Forrester Research, Inc.

Good afternoon. Thank you for joining today's call. With me today are George Colony, Forrester's Chairman of the Board and CEO, Kelly Hipler, Forrester's Chief Sales Officer, and Mike Doyle, Forrester's Chief Financial Officer. George will open the call, Kelly will follow George to discuss sales, and Mike Doyle will discuss our financials. We will then open the call for Q&A. A replay of this call will be available until November 28, 2020 and can be accessed by dialing 855-859-2056 or 404-537-3406. Please reference the conference ID 589-4106. Before we begin, I'd like to remind you that this call will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as expects, believes, anticipates, intends, plans, estimates, or similar expressions are intended to identify these forward-looking statements. These statements are based on the company's current plan and expectations involve risks and uncertainties that could cause future activities and results of operations to be materially different from those set forth in the forward-looking statements. Some of the important factors that could cause actual results to differ are discussed in our report and filings with the Securities and Exchange Commission. and company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. I'll now hand the call over to George Colony.

Thanks for being on our third quarter 2020 investor call. After I give an update on the quarter, Kelly Hipler, Forrester's Chief Sales Officer, will summarize sales results and progress. Mike Doyle, our CFO, will finish up with a financial review of Q3 and full year guidance, and then Kelly, Mike, and I will take questions. In Q3, we exceeded guidance for revenue and earnings per share, beating revenue by nearly $5 million and EPS by 12 cents. We are increasing revenue and EPS guidance for the full year. As I talked about on the Q2 call, the pandemic is increasing demand for research and advice. The challenges, change, and disruption of these times are driving client engagement in what I call a golden age of research. We are seeing increasing demand for our content on four levels. Number one, research that advises on how to navigate the pandemic. Two, research on structural changes in the workforce, in particular the future of work. Three, research on how to transition to digital, a development that has been accelerated by the pandemic. And then finally, number four, digital tools provided by Forrester that are used by our clients to drive their sales leads and client engagements. This business has accelerated with reprints growing 37% year-over-year in Q3 and content marketing increasing 31%. Year-to-date, we have seen research readership among active clients increase by 10%. Webinar attendance is up 44%. Analyst inquiries, these are the 30- to 60-minute client meetings conducted by analysts, are up 10% for the year. Forrester's resonance during these times is also being manifested in our events business. Our virtual events continue to draw large paying audiences, and we saw attendance accelerate in the third quarter. In 2020, we have held six events, including Serious Decision Summit, CX North America, and the Security and Risk Forum. Paid attendance at our virtual events topped 2019's physical events by 11%, and feedback scores continue to outpace scores for physical events. In the second and third quarters, there were nearly 170,000 views of streamed sessions. Feedback Now is Forrester's venture to enable companies to measure and improve experience in real time. Our technology is deployed in over 1,000 locations worldwide, gathering data from over 18,000 physical and digital endpoints. We are currently rolling out new touchless devices and digital people counters to help our clients improve their experiences during the pandemic. So to conclude on products, our certification business grew 24% year over year as companies continue to use these times to improve the skills of their teams in B2B marketing and also in customer experience. As Forrester moves into 2021, we are looking to grow our contract value products in particular, Forrester and Serious Decisions Research. To stimulate our CV sales pipeline for the year ahead, we create predictions and planning assumption documents, and I wanted to highlight a few here. In the buyer behavior space, we believe that social distancing will prompt consumers to experiment with immersive virtual experiences in the coming year. 12% of US online adults will experiment with augmented or virtual reality in 2021, Expanding overall AR VR exposure to nearly half the U.S. online population. In the marketing space, marketers will double down on retention and loyalty. 75% of B2B marketers will focus demand generation tactics on retention and enrichment in 2021, and that's up from 59% in 2020. B2C marketers will spend 30% more on loyalty and retention efforts, driving a 40% spike in email and mobile messaging. In the cybersecurity space, we're finding that pandemic-related uncertainty, remote working conditions, and employee errors are going to intersect to create the ideal conditions for social hacks. One third of security breaches in 2021 will be caused by insider threats. and then finally in the cloud space, we now predict that the global public cloud infrastructure market will grow 35% in 2021 to $120 billion and that Alibaba Cloud will take the number three revenue spot globally after AWS and Azure. The report projects that many large companies will shift select portions of the cloud traffic toward a new architecture, edge computing, to better serve local customers. and this trend is going to slow the growth of public cloud and usher in a new group of edge computing tech vendors. The full portfolio prediction and planning assumption documents will be online by year end. Turning now to Forrester's financial position, we continue to flow free cash with our cash position at quarter end at $73 million. Year to date, we have generated 29.2 million in cash and in 2020, we have reduced our debt obligation by $21 million. So to conclude, Forrester is navigating its way through the pandemic and recession. Our clients are challenged by macroeconomic conditions and 10% are highly challenged. Now that said, companies are turning to Forrester to widen their digital footprints, align sales, marketing and product, improve CX, improve employee experience, and Sharpen their customer obsession. So yes, these are demanding times, but they are stimulating a golden age of research as companies look for answers in a changing world. Forrester remains financially sound and we are using these times to develop new products that will position the company to accelerate as the pandemic and recession begin to clear. So I hope that you are all staying well and that your families are safe. and now I will pass the call over to Kelly Hipler, Forrester's Chief Sales Officer. Kelly?

