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, and Chris Finn, Forrester's Chief Financial Officer. George will open the call, followed by a financial update from Chris. We'll then open the call to Q&A. Kelly Hipler, Chief Sales Officer, and Carrie Johnson, Chief Product Officer, will join us for the Q&A portion of the call. A replay of this call will be available until March 10, 2022, and can be accessed by dialing 855-859-2056 or 404-537-3406. Please reference the meeting conference ID 3619245. 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. The 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 Q4 2021 investor call. Q4 capped off a very good year for Forrester as we delivered our sixth consecutive quarter of contract value growth. For the full year, CV grew 15%, revenue increased 10%, earnings per share were up at 31%, operating margin rose to 13%, and the company generated record cash flow of $107 million. We continue to improve across key metrics. Client retention increased to 78%, wallet retention reached 102%, and client count moved over 3,000 companies. Against the backdrop of a continuing pandemic and challenging macroeconomic factors, Forrester took important steps forward in 2021, and we are well positioned to sustain double-digit CV growth in 2022 and beyond. Now, why is Fortune performing at these levels? Three factors. One, clients are looking for ideas, guidance, advice, and data in times of uncertainty. It is a golden age of research. Two, we have simplified our business and centered on one goal, expanding contract value at double-digit rates. And three, we have stayed on offense since the pandemic hit two years ago, aggressively developing Fortune decisions beginning in 2020 and bringing it to market in 2021. Starting with the Serious Decisions acquisition in 2019, we have transformed to grow at double-digit rates and generate higher volumes of cash. And in 2021, this enabled the company to appreciably increase shareholder value. Now, before diving into Q4 results, I'd like to give a quick review of 2021. Forrester Decisions, which we launched in August as our flagship research product, performed at better than planned levels. as legacy Forrester and Serious Decisions clients renewed into the new platform and it attracted new logos. As discussed on previous calls, Forrester Decisions combines the best of Forrester and Serious Decisions research in a unified portfolio of 15 different research services built around business and technology personas and their critical priorities. The product gives a unified vision of how technology and business operate in synergy, not as separate disciplines or activities, and this is a key advantage over competitive offerings. Forrester Decisions is a premium product that we consistently sell at full price. We've designed a thoughtful and methodical migration path for our clients, enabling them to transition at their own pace. And based on early results, we project that Forrester Decisions bookings will overtake legacy sales in the back half of 2022. Sales, marketing, and product all worked in close alignment in 2021 to launch Forrester Decisions. In the first half of 2021, we trained our sales force to sell the new product. Our sales enablement team orchestrated a rigorous agenda that ran from April through August with a modular building block approach capped off with certifications to test for full competency. In 2021, we significantly ramped up our investments in marketing to strengthen the Bold Network brand, increase our media presence, and build our demand marketing waterfall infrastructure to generate sales leads. We set up a dedicated customer experience organization within marketing to continually monitor and respond to client requirements. We evolved the research staff to support the 15 personas of Forrester Decisions. The teams coalesced around the specific priorities of each persona, creating the iconic service model that will define success for those executives. Importantly, the company's product management group continued to grow and mature in 2021 as it designed, developed, and delivered Forrester decisions. Product management under the leadership of Kerry Johnson has quickly become a critical asset for the company. ensuring that we have the right products at the right time with the right features for our clients. Our digital development capabilities continue to expand, and this group has added more than 60 new features to the Forrester Decisions platform since its launch. And these enhancements include upgraded search and improved personalization. Turning to Q4, I'd like to share a few recent sales highlights that demonstrate the value that business and technology leaders see in forester decisions to help them tackle their biggest priorities and unlock growth. In the quarter, we secured a $250,000 contract with a U.S. energy company, and this forester decisions deal included access to several service lines, including those targeted at technology executives, security and risk leaders, and technology, architecture, and delivery leaders. And in another win, a U.S. banking client renewed into a multi-year Fortune Decision solution for $475,000 annually. It was a very strong sales quarter as Fortune Decisions helped drive double-digit revenue growth for our research business. The new platform enables CB growth in three ways. One, by improving sales pipeline velocity with a product that is simple for our sales force to explain and easy for our clients and prospects to understand. Two, by improving our wallet retention, primarily enrichment, with a multi-service structure. And three, by expanding our ability to close out multi-year deals with clients. In the quarter, Forrester decisions continue to outperform the legacy research products in readership and engagement, with clients spending 12% more time on the site, viewing 59% more pages per session, and spending 31% more time engaging with research than legacy customers. Consulting capped off a strong 2021 with an excellent Q4. It exceeded plan and ended with 16% year-over-year bookings growth. All service lines performed well, led by our total economic impact business. And finally, events revenue grew 28% in Q4. I'm very proud of all we accomplished as a company in 2021. We will build on the year's momentum in 2022, working toward our long-term vision and strategy to be the dominant research company focused on helping business and technology leaders use customer obsession to accelerate growth. We will continue to build our CV growth engine, improving sales and product to generate CV and cash. Our five-year plan is to double contract value, and we are confident that the Forrester Decisions platform can get us to this goal. To continue to support CV growth, we are increasing our recruiting capability and hiring across the business with extra investments in analysts, sales, and international reach to achieve our growth plans. We will continue to build forester decisions in 2022, adding new benchmarking and certification capabilities, and by mid-year, we will add a 16th service. In 2022, we will strengthen the ability of consulting to drive our research business. Strategy consulting engagements will be tied directly to specific Forrester decisions priorities, which will provide clients with a full end-to-end solution. We are planning to offer hybrid events in 2022, an on-site experience running concurrently with a digital virtual experience. We believe that this model will give us the capability to leverage content across wider audiences and consequently expand our events business while increasing margins. We want to begin testing the concept this year so we can roll out a perfected experience in 2023. And based on our surveys of event attendees and in-person registration trends, we are seeing a strong appetite for in-person events across the Americas, Europe, and Asia. In-person will, of course, be dependent on local, state, and national regulations and infection rates. We have built scenarios for multiple contingencies. I want to finish up my remarks by talking about people, the most important Forrester asset, and to thank Forrester Rights for driving our historic performance in 2021. As a company, we focus on finding great people to join the company, developing them, and retaining talent. And this will be a major focus in 2022 as the business continues to grow. To this end, starting in the third quarter of 2021, we began to build up our talent acquisition team, and we are now running at an unprecedented hiring pace. Forrester adopted Anywhere Work in the fourth quarter, and this is helping our hiring efforts. We had expected to return to the office in a 2-3 footprint, two days required in the office and three days of flex. But after consulting our own research on the future of work and talking with the broad population of Forresterites, we decided that we will return in full flex. Forrester's research shows that employees are happier, more productive, and more creative when working in this model. And this is not just theory. Forrester has proven that it can run at high performance levels working from anywhere. And that's what we've been doing for the last two years. Retaining Forrester rights has always been critical for the business. We believe that the strong culture of the company, something we spend a lot of time working on, helps us keep the best and the brightest. I am very happy to announce that Forrester is once again on the Glassdoor 100 Best Places to Work in the U.S., I am also pleased to share the 164 Forest Rights celebrated milestone work anniversaries, 5, 10, 15, 20, and 25 years with us in 2021. Now, to drive attention, we have increased our promotion and merit raises in 2022, and we have moved our equity grant rounds from the third quarter to the first quarter. Finally, we continue to invest in new internal systems to make work easier and more efficient for our people. These systems include a new cloud-based HR system, digital selling and productivity tools, a new configure price quote system, a procurement management system, and a new publishing system in research. In the War for Talent, we think that we have the high ground, a healthy culture, a destination workplace, a business model that is performing, and work that is changing the direction and strategy of some of the largest organizations in the world. So to conclude, 2021 was an excellent start to Forrester's voyage of doubling contract value. Forrester decisions has been well-received. The Salesforce has pivoted to focus on CV growth. Consulting and events are reinforcing CV retention in new business. And perhaps most importantly, the company's culture has shifted to laser focus on CV growth. I am very proud of the people of Forrester as they have not only weathered the pandemic, but they have excelled in very uncertain times. Now, before I turn the call over to Chris Finn for a financial update, I want to say that Chris has been a very welcome addition to the Forrester executive team. He has helped us pinpoint areas of the business that can be improved. He has brought a welcome urgency, and some might call it constructive impatience. And his background in SaaS and annual recurring revenue models has been invaluable as we focus on CV growth. Over to you, Chris.

