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, Kerry Johnson, Forrester's Chief Research Officer, and Scott Chouinard, Forrester's Interim Chief Financial Officer and Treasurer. George will open up the call. Kerry will follow George to provide a product update. Then Scott will discuss our financials. We'll then open the call to Q&A. Kelly Hipler, Forrester's Chief Sales Officer, will be joining the Q&A portion of the call. A replay of this call will be available until August 28, 2021, and can be accessed by dialing 855-859-2056 or 404-537-3406. Please reference the conference ID 768-4089. 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 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. A company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. I will now hand the call over to George Colony.

Welcome to Forrester's 2021 Q2 Investor Call. I'm here with Terry Johnson, Forrester's Chief Research and Product Officer, and Scott Chouinard, Forrester's interim CFO. The three of us will give brief remarks. We will then be joined by Kelly Hipler, Forrester's chief sales officer, and the four of us will then take questions. The momentum of the last three quarters continued into Q2. Forrester's focus on growing contract value and its customer-obsessed content is producing strong financial performance. In the second quarter, contract value grew $26 million to $320 million, a 9% year-over-year growth rate. Revenue accelerated across research, consulting, and events. We have generated $70 million of cash in the first half of 2021, and that's more than the company has produced in any previous full year. We earned 66 cents in the quarter, beating the top end of guidance by 8 cents, and revenue grew 13% to $128.7 million, exceeding the top end of our guidance. Our client count, wallet retention, and client retention all showed strong growth as we continue to win back clients lost during the pandemic. As a result of our performance in Q2 in the first half of the year, we are raising guidance for the second time this year, and Scott will go into more detail in his financial update. Forrester is building an economic model which will drive shareholder value. In this model, we are, one, increasing contract value, which, two, generates more cash, which, three, we then invest in sales, product, and acquisitions. Improving our go-to-market structure and products will grow our contract value, repeating the cycle and driving the model forward. Now, several factors are contributing to the growth of CV. Client retention rates are increasing, moving up to 77% for the quarter. That's our third consecutive quarter of increase. Wallet retention moved to 96%, seven points over Q1 of this year. New business showed strong growth in the quarter. We now have 2,940 clients, and that's up 280 clients year over year. And finally, price increases set in January of this year are being realized. So CV growth is contributing to the strong cash generation in the first half of 2021. More CV equals more cash. We deployed some of that cash to increase training in our sales force in the second quarter. And it will fund the expansion of the sales force in the second half of the year, preparing the company for the 2022 plan. Additionally, we have increased investments in marketing, extending our demand waterfall advertising spend, and client experience programs. Our cache is also being deployed to improve our CV products and to launch new CV products. Forrester's research organization doubled down on producing content to help companies advance on their customer obsessed journey. And this is all the more important as the pandemic accelerated the demands of consumers. Key reports like the State of Customer Obsession help our clients understand their current state and provide best practices. We've also produced new frameworks, competitive benchmarks, and models to help leaders and their teams execute on their vision with a number of critical reports, such as the Trust Imperative, Don't Miss Your Anywhere Work Opportunity, and Hot Desks or Ice Cold Employee Experiences. At B2B Summit in May, we debuted our next generation B2B Revenue Waterfall, which helps firms accelerate opportunities and revenue in their sales pipelines. We are using our cash to launch Forrester decisions. As I explained on the Q1 call, this new portfolio of 15 research services will serve functional leaders and their teams. It brings the best of Forrester's vision and strategy research together with serious decisions, operational research. Now clients want one research source that can help them see the future and execute their strategy. And they want one source for understanding how technology and business are best combined and connected. We have spent more than a year working with our clients to design and build Forester decisions. It will become our flagship research product over the next two years as clients upgrade from the legacy Forester and serious decisions portfolios. This new product will enable us to push wider and deeper within our client accounts and become stickier. which will lead to higher wallet retention. There's a lot of excitement in the company and in our client base around the launch of this new CV product, and Terry Johnson will go into more details in a few moments. We are also investing in another CV business, FeedbackNow, our startup real-time customer experience measurement and operations solution. The five primary markets for this technology are retail, hospitality, infrastructure, mainly airports, headquarters, and healthcare. We are currently installed in 70 airports worldwide, including New York, Kennedy, and the airports of Paris, Geneva, Milan, and Rome. We are currently rolling out our cutting-edge touchless devices, and we are piloting FeedbackNow Factors, an open platform which combines real-time CX data with other data sources such as weather, traffic, flight delays, and foot traffic. FeedbackNow factors will deploy AI technology to enable clients to predict CX problems before they happen. The final use of cash is acquisitions. While I have no news to report today, I can say that the company remains aggressive and active on the M&A front with multiple targets on our radar. Acquisitions are focused in three areas, new contract value products as with FeedbackNow, improved geographical coverage as with springboard research in Asia, and the ability to serve more personas within large companies as with serious decisions. While our CV growth engine is accelerating, our non-CV businesses consulting events are also thriving. These businesses are critical to CV growth. Clients that consult with Forrester are 15% more likely to renew their CV contracts. And prospects that attend our events convert to become clients at 14% higher rates. Forrester's consulting organization posted an exceptional quarter with 22% growth year over year. We continue to see the global reach of our practice expanding with our international markets boasting their highest bookings quarter ever. Among the exciting new engagements are a five-year deal with a global services firm to conduct a longitudinal market study in China, and a contract with a European pharmaceutical firm to lead a full-scale CX transformation, including work