Forrester Research, Inc.

Good afternoon. Thank you for joining today's call. With me today is George Colony, FOSA's Chairman of the Board and CEO, Kelly Hipler, FOSA's Chief Sales Officer, and Scott Chenard, FOSA's Interim Chief Financial Officer and Treasurer. George will open the call. Kelly will follow George to discuss sales. Then Scott will discuss our financials. We'll then open the call to Q&A. Kerry Johnson, Forces Chief Research Officer will be joining the Q&A portion of the call. A replay of this call will be available until June the 5th, 2021 and can be accessed by dialing 855-859-2056 or 404-537-3406. Please reference the conference ID 5068724. 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, estimate, or similar expressions are intended to identify these forward-looking statements. These statements are based on the company's current plans and expectations and 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 reports and filings with the Securities and Exchange Commission. The company undertakes no obligations to update, publicize any forward-looking statements, whether as a result of new information future events or otherwise. I would now like to hand the call over to George Colony. You may begin.

Thank you very much for listening to Forrester's 2021 Q1 Investor Call. I will begin with an update on the quarter. Kelly Hippler, Head of Sales, will give a sales update, and Scott Chouinard, Forrester's Interim CFO, will then give a financial review for the quarter. Kerry Johnson, Forrester's Head of Research and Products, will join us, and then the four of us will take questions. I'd like to start by reflecting on the overall economy. We are entering a period of recovery in the U.S. with Europe lagging and the Asian markets slightly ahead of the U.S. Disruption from the pandemic continues in certain regions, with India being the most prominent example. It's clear that the pandemic has driven some important market changes. Consumer behavior has shifted permanently toward digital. The way we work has been reorganized around virtual and flex. and companies must now be all in on connecting to their customers via sophisticated technology. In this backdrop, the Forrester value proposition has never been more resonant. We will be on the side and by the side of our clients as they navigate the challenges of the post-pandemic economy. In the first quarter of 2021, we significantly beat our expectations for revenue, operating margin, and earnings per share. The momentum that began building in the third quarter of 2020 continued forward into Q1. While we are cautious, given that the pandemic is not over globally, we expect our momentum to carry through the year. We grew contract value bookings by 4% year over year. We have seen three quarters of sequential CV growth since the second quarter of 2020. And as a result of this strong performance, we will be raising guidance for the year, and Scott will go into that in more detail. As I mentioned on our last call, Forrester is laser focused on expanding contract value, the value of Forrester's annual recurring research revenue. We define CV products as services that our clients use periodically over a year's time and then renew on a yearly basis. In 2021, we are planning to grow CV bookings by double digit rates. The consistent expansion of contract value is attractive to investors as it results in predictable and profitable revenue streams. In past years, we have tracked syndicated revenue and agreement value for investors. These metrics are now being replaced by the more conventional and simpler CV. Now, how will CV growth improve the long-term prospects of Forrester and drive shareholder value? As CV grows, earnings and free cash flow will increase. We will invest this cash in three ways. Number one, expanding and improving the sales and marketing engine, two, enhancing and launching research products, and then three, acquiring other companies. A more powerful sales engine coupled with improved CV products and acquired contracts will enable Forrester to grow CV at faster rates, generating increased cash, which will then be reinvested continuing the cycle. Scott will share results of three key metrics that the company will be reporting on quarterly basis, CV growth, wall retention, and CV client retention. I want to turn to the performance of our three businesses, research, this is where most of our CV products reside, consulting, and events. And starting with research, readership in Q1 was up 6% year over year, and analyst inquiries increased 23%. As clients used Forrester to help build their post-crisis strategies, and execute on key digital initiatives. Our future of work research continues to resonate as we are guiding our clients back to offices and into flex work arrangements. One of the most read reports from late Q1 was the opportunity unknowns and the risks of vaccine passports in the workplace. We also deliver research to help clients update their IT stacks to become more adaptive, creative, and resilient. And we call this FutureFit. The post-pandemic drive to be digital is challenging legacy IT and control-focused CIOs. Our FutureFit research is helping companies sense change in their customers and markets and then update their technology quickly to meet these new demands. We grew CV bookings in our FeedbackNow startup venture. FeedbackNow enables companies to measure and improve customer experience in real time, and we have developed touchless smiley boxes for the post-pandemic world. FeedbackNow had a strong quarter powered by enrichment and multi-year renewals in the healthcare, transportation, and retail industries, as well as new clients like Nestle and a major European roadside management corporation. Consulting also exceeded expectations, with 21% growth year over year, in part driven by the sustained success of content marketing. Technology vendors continue to use this product to drive their marketing and sales leads in the absence of in-person events. Now turning to Forrester events. While we held no summits or forums in the first quarter, the team was preparing for our two largest events, which are being held in the second quarter. The company's largest venue, B2B Summit, convened this week in a live virtual format. And this is the second time that it has been delivered via a digital platform. Paid attendance at Summit was up 20% year over year. Our second largest event, CX North America, will be held in June. And sponsorships for both Summit and CX North America are sold out. Well, all of our events in the first half of the year will be held virtually, we are planning to move some of our events to in-person in the second half of the year, contingent on infection rates and the willingness of attendees to travel and gather. I would now like to turn to the launch of an important new product for Forrester. We decided early in 2020 that we would use the pandemic year to innovate and stay on the offensive. Approximately a year ago, we began to design a new research portfolio combining the best of Forrester with the best of Sears Decisions. We announced this new product, which we call Forrester Decisions, on Monday of this week with the ringing of the opening bell at NASDAQ. In hundreds of interviews, clients told us that they wanted to formulate strong visions of the future and then quickly translate those plans into implementation and outcomes. It is no longer possible for large companies to run multi-year strategy and change management projects. Customers are morphing too fast and competitors are too aggressive. So we've designed our new research portfolio to help companies shorten the time between technology vision and business execution. And very importantly, we are doing this in one research portfolio, not two. The world is no longer neatly divided into technology and business. Forced decisions helps companies merge these disciplines to win more customers and grow faster. Pacesetters like Amazon and Netflix see business as technology and technology as business. And that is how we're going to be leading our clients to move forward. The new portfolio will serve 15 executives, including CIOs, CMOs, chief sales officers, chief product officers, security and risk executives, and enterprise architects. All of these executives will receive all of Forrester's vision research. The intention is to help clients in technology and business build a shared vision of the future so they can move forward together in formation to win customers. The legacy Forrester and Serious Decisions research products will still be available. There's no hard cut over to Forrester Decisions. Now, that said, we do expect that most clients will be transitioned to the new product within 18 to 24 months. And Forrester decisions will be available in August, and I will update you with more details on the Q2 call in July. Turning to our balance sheet, we generated a record amount of cash from operations in Q1 and ended the quarter with over $125 million. The company is financially prepared for investments and acquisitions that will drive our CV growth. I wanted investors to know that we have upgraded our site to include details on Forrester's position on ESG, environment, social, and governance. And you can find the link at the bottom of the Forrester.com page under investor information. I'm going to conclude my remarks by thanking our employees and clients for the continued trust and dedication. I also want to let our colleagues in India and other countries that are battling the pandemic know that we will support them in any way that we can. And with that, I'll turn the call over to Kelly Hipler, Forrester's Chief Sales Officer. Kelly?

