Release Date: February 11, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Forrester Research Inc (NASDAQ:FORR) successfully completed the transition to Forrester Decisions, with 80% of contract value now in the FD portfolio.
• The company launched Izola, a generative AI tool, which has become the third highest destination for clients on the Forrester website.
• Retention improved by 2 points, and contract value per client increased by 10% from 2023 to 2024.
• Forrester Research Inc (NASDAQ:FORR) introduced a new reprints hub, offering operational efficiencies and cost savings.
• The company plans to invest in events to drive higher audiences and expanded experiences in 2025.

Negative Points

• Forrester Research Inc (NASDAQ:FORR) experienced a 9% revenue decline in Q4 and a 10% decline for the full year.
• The events business faced challenges, with a 42% decline in Q4 revenue compared to the previous year.
• Bookings attenuated late in the fourth quarter, resulting in a 5% decline in contract value for the full year.
• The company had to reduce its workforce by 6% to align expenses with expected revenue.
• Challenges were noted in the smaller high-tech field and government sector, impacting sales performance.

Q & A Highlights

• Warning! GuruFocus has detected 3 Warning Sign with FORR.

Q: Can you elaborate on the challenges faced in Q4 regarding bookings and sales execution? A: Nate Swan, Chief Sales Officer, explained that Q4 was challenging due to issues in the smaller high-tech field and government sector, partly due to budget constraints and unresolved government resolutions. The focus for 2025 is on execution, developing pipelines, and reaching senior-level executives without changing strategies.

Q: What is the outlook for contract value (CV) growth in 2025, and how does it relate to smaller tech companies? A: Nate Swan noted that exposure to smaller tech companies has decreased, and the focus is on transitioning away from sub-$50 million vendors. The expectation is for modest CV improvement in 2025, with a focus on larger corporate clients.

Q: How is Forrester leveraging AI, specifically Izola, for internal efficiencies and client engagement? A: Carrie Johnson, Chief Product Officer, stated that Izola is used for internal efficiencies, such as helping customer success teams find answers faster and automating analyst tasks. Informal research shows heavy users of Izola renew at higher rates, indicating its positive impact on client retention.

Q: What challenges were faced in India, and how is Forrester addressing them? A: Nate Swan mentioned that challenges with small vendors in India were more about execution in Q4 rather than a broader trend. The company is focusing on improving growth and retention in that market.

Q: How is Forrester working to engage larger customers and improve sales to the C-suite? A: Nate Swan highlighted the use of Forrester's agile selling technique and early renewal programs, which have shown success in engaging senior executives and expanding contracts. The focus is on understanding client initiatives and setting analysts up for success.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.