Thank you, George. And thanks again to everyone for joining us. I'll now review Forrester's financial performance for the fourth quarter and full year, along with our guidance for the first quarter and full year 2022. Please note that the income statement figures we review on this call are non-GAAP results, which we refer to as adjusted results. We have provided a reconciliation of our GAAP results to our adjusted results in our press release that we issued today. As George mentioned, we had historic 2021 results, headlined by our record CV growth of 15% for the year, double-digit revenue growth, along with significant improvement in all our client metrics. For the quarter, we also achieved double-digit revenue growth with research revenue growing 15% year-over-year and strong free cash flow generation. We delivered revenue, operating margin, and earnings per share that were in line with our expectations. We expect to sustain double-digit CV growth, and as our 2022 guidance highlights, we expect to achieve double-digit revenue growth for the full year ahead. Turning to the detailed results for the quarter, total revenues increased 11% compared to the fourth quarter of last year, driven by revenue growth of 15% in our research business. We continue to see strong demand for our research products, specifically within our new product portfolio, Forrester Decisions. Operating income was $17.8 million, up 61% year-over-year for the period. EPS was 59 cents, an increase of 69%, and free cash flow in a quarter was a robust $21.2 million. For the full year 2021, total revenue increased 10%, and operating income increased by 29% to $64.2 million, with operating margins increasing 190 basis points to 13%. EPS was $2.09, and we generated a record amount of operating cash flow for the year of approximately $107 million, which we have deployed with over $20 million of stock buybacks, as well as $34 million of debt payments, bringing our debt level down to $75 million at year end. We will continue to use our significant cash position to enhance EPS growth in 2022. Research revenues were up 15% compared to the fourth quarter of 2020 and grew 8% on a full year basis for 2021. Our CV growth was 15% compared to Q4 of 2020, and we have seen six straight quarters of sequential growth in CV. Similar to CV, we have also experienced six straight quarters of sequential growth in wallet retention, and client count has increased steadily from Q3 of last year. Our trailing 12-month client retention rate is up six points from Q4 of last year and is flat with prior quarter at 78%. Our wallet retention is up 16 points from Q4 of last year at 102%. The selling environment remains strong through Q4 as we maintained our laser focus, meeting clients' expectations and growing our CV business. The value of our newly launched platform, Forrester Decisions, continues to resonate with clients. They see value in the outcome-oriented approach and in a unified platform combined with using Forrester's services to help align multiple functions across their organization. Now, turning to our consulting business, for the full year, revenue grew by 14% compared to 2020. For the fourth quarter, consulting revenue growth slowed, increasing 1% compared to the prior year. as ongoing strong delivery by our consulting organization was partially offset by a decline in advisory services delivered by our analysts, who shifted a portion of their focus to delivering on a fast-growing CV business. In our events business, revenue increased 29% compared to the fourth quarter of 2020, due primarily to shifting two events into the fourth quarter. For the full year event, revenue grew by 27%. Currency rates did not have a material impact on revenue in the fourth quarter in comparison to the prior year, but did lift revenue by 1% for the full year. Operating expenses for the fourth quarter increased by 6% and for the full year grew by 8%, with the full year growth driven by increased professional services, higher bonuses, and sales commissions. Operating expenses as a percentage of revenue were down by 190 basis points year over year. Our ending headcount was down 1% as compared to the fourth quarter of 2020. Operating income increased by 61% to $17.8 million, or 13.3% of revenue in the current quarter, compared to $11.1 million, or 9.2% of revenue in the fourth quarter of 2020. For the full year, operating income was $64.2 million, or 13% of revenue, an increase of 190 basis points year over year. Interest expense for the quarter was $1 million as compared to $1.2 million in the fourth quarter of 2020 due to reduced debt levels. For the full year, interest expense was $4.2 million as compared to $5.3 million in 2020. Net income increased by 71%. and earnings per share increased by 69% compared to Q4 of last year, with net income coming in at $11.4 million and EPS at 59 cents for the current quarter, compared with net income of $6.6 million and earnings per share of 35 cents in the fourth quarter of 2020. Net income increased by 33% to $40.5 million, and EPS grew by 31% to $2.09 on a year-over-year basis, for 2021. Cash flow from operating activities was $22.1 million for the quarter and $107.1 million for the full year 2021. The $107 million of cash flow represents an increase of 224% from the prior year. CapEx was $0.9 million for the quarter and $10.7 million for full year 2021. And we ended the quarter with over $134 million of cash and investments on the balance sheet. From a capital structure standpoint, we refinanced our credit facility in the fourth quarter, which converted our term loan to a revolver and doubled our revolver capacity to $150 million, extended the term by approximately three years, and reduced our interest spread by 50 basis points. We also paid down $25 million of the revolver during the quarter, leaving us with just $75 million of outstanding debt. We repurchased over $20 million of our stock during 2021 and have $90 million remaining on our stock repurchase authorization at year-end. We intend to remain aggressive with our stock repurchase program in 2022. In summary, we had a great quarter and finish for 2021, with CV growth of 15% and research revenue growth of 15% for the quarter and overall revenue growth of 10% for the full year. We continue to experience momentum in our business since the second half of 2020 and feel confident that we have a great product in Forrester Decisions, a compelling go-to-market and engagement model, and a revenue engine that is aligned and functioning at a high level. all of which we expect to bolster momentum into 2022. There are still headwinds that we face with the pandemic and a challenging hiring environment. However, we feel confident in achieving our goals for 2022 and beyond. Now turning to our first quarter and full year 2022 outlook, let me provide some context on our guidance before I get into the numbers. We expect FX headwind to reduce revenue growth by approximately 1% with an insignificant effect on operating margins. For research services revenue, we are forecasting double-digit revenue growth for the full year and high single-digit to low double-digit growth in the first quarter, based on the strength of our CV growth in 2021 and our projected CV bookings for 2022. As we've discussed in prior calls, a portion of our research revenue is recognized as we deliver it. such as our reprint product and the advisory and event tickets that are included in certain of our research subscriptions. And this portion of our research revenue can be uneven during the year. For consulting revenue, as we saw in 2021, with revenue growth of double digits in the first three quarters of the year and low single digits in the fourth quarter, revenue growth can be lumpy during the year. We are projecting low single-digit revenue growth in the first quarter of 2022 and high single-digit to low double-digit growth for the full year, as we ramp capacity in this group to deliver on the strong backlog entering the year. For events revenue, our guidance includes a presumption that we will be able to hold hybrid events during the year, and this is highly dependent on local conditions in each of the jurisdictions where we hold events. Hybrid events include both in-person and digital experiences. Operationally, we are planning to hold our large hybrid events in the second quarter with smaller events in the third and fourth quarter. First quarter will not have any events. Thus, we expect event revenues to be higher than they were last year in 2021, but lower than 2019 pre-pandemic levels. As we move through the year, we will revisit the events revenue outlook based on changing macro environment conditions. For operating margin, as a reminder, we had raised our operating margin guidance by 200 basis points during 2021 and ultimately improved operating margins by 190 basis points year over year in 2021. And as I discussed on our last call, we're positioning the company for long-term growth and will continue investing in the business to sustain our momentum and scale across sales and marketing, product, and technology areas. There will also be cost challenges as we face an inflationary environment, along with cost increases due to having realized lower than planned spend in areas such as headcount, travel, and facilities during 2021. We are projecting an approximate 100 basis point decline in operating margins in 2022 due to our investments. However, we would expect to achieve operating margin expansion as we move into the back half of 2023 and beyond. And finally, with cashflow, as you know, we achieved a record amount of operating cashflow in 2021. And while we don't guide specifically on cashflow, we would expect cashflow to return to more historic levels as a percentage of adjusted earnings in 2022, primarily due to the increase in incentive compensation payments in 2022 and other working capital items. We have provided guidance on a GAAP basis and listed the items excluded from our adjusted guidance in our press release and 8K filed today. Our first quarter 2022 guidance on an adjusted basis is as follows. Revenues of $119 to $123 million, operating margin of 7% to 9%, an effective tax rate of 30%, and diluted earnings per share of 28 cents to 34 cents. Our full year 2022 guidance on an adjusted basis is as follows. Revenues of $550 to $560 million, operating margin of 11.5% to 12.5%, an effective tax rate of 30%, and diluted earnings per share of $2.25 to $2.35. I want to thank all of our employees for their efforts in achieving historic performance in 2021 for Forrester, and I look forward to working together to make 2022 just as successful. Thank you for joining us today, and I will now turn the call over to the operator for the Q&A portion of the call.

