Forrester Research, Inc. Q4 FY2025 earnings call

Key themes: 1. Progress in 2025: Forrester positioned to help large companies navigate AI - related challenges, pivoted over 3 years to align with AI changes, launched AI Access product in 2025, unique users of Forrester AI up 55% YOY in Q4, prompts up 65% YOY. 2. Financial performance in Q4 and 2025: Q4 CV declined 6%, revenue declined 7% YOY; full year revenue declined 8%, Research business impacted by migration to Forrester Decisions, Consulting and Events revenue down 9% and 29% respectively; 2025 free cash flow ~$18 million, retention 87%, client retention up in Q4, client count increased in Q4, percentage of CV and multiyear deals increased, AI Access had over $5 million in bookings in 2025. 3. Focus areas for 2026: 4 initiatives - consistent execution of retention life cycle, introduction of more product options including embedded Forrester AI, culture of growth within sales and go - to - market execution improvement, actionable all - seasons research and more data production; restructuring consulting business by exiting strategy consulting and focusing on advisory, content marketing; changing events business to shorter, more intimate forums; on Feb 9, 8% of employees restructured to align costs with revenue and focus on expanding research contract value.

Research segment: In Q4 2025, CV was $292.4 million, a 6% decline from Dec 2024; revenue was $76.6 million for the quarter and $295.6 million for the full year. Consulting segment: Revenue was $21.8 million in Q4 2025 and $88.2 million for the full year, representing declines of 16% and 9% respectively vs prior year. Events segment: Revenue was $2.7 million in Q4 2025, a 1% decline compared to Q4 2024; full year revenue declined 29% to $13.1 million.

2026 revenue expected to be $345 million to $360 million, down 9% to 13% vs 2025; revenue outlook driven by 2025 bookings decline, sunsetting strategy consulting product line negatively impacting revenue, reworking events business posing risk; research portion approaching 80% of total revenue; operating margins expected in range of 6% to 6.5%; interest expense expected to be $2.3 million; full year tax rate guided at 29%; earnings per share expected in range of $0.72 to $0.82.

Risks include ongoing instability of U.S. federal government contracts affecting strategy consulting business, increasingly competitive market for strategy consulting, travel budget tightening and time constraints of event attendees impacting events portfolio, which may lead to negative impact on revenue and business performance.

Q: On the consulting restructure, bucket different pieces of the business in terms of size exiting versus continuing and color on decisions and numbers?

A: Chris Finn said on sunsetting strategy consulting, revenue impact is ~$6 million, backlog of ~$8 million to be serviced in 2026, range of high 50s into low 60s for future.

Q: On contract value growth year - over - year down 6%, color on lower wallet retention, reasons for cancellation?

A: Christophe Favre said still see volatility and uncertainties in U.S. government and U.S. business user side, but see pockets of momentum in international markets and turnaround on high - tech side; George Colony said government still having impact.

Q: Elaborate on the product pipeline for the year?

A: Carrie Fanlo said product development includes upcoming product changes, looking to provide clients more ways to buy and be embedded in their work, AI Surge scheduled for first half of 2026.

Q: Other initiatives to improve revenue stream from events business?

A: Carrie Fanlo said 2 key areas - rebuilding sponsorship sales organization and new event strategy with smaller, more localized events closer to clients.

Q: Why ongoing disconnect between value of research versus LLM models and when may change?

A: Christophe Favre said Forrester AI solutions provide proprietary data, ideas supported by human experts, and see mistrust of content from some LLM; George Colony said 70% of revenue from models will be in private models in 10 years.

Q: With new sales leadership, change in sales process?

A: Christophe Favre said reorganize go - to - market strategy in North America around 6 industries, focus on high potential accounts, develop business development mindset, sharpen on retention life cycle, measure sales organization on both quantitative and qualitative elements.

Q: How did AI Access perform versus expectations in Q4 and trend in new year?

A: George Colony said was quite conservative in Q4, AI Access exceeded expectations, speed was surprising, Carrie Fanlo said very pleased with performance, strong pipeline in new year; Chris Finn said helped on deal cycle time, client count increase with AI Access and win - back campaign in first half.