Thank you, George. Today, I want to spend a few minutes discussing two things. Number one, our pivot to contract value, and number two, our preparations for the Forrester decisions launch. Number one, pivot to contract value. The Forrester sales team has embraced our laser focus on driving contract value growth, Increasing contract value is centered on building long-term and deep partnerships with our clients. In Q1, we realigned all awards and recognition to celebrate those who overperform on their CV growth targets, including our prestigious Winner's Circle trip. I'm pleased to report that year-to-date, we are on pace with contract value bookings expectations. To drive contract value, we are taking a multi-pronged approach targeting client retention, wallet retention, and client acquisition efforts. I'll highlight a few examples of our Q1 wins. Client retention. We continue to see improvements in retention across geographies. For example, one systems integrator that we partner with in Southern Europe signed a three-year renewal totaling $1.25 million, a 100% CV relationship. Wallet retention. We closed an enrichment program with a major financial services company in the U.S. to provide research and analytics to support their home lending business for $227,000. Client acquisition. We saw strong performance across our new business teams in the quarter. One of our many new business initiatives is a coordinated win-back program to re-engage clients with Forrester who were lost during the pandemic and were already gaining traction. An example was a major U.S. retailer who signed a three-year, 100% CV contract totaling $384,000. Number two, our preparations for the Forrester Decisions launch. Our sales and customer success teams are excited about the launch of Forrester Decisions, our new premium product line. Our sales enablement team has built a robust training plan that launched in February to start preparing our teams. This new product will show the power of aligning the revenue engine across product, marketing, and sales. On a personal note, I'm very eager to be able to offer Forrester decisions to our clients. Forrester decisions will help us to deliver on our brand promise of being on our clients' sides and by their sides, in turn leading to double-digit contract value growth. And with that, I will turn the call over to Scott Chouinard.