Thank you. As a reminder, to ask a question, you'll need to press star one on your telephone. To withdraw your question, press the pound key. Our first question comes from Andrew Nicholas with William Blair. Can you proceed with your question?

Hi, thank you. This is actually Trevor Romulan for Andrew. Appreciate you taking the questions. And, you know, congratulations on the nice CV growth results in the quarter. First, I kind of just wanted to start there with CV growth. Just wondering if you could kind of break down that CV growth between new logos, new seats per client, and pricing, or any other factors there? Seems like CV per client is growing at a pretty nice clip, I think 7% by our math. So just what's driving that uptick, and can that continue?

Hi, Trevor. It's Kelly Hippler. Thank you for the question. One of the great things about the results we had in 2021 is as we look across the levers that we have for growing our CV business, we have client acquisition, client retention, as well as upsell and cross-sell. And one of the pleasant things was we overachieved our expectations across the board. We had great new logo acquisition across our new business teams, both within the U.S. and across our international teams. But what's really driving the CV, as was alluded to by both George and And Chris was at impact to retention and share of wallet. And a lot of that was coming through the migration of clients to the Forrester Decisions portfolio. So we're continuing to manage to all four of those dimensions and have lots of opportunity across those as we go forward and execute our sales plan in 2022.

Okay, great. Thank you. And then I think Georgia mentioned sort of increasing recruiting and hiring capability in a pair of remarks. Just wondering kind of what level of headcount growth you're expecting in 2022. I know I think headcount had declined in 2021. So how challenging is it to find people right now? And how confident are you in hitting your desired level of growth?

Yeah. Hi, this is Chris. Thanks for the question. Look, we're confident based on some of the momentum that we have coming out of Q4 and We did see attrition in most areas of the business start to pull back a little bit, so we had some great success hiring and going into the year. You know, we're looking at approximately 15% to 17% growth overall for headcount on a net basis. And from a sales capacity standpoint, we're looking at double-digit growth.

Okay, great. Thank you very much. Appreciate all the call.

Thank you. Our next question comes from Vincent Colicchio with Barrington Research. You may proceed with your question.

Yeah, Chris, as far as your outlook for 2022, to what expense, to what extent, excuse me, Will increased wage costs impact margin?

Yeah, thanks, Vince. Good question.

From an inflationary standpoint, certainly, you know, we're seeing some impacts on the wage side. You know, we had to certainly, we've been making some significant investments in people. You know, our merit and promo, as George mentioned, is definitely increased. higher than our normal years that we've had in the past. But once again, it's a reflection of the war for talent. You know, it's probably, I'd say, you know, at least two or three points higher than what sort of our normal kind of run rate has been in the past.

Thank you. And then it was mentioned that 60 new features were added to Forrester Decisions since launch. That sounds like a lot. Is there a pipeline for new features to add, and how important have these new features been to gaining the momentum you have?

Hi, Vince. It's Carrie. I'm happy to answer that question. We set out to launch Forrester Decisions with the goal of having this product improve constantly for our customers and It is the platform product portfolio by which we're investing many of our resources. So features in this case include things like new certification courses and also upgrades to the site, which we're making constantly based on customer feedback. We have a very rich pipeline, as you can imagine, sort of based on that philosophy of improvements and enhancements coming that we roll out every few weeks, essentially, constantly improving the product for Forrester's customers.

Okay, and what does your current pipeline look like today for salespeople? This is for Kelly. And, you know, you say you're confident in terms of hiring new salespeople, but I'm just wondering what the pipeline looks like today.

Sure. Thank you, Vince. So as Chris mentioned, we are going to be adding low double digits to the sales force. We've had our largest hiring class in company history join us in January and expect to carry that forward as we get back into 2022 and also looking ahead for 2023. So we're finding some great talent out there, and I think some of the moves we've made with things like our Anywhere work are allowing us to cast a wider net when it comes to finding the best and brightest out there to help us introduce Forrester decisions to our clients and prospects.

Okay. Thanks for answering my question. Great quarter.

Thank you, Vince.

Thanks, Vince. Thank you. And as a reminder, to ask a question, you'll need to press star 1 on your telephone. Our next question comes from Andrea Sonderstone with Sudoti. You may proceed with your question.

Hi, and thank you for taking my questions. Congratulations on the great quarter and year. Just talking about the Salesforce, you added the largest class now in January. How fast do you think they will ramp, and have you made any changes to the training for your new hires that might accelerate their productivity?

