Forrester (FORR) Q2 2026 Earnings Call Summary

1Key Financial Results and Metrics

Total Revenue: $100.2 million, down 10% year-over-year from $111.7 million.

Research Revenue: Decreased 8% year-over-year; research products down 7%, reprints down 12%.

Consulting Revenue: $20 million, down 15%, largely due to the exit from the strategy consulting business.

Events Revenue: $8.5 million, down 17% year-over-year.

Client Metrics:

Client retention at 77%, up 3 points year-over-year, down 1 point quarter-over-quarter.

Client count increased by 10 to 1,770.

Operating Income: $10.4 million (10.4% of revenue), down 24% from the previous year.

Net Income: $7.7 million, down 21%; EPS at $0.40, down 22%.

Cash Position: Over $130 million in cash, with $35 million in debt.

Free Cash Flow: Approximately $20.7 million for the first half of the year.

2Strategic Updates and Business Highlights

Continued focus on Contract Value (CV) growth, with a 3% decline in Q2 consistent with previous quarters.

Successful launch of the Forrester AI agent for Microsoft Copilot, enhancing client access to research.

Strong performance in the advisory business, which grew 21%, partially offsetting declines in other areas.

The B2B Summit North America saw a 9% increase in attendees, influencing approximately $3.5 million in contract value bookings.

New Total Experience (TX) score introduced, combining customer, brand, and employee experience metrics.

3Forward Guidance and Outlook

2026 Revenue Guidance: Expected to be between $350 million and $360 million, a decline of 9% to 12% from 2025.

Operating Margin Guidance: Expected to be in the range of 6% to 6.5%.

EPS Guidance: Projected between $0.72 and $0.82 for the full year.

Confidence in achieving CV growth by year-end, driven by product innovation and improved retention metrics.

4Bad News, Challenges, or Points of Concern

Overall Revenue Decline: 10% decrease in total revenue, reflecting market uncertainty and declines in consulting and events.

Client Retention: While improved year-over-year, client retention dipped quarter-over-quarter.

Consulting Business: Significant decline attributed to exiting the strategy consulting segment, which may impact future revenues.

Market Pressures: Ongoing challenges in the North American government segment and a need to adapt to changing client behaviors and preferences.

5Notable Q&A Insights

Visibility on CV Growth: Management expressed confidence in achieving CV growth by year-end, citing improved retention and a growing pipeline, particularly in tech and international markets.

Sales Strategy: Changes in the sales organization to focus on vertical industries and improved productivity were highlighted as key drivers for future growth.

Competitive Positioning: Forrester claims to be ahead of competitors in integrating AI into client workflows, particularly with Microsoft Teams and Copilot.

Focus on Retention: Management emphasized ongoing initiatives to improve client retention and enhance product offerings to better meet client needs. Overall, Forrester's Q2 2026 results reflect a challenging environment with notable declines in revenue and consulting, but management remains optimistic about future growth driven by AI adoption and strategic initiatives.