to address the increasing need for objective insights in a rapidly changing business and technology landscape. Management is focused on its "CV growth engine," aiming to expand contract value, which they view as their most significant business metric, to generate predictable and profitable revenue streams. Operational efficiency is also a priority, as evidenced by the workforce reductions implemented in January 2025 and February 2026, with the latter expected to incur total costs in a range of $10.0 million to $10.5 million ⁶¹ and contract termination costs of approximately $3.0 million ⁶². Furthermore, management is strategically realigning its consulting business by discontinuing strategy consulting engagements in 2026, anticipating a low 20 percent range ⁶³ decline in consulting revenues for the year.