Hi, Anya. It's Kelly, and thank you so much for the question. So one of the great things about the Forrester Decisions migration is that we feel very strongly that it will allow us to ramp new reps more quickly and It makes it really easy to discern when you're working with clients and prospects exactly who you need to be speaking with, what priorities we can help them with. So we have retooled our onboarding. We have also expanded our sales enablement team to help make sure that our new hires are getting the coaching that they need to rent more quickly than we've seen historically. And I think that coupled with the Forrester Decisions portfolio will help us to see some acceleration as we get into the back half of 2022.

Okay, thank you. And then also, given how much cash you are generating, you're paying down some debt, but what are your other capital allocation priorities?

I'd say that number one, Anya, is just investing back in the business. And, in fact, this is a big year of investments in people, in systems, in product, of course. That's number one. And then M&A, I'm not, you know, we are always, we always have targets. We are always working on that front. And I would say that, you know, it's three years after the serious decisions acquisition, so that's going to open up for us as the year goes on. Again, nothing to announce here, but definitely headed in that direction. And then finally buybacks. So those would be our three priorities. But number one, of course, back in the business, invest. because we are a growth business and there's a lot of opportunity to be won.

Okay, thank you. That was helpful to me.

Thanks, Anya. Thank you. And I'm not showing any further questions at this time. I would now like to turn the call back over to Chris Finn for any further remarks.

Well, thanks, everyone, for joining us today.

Appreciate you being on the call and the questions, and we look forward to joining you for our next call in Q1.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

