FORR — Forrester Research, Inc.

Forrester (FORR) Q2 2026 Earnings Call Summary

1. Key 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.

2. Strategic 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.

3. Forward 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.

4. Bad 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.

5. Notable 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.