streams across CX, marketing, and technology. In Q2, we saw continued strong demand for our content marketing programs, which drive lead generation for tech companies. This service has expanded rapidly during the pandemic as B2B technology providers have sought new marketing channels to replace events and face-to-face sales meetings. Turning now to our events business, we held three virtual events in Q2, B2B Summit North America, CX Asia Pacific, and CX North America. The B2B Summit and CX North America are the company's two largest events of the year. While our three events were virtual, both sponsorship and attendance grew across the entire event's portfolio. Growth in sponsorship is an important bellwether to the overall health of our events business. Sponsors are now more comfortable in the virtual setting, and they're prepared to spend marketing dollars to connect to prospects digitally. This is a good harbinger for our hybrid events in Q4 and also in 2022. B2B Summit revenue grew 32% year-over-year, and both sponsorship and attendance showed strong performance, with our audience growing by 40%. Now, before turning the call over to Kerry, I wanted to discuss our commitment to advancing our environmental social and governance goals. On the environmental front, we continue to manage our new office locations with recycled demolition materials and recycled build outs and furniture. While not all of our locations worldwide are LEED certified, we are managing to the highest standards attainable given the locations. We are also looking to operate with low impact. And as an example, our new anywhere work policies will take more commuters off the road and out of their CO2-producing vehicles. Socially, we continue to move forward, especially on the diversity and inclusion front. As a research company, it is essential that we tap into many viewpoints and backgrounds. The quality of our work depends on a broad and full view of society, business, sellers, and buyers. We recently completed a D&I assessment across our global offices to understand where we should focus our work. Over the next few years, our key priority areas to advance E&I include increasing representation across race, ethnicity, gender, sexual orientation, age, and ability, as well as engaging employees through inclusion training. We can and will do more on all of the ESG fronts. As mentioned during our Q1 call, we updated our website where you can find more detail on Forager's ESG work. I'll conclude my remarks by saying that this is a very exciting time at Forrester. Our CV growth engine is coming up to speed. Our financial performance is solid. We are increasing guidance for the year, and we are launching a new core research product that will bring unprecedented value to our clients. I am very proud of what the people of Forrester have accomplished over the last 18 months, despite the challenges of the pandemic. They remained focused on clients. They have stayed bold and on the offense. They've used technology to collaborate and create powerful teams, and they have innovated and stayed agile. This has truly been our finest hour. And with that, I'll turn the call over to Kerry Johnson, Forrester's Chief Research and Product Officer. Kerry.

Thank you, George. I'm excited today to share the incredible value that our new product portfolio, Forrester Decisions, will deliver to clients. and then how it will accelerate our ability to deliver double digit CV growth for Forrester. Forrester Decisions is designed for our customers and by our customers. Following the acquisition of Serious Decisions, we spoke with hundreds of Forrester and Serious clients. What we heard is that they wanted a simpler way of buying from and engaging with us as they chart their paths to customer obsession. As George mentioned, Our clients want one product that brings together the vision research of Forrester and the execution frameworks of Sirius, as well as the valuable elements of Forrester's other products, like analytics and certification. These conversations led to the creation of Forrester Decisions, an entirely new, unified product offering. Forrester Decisions is a portfolio of 15 standardized research services. tailored to the most critical priorities of senior leaders and their teams in technology, marketing, customer experience, sales, and product functions. With each Forrester Decision Service, customers get access to our bold vision research, curated tools and frameworks, and then extended time with our analysts to apply research to their context. The Forrester Decision Services are packed with new, bold calls on the future, frameworks and models to run functions, and also brand new benchmarking data. And we didn't stop there. We're also launching an entirely new digital platform for all of Forrester's customers that will transform their ability to get personalized insights and increased speed to value from us. No other research firm delivers this combination of vision, strategy, and execution together in this way. The product and the platform will save our clients time, money, and empower them and their teams to deliver results. We believe this will transform the dynamics of Forrester's CV business and propel our CV growth in three important ways. Number one, pipeline velocity. The Forrester Decisions product will be significantly easier to both buy and sell By tailoring each service to our key target audiences and their priorities, our sales teams can more quickly direct customers to the right product for them, resulting in higher conversion rates in less time. Number two, higher wallet retention. Forrester Decisions frameworks and tools make it a sticky research product. Our clients will run on Forrester, and it will be very difficult to unplug these services. The availability of 15 services gives our account teams a clear roadmap for cross-sell growth within existing accounts. And then number three, expansion of multi-year deals. The nature of the Forrester Decisions product and its value of Forrester being by the side of our clients to execute their most important priorities will result in longer-term client contracts. Priorities are not a single-year commitment or achievement. and the Forrester sales team will lead with multi-year deals to ensure that we are able to deliver meaningful outcomes for our clients and their organizations. Forrester is aligned across all of product, research, sales, technology, and marketing to deliver on Forrester decisions. We've created and are delivering Forrester decisions to the market with record levels of both speed and conviction. Our sales teams are excited to sell Forrester decisions, and they're already receiving very strong indicators of client interest. I'm grateful to the Forrester teams that have spent the last 18 months working tirelessly to create the future for Forrester, for our clients, and to set a new model for best in class in the research industry. And of course, to the customers that have lent their time to this effort as well. We have put customers and our brand promise to be by your side and on your side at the center of this product design and experience delivery, creating limitless opportunity for Forrester's growth and success. I'll now turn the call over to Scott.