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Good afternoon. Thank you for joining today's call. With me today are George Colony, Forrester's Chairman of the Board and CEO, and Chris Finn, Forrester's Chief Financial Officer. George will open the call, followed by a financial update from Chris. We'll then open the call to Q&A. Kelly Hipler, Chief Sales Officer, and Carrie Johnson, Chief Product Officer, will join us for the Q&A portion of the call. A replay of this call will be available until March 10, 2022, and can be accessed by dialing 855-859-2056 or 404-537-3406. Please reference the meeting conference ID 3619245. 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. The 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 Q4 2021 investor call. Q4 capped off a very good year for Forrester as we delivered our sixth consecutive quarter of contract value growth. For the full year, CV grew 15%, revenue increased 10%, earnings per share were up at 31%, operating margin rose to 13%, and the company generated record cash flow of $107 million. We continue to improve across key metrics. Client retention increased to 78%, wallet retention reached 102%, and client count moved over 3,000 companies. Against the backdrop of a continuing pandemic and challenging macroeconomic factors, Forrester took important steps forward in 2021, and we are well positioned to sustain double-digit CV growth in 2022 and beyond. Now, why is foreshore performing at these levels? Three factors. One, clients are looking for ideas, guidance, advice, and data in times of uncertainty. It is a golden age of research. Two, we have simplified our business and centered on one goal, expanding contract value at double-digit rates. And three, we have stayed on offense since the pandemic hit two years ago, aggressively developing foreshore decisions beginning in 2020 and bringing it to market in 2021. Starting with the serious decisions acquisition in 2019, we have transformed to grow at double-digit rates and generate higher volumes of cash. And in 2021, this enabled the company to appreciably increase shareholder value. Now, before diving into Q4 results, I'd like to give a quick review of 2021. Forester decisions, which we launched in August as our flagship research product, performed at better than planned levels. As legacy Forrester and Serious Decisions clients renewed into the new platform and it attracted new logos. As discussed on previous calls, Forrester Decisions combines the best of Forrester and Serious Decisions research in a unified portfolio of 15 different research services built around business and technology personas and their critical priorities. The product gives a unified vision of how technology and business operate in synergy, not as separate disciplines or activities, and this is a key advantage over competitive offerings. Forrester Decisions is a premium product that we consistently sell at full price. We have designed a thoughtful and methodical migration path for our clients, enabling them to transition at their own pace. And based on early results, we project that Forrester Decisions bookings will overtake legacy sales in the back half of 2022. Sales, marketing, and product all worked in close alignment in 2021 to launch Forrester Decisions. In the first half of 2021, we trained our sales force to sell the new product. Our sales enablement team orchestrated a rigorous agenda that ran from April through August with a modular building block approach capped off with certifications to test for full competency. In 2021, we significantly ramped up our investments in marketing to strengthen the Bold Network brand, increase our media presence, and build our demand marketing waterfall infrastructure to generate sales leads. We set up a dedicated customer experience organization within marketing to continually monitor and respond to client requirements. We evolved the research staff to support the 15 personas of Forrester Decisions. The teams coalesced around the specific priorities of each persona, creating the iconic service model that will define success for those executives. Importantly, the company's product management group continued to grow and mature in 2021 as it designed, developed, and delivered Forrester Decisions. Product management under the leadership of Kerry Johnson has quickly become a critical asset for the company, ensuring that we have the right products at the right time with the right features for our clients. Our digital development capabilities continue to expand, and this group has added more than 60 new features to the Forrester Decisions platform since its launch. And these enhancements include upgraded search and improved personalization. Turning to Q4, I'd like to share a few recent sales highlights that demonstrate the value that business and technology leaders see in forester decisions to help them tackle their biggest priorities and unlock growth. In the quarter, we secured a $250,000 contract with a U.S. energy company, and this forester decisions deal included access to several service lines, including those targeted at technology executives, security and risk leaders, and technology, architecture, and delivery leaders. And in another win, a U.S. banking client renewed into a multi-year Forrester Decisions solution for $475,000 annually. It was a very strong sales quarter as Forrester Decisions helped drive double-digit revenue growth for our research business. The new platform enables CB growth in three ways. One, by improving sales pipeline velocity with a product that is simple for our sales force to explain and easy for our clients and prospects to understand. Two, by improving our wallet retention, primarily enrichment, with a multi-service structure. And three, by expanding our ability to close out multi-year deals with clients. In the quarter, Forrester decisions continue to outperform the legacy research products in readership and engagement, with clients spending 12% more time on the site, viewing 59% more pages per session, and spending 31% more time engaging with research than legacy customers. Consulting capped off a strong 2021 with an excellent Q4. It exceeded plan and ended with 16% year-over-year bookings growth. All service lines performed well, led by our total economic impact business. And finally, events revenue grew 28% in Q4. I'm very proud of all we accomplished as a company in 2021. We will build on the year's momentum in 2022, working toward our long-term vision and strategy to be the dominant research company focused on helping business and technology leaders use customer obsession to accelerate growth. We will continue to build our CV growth engine, improving sales and product to generate CV and cash. Our five-year plan is to double contract value, and we are confident that the Forrester Decisions platform can get us to this goal. To continue to support CV growth, we are increasing our recruiting capability and hiring across the business with extra investments in analysts, sales, and international reach to achieve our growth plans. We will continue to build forester decisions in 2022, adding new benchmarking and certification capabilities, and by mid-year, we will add a 16th service. In 2022, we will strengthen the ability of consulting to drive our research business. Strategy consulting engagements will be tied directly to specific Forrester Decisions priorities, which will provide clients with a full end-to-end solution. We are planning to offer hybrid events in 2022, an on-site experience running concurrently with a digital virtual experience. We believe that this model will give us the capability to leverage content across wider audiences and consequently expand our events business while increasing margins. We want to begin testing the concept this year so we can roll out a perfected experience in 2023. And based on our surveys of event attendees and in-person registration trends, we are seeing a strong appetite for in-person events across the Americas, Europe, and Asia. In-person will, of course, be dependent on local, state, and national regulations and infection rates. We have built scenarios for multiple contingencies. I want to finish up my remarks by talking about people, the most important Forrester asset, and to thank Forrester Rights for driving our historic performance in 2021. As a company, we focus on finding great people to join the company, developing them, and retaining talent. And this will be a major focus in 2022 as the business continues to grow. To this end, starting in the third quarter of 2021, we began to build up our talent acquisition team, and we are now running at an unprecedented hiring pace. Forrester adopted Anywhere Work in the fourth quarter, and this is helping our hiring efforts. We had expected to return to the office in a 2-3 footprint, two days required in the office and three days of flex. But after consulting our own research on the future of work and talking with the broad population of Forresterites, we decided that we will return in full flex. Forrester's research shows that employees are happier, more productive, and more creative when working in this model. And this is not just theory. Forrester has proven that it can run at high performance levels working from anywhere. And that's what we've been doing for the last two years. Retaining Forresterites has always been critical for the business. We believe that the strong culture of the company, something we spend a lot of time working on, helps us keep the best and the brightest. I am very happy to announce that Forrester is once again on the Glassdoor 100 Best Places to Work in the U.S., I am also pleased to share the 164 Forest Rights celebrated milestone work anniversaries, 5, 10, 15, 20, and 25 years with us in 2021. Now, to drive attention, we have increased our promotion and merit raises in 2022, and we have moved our equity grant rounds from the third quarter to the first quarter. Finally, we continue to invest in new internal systems to make work easier and more efficient for our people. These systems include a new cloud-based HR system, digital selling and productivity tools, a new configure price quote system, a procurement management system, and a new publishing system in research. In the War for Talent, we think that we have the high ground, a healthy culture, a destination workplace, a business model that is performing, and work that is changing the direction and strategy of some of the largest organizations in the world. So to conclude, 2021 was an excellent start to Forrester's voyage of doubling contract value. Forrester decisions has been well-received. The Salesforce has pivoted to focus on CV growth. Consulting and events are reinforcing CV retention in new business. And perhaps most importantly, the company's culture has shifted to laser focus on CV growth. I am very proud of the people of Forrester as they have not only weathered the pandemic, but they have excelled in very uncertain times. Now, before I turn the call over to Chris Finn for a financial update, I want to say that Chris has been a very welcome addition to the Forrester executive team. He has helped us pinpoint areas of the business that can be improved. He has brought a welcome urgency and some might call it constructive impatience. And his background in SaaS and annual recurring revenue models has been invaluable as we focus on CV growth. Over to you, Chris.