Thank you, George. I'm pleased to share that the positive momentum we saw in June carried into Q3. We are both proud and appreciative of the hard work our Forrester team members across the globe have been doing to support our clients during these unprecedented times. In Q3, Booking's performance improved across all geographies and selling motions versus Q2. Most notably, both our core organization, which sells to high-tech clients and prospects below $1 billion in revenue, and our premier user teams in the United States rebounded strongly. As George mentioned, we are in the golden age of research. Clients need Forrester's insights now more than ever to help them navigate change, innovate, and grow. For example, in India, one of the region's hardest hit by the pandemic, we just signed a multi-year higher growth agreement with one of our clients for $1.6 million over two years. The pivots we put in place in April have helped us to steadily improve results despite the continued economic headwinds. These initiatives include, number one, shifting focus to strongest market opportunities. We stood up a cross-functional pipeline acceleration program to align resources across the Forrester ecosystem to where we were best positioned to drive value for our clients. This program included hot topics such as COVID-19 response and management, customer experience, digital experience, employee experience, and demand generation. We had a nearly $500,000 digital user experience project win with a $50 billion global commerce client. What started as an inquiry with a Forrester analyst evolved into a full digital user experience review of 22 sites in the United States and United Kingdom across seven personas. Our high-tech clients depend on Forrester to support content creation, and demand has increased as other traditional lead sources like in-person events are no longer available to them. One example, we partnered with one of our clients to create a demand program Leveraging Forrester's Total Economic Impact, or TEI, methodology valued at over $500,000. Two, move to all virtual events. Forrester's pivot to all virtual events has enabled us to deliver on our events calendar for 2020. Events play a central role in strengthening the overall relationship that clients have with Forrester. Our virtual events have given us the opportunity to stay connected with clients and showcase our thought leadership with positive results. Our events continue to accelerate pipeline building and help to secure renewals. Number three, conducted more sales training. In July and August, we held our annual H2 Strategy workshops. We leveraged these virtual workshops to share best practices on topics like social selling and the use of video in prospecting and client engagement. We also conducted additional training on our audience-centric buyer persona approach to enable us to capitalize on the efforts of marketing. And number four, we drank our own champagne. We continue to leverage our research and frameworks to improve alignment across our organization. This includes shifting our team to be digital sellers. Principal analyst Mary Shea had correctly predicted that 2020 would be the year of digital selling, and she said this before the pandemic hit. Now that we are all digital sellers, we're having more meaningful and authentic interactions with our clients and prospects who are literally inviting us into their homes. We are working with our team to make sure that we are well prepared, doing our homework, and are respectful of their time. As planning for 2021 continues, we are leveraging our serious decisions sales planning methodology and have built a bottoms-up sales capacity model. We have calculated our lifetime value and client acquisition costs to guide future investment decisions. We are focused on our core value proposition of helping business and technology leaders create customer-obsessed organizations that drive growth. Our own research shows that customer experience differentiation is the key to post-pandemic success and we will continue helping our clients to build strategies and execute programs to differentiate their brands based on customer experience. With that, I will turn the call over to Mike Doyle.