Thank you, George. And thanks again to everyone for joining us. I'll now review Forrester's financial performance for the fourth quarter and full year, along with our guidance for the first quarter and full year 2022. Please note that the income statement figures we review on this call are non-GAAP results, which we refer to as adjusted results. We have provided a reconciliation of our GAAP results to our adjusted results in our press release that we issued today. As George mentioned, we had historic 2021 results, headlined by our record CV growth of 15% for the year, double-digit revenue growth, along with significant improvement in all our client metrics. For the quarter, we also achieved double-digit revenue growth with research revenue growing 15% year-over-year and strong free cash flow generation. We delivered revenue, operating margin, and earnings per share that were in line with our expectations. We expect to sustain double-digit CV growth, and as our 2022 guidance highlights, we expect to achieve double-digit revenue growth for the full year ahead. Turning to the detailed results for the quarter, total revenues increased 11% compared to the fourth quarter of last year, driven by revenue growth of 15% in our research business. We continue to see strong demand for our research products, specifically within our new product portfolio, Forrester Decisions. Operating income was $17.8 million, up 61% year-over-year for the period. EPS was 59 cents, an increase of 69%, and free cash flow in a quarter was a robust $21.2 million. For the full year 2021, total revenue increased 10%, and operating income increased by 29% to $64.2 million, with operating margins increasing 190 basis points to 13%. EPS was $2.09, and we generated a record amount of operating cash flow for the year of approximately $107 million, which we have deployed with over $20 million of stock buybacks, as well as $34 million of debt payments, bringing our debt level down to $75 million at year end. We will continue to use our significant cash position to enhance EPS growth in 2022. Research revenues were up 15% compared to the fourth quarter of 2020 and grew 8% on a full year basis for 2021. Our CV growth was 15% compared to Q4 of 2020 and we have seen six straight quarters of sequential growth in CV. Similar to CV, we have also experienced six straight quarters of sequential growth in wallet retention and client count has increased steadily from Q3 of last year. Our trailing 12-month client retention rate is up six points from Q4 of last year and is flat with prior quarter at 78%. Our wallet retention is up 16 points from Q4 of last year at 102%. The selling environment remains strong through Q4 as we maintained our laser focus, meeting clients' expectations and growing our CV business. The value of our newly launched platform, Forrester Decisions, continues to resonate with clients. They see value in the outcome-oriented approach and in a unified platform combined with using Forrester's services to help align multiple functions across their organization. Now, turning to our consulting business, for the full year, revenue grew by 14% compared to 2020. For the fourth quarter, consulting revenue growth slowed, increasing 1% compared to the prior year. as ongoing strong delivery by our consulting organization was partially offset by a decline in advisory services delivered by our analysts, who shifted a portion of their focus to delivering on a fast-growing CV business. In our events business, revenue increased 29% compared to the fourth quarter of 2020, due primarily to shifting two events into the fourth quarter. For the full year event, revenue grew by 27%. Currency rates did not have a material impact on revenue in the fourth quarter in comparison to the prior year, but did lift revenue by 1% for the full year. Operating expenses for the fourth quarter increased by 6% and for the full year grew by 8%, with the full year growth driven by increased professional services, higher bonuses, and sales commissions. Operating expenses as a percentage of revenue were down by 190 basis points year over year. Our ending headcount was down 1% as compared to the fourth quarter, of 2020. Operating income increased by 61% to $17.8 million, or 13.3% of revenue in the current quarter, compared to $11.1 million, or 9.2% of revenue in the fourth quarter of 2020. For the full year, operating income was $64.2 million, or 13% of revenue, an increase of 190 basis points year over year. Interest expense for the quarter was $1 million as compared to $1.2 million in the fourth quarter of 2020 due to reduced debt levels. For the full year, interest expense was $4.2 million as compared to $5.3 million in 2020. Net income increased by 71%. and earnings per share increased by 69% compared to Q4 of last year, with net income coming in at $11.4 million and EPS at 59 cents for the current quarter, compared with net income of $6.6 million and earnings per share of 35 cents in the fourth quarter of 2020. Net income increased by 33% to $40.5 million, and EPS grew by 31% to $2.09 on a year-over-year basis, for 2021. Cash flow from operating activities was $22.1 million for the quarter and $107.1 million for the full year 2021. The $107 million of cash flow represents an increase of 224% from the prior year. CapEx was $0.9 million for the quarter and $10.7 million for full year 2021, and we ended the quarter with over $134 million of cash and investments on the balance sheet. From a capital structure standpoint, we refinanced our credit facility in the fourth quarter, which converted our term loan to a revolver and doubled our revolver capacity to $150 million, extended the term by approximately three years, and reduced our interest spread by 50 basis points. We also paid down $25 million of the revolver during the quarter, leaving us with just $75 million of outstanding debt. We repurchased over $20 million of our stock during 2021 and have $90 million remaining on our stock repurchase authorization at year-end. We intend to remain aggressive with our stock repurchase program in 2022. In summary, we had a great quarter and finish for 2021 with CV growth of 15% and research revenue growth of 15% for the quarter and overall revenue growth of 10% for the full year. We continue to experience momentum in our business since the second half of 2020 and feel confident that we have a great product in Forrester Decisions, a compelling go-to-market and engagement model, and a revenue engine that is aligned and functioning at a high level. all of which we expect to bolster momentum into 2022. There are still headwinds that we face with the pandemic and a challenging hiring environment. However, we feel confident in achieving our goals for 2022 and beyond. Now turning to our first quarter and full year 2022 outlook, let me provide some context on our guidance before I get into the numbers. We expect FX headwind to reduce revenue growth by approximately 1% with an insignificant effect on operating margins. For research services revenue, we are forecasting double-digit revenue growth for the full year and high single-digit to low double-digit growth in the first quarter, based on the strength of our CV growth in 2021 and our projected CV bookings for 2022. As we've discussed in prior calls, a portion of our research revenue is recognized as we deliver it. such as our reprint product and the advisory and event tickets that are included in certain of our research subscriptions. And this portion of our research revenue can be uneven during the year. For consulting revenue, as we saw in 2021, with revenue growth of double digits in the first three quarters of the year and low single digits in the fourth quarter, revenue growth can be lumpy during the year. We are projecting low single-digit revenue growth in the first quarter of 2022 and high single-digit to low double-digit growth for the full year, as we ramp capacity in this group to deliver on the strong backlog entering the year. For events revenue, our guidance includes a presumption that we will be able to hold hybrid events during the year, and this is highly dependent on local conditions in each of the jurisdictions where we hold events. Hybrid events include both in-person and digital experiences. Operationally, we are planning to hold our large hybrid events in the second quarter with smaller events in the third and fourth quarter. First quarter will not have any events. Thus, we expect event revenues to be higher than they were last year in 2021, but lower than 2019 pre-pandemic levels. As we move through the year, we will revisit the events revenue outlook based on changing macro environment conditions. For operating margin, as a reminder, we had raised our operating margin guidance by 200 basis points during 2021 and ultimately improved operating margins by 190 basis points year over year in 2021. And as I discussed on our last call, we're positioning the company for long-term growth and will continue investing in the business to sustain our momentum and scale across sales and marketing, product, and technology areas. There will also be cost challenges as we face an inflationary environment, along with cost increases due to having realized lower-than-planned spend in areas such as headcount, travel, and facilities during 2021. We are projecting an approximate 100 basis point decline in operating margins in 2022 due to our investments. However, we would expect to achieve operating margin expansion as we move into the back half of 2023 and beyond. And finally, with cash flow, as you know, we achieved a record amount of operating cash flow in 2021. And while we don't guide specifically on cash flow, we would expect cash flow to return to more historic levels as a percentage of adjusted earnings in 2022, primarily due to the increase in incentive compensation payments in 2022 and other working capital items. We have provided guidance on a GAAP basis and listed the items excluded from our adjusted guidance in our press release and 8K filed today. Our first quarter 2022 guidance on an adjusted basis is as follows. Revenues of $119 to $123 million, operating margin of 7% to 9%, an effective tax rate of 30%, and diluted earnings per share of $0.28 to $0.34. Our full year 2022 guidance on an adjusted basis is as follows. Revenues of $550 to $560 million, operating margin of 11.5% to 12.5%, an effective tax rate of 30%, and diluted earnings per share of $2.25 to $2.35. I want to thank all of our employees for their efforts in achieving historic performance in 2021 for Forrester, and I look forward to working together to make 2022 just as successful. Thank you for joining us today, and I will now turn the call over to the operator for the Q&A portion of the call.

Thank you. As a reminder, to ask a question, you'll need to press star 1 on your telephone. To withdraw your question, press the pound key. Our first question comes from Andrew Nicholas with William Blair. You may proceed with your question.

Hi, thank you. This is actually Trevor Romulan for Andrew. I appreciate you taking the questions, and congratulations on the nice CV growth results in the quarter. First, I kind of just wanted to start there with CV growth. Just wondering if you could kind of break down that CV growth between new logos, new seats per client, and pricing, or any other factors there? Seems like CV per client is growing at a pretty nice clip, I think 7% by our math. So just what's driving that uptick, and can that continue?

Hi, Trevor. It's Kelly Hippler. Thank you for the question. One of the great things about the results we had in 2021 is as we look across the levers that we have for growing our CV business, we have client acquisition, client retention, as well as upsell and cross-sell. And one of the pleasant things was we overachieved our expectations across the board. We had great new logo acquisition across our new business teams both within the U.S. and across our international teams. But what's really driving the CV, as was alluded to by both George and And Chris was at impact to retention and share of wallet. And a lot of that was coming through the migration of clients to the Forrester Decisions portfolio. So we're continuing to manage to all four of those dimensions and have lots of opportunity across those as we go forward and execute our sales plan in 2022.

Okay, great. Thank you. And then I think Georgia mentioned sort of increasing recruiting and hiring capability in a pair of remarks. Just wondering kind of what level of headcount growth you're expecting in 2022. I know I think headcount had declined in 2021. So how challenging is it to find people right now? And how confident are you in hitting your desired level of growth?

Yeah. Hi, this is Chris. Thanks for the question. Look, we're confident based on some of the momentum that we have coming out of Q4. We did see attrition in most areas of the business start to pull back a little bit, so we had some great success hiring and going into the year. You know, we're looking at approximately 15% to 17% growth overall for headcount on a net basis. And from a sales capacity standpoint, we're looking at double-digit growth.

Okay, great. Thank you very much. Appreciate all the call.

Thank you. Our next question comes from Vincent Colicchio with Barrington Research. You may proceed with your question.

Yeah, Chris, as far as your outlook for 2022, to what expense, to what extent, excuse me, Will increased wage costs impact margin?

Yeah, thanks, Vince. Good question.

From an inflationary standpoint, certainly, you know, we're seeing some impacts on the wage side. You know, we had to certainly, we've been making some significant investments in people. You know, our merit and promo, as George mentioned, is definitely increased. higher than our normal years that we've had in the past. But once again, it's a reflection of the war for talent. You know, it's probably, I'd say, you know, at least two or three points higher than what sort of our normal kind of run rate has been in the past.

Thank you. And then it was mentioned that 60 new features were added to Forrester Decisions since launch. That sounds like a lot. Is there a pipeline for new features to add, and how important have these new features been to gaining the momentum you have?

Hi, Vince. It's Carrie. I'm happy to answer that question. We set out to launch Forrester Decisions with the goal of having this product improve constantly for our customers and It is the platform product portfolio by which we're investing many of our resources. So features in this case include things like new certification courses and also upgrades to the site, which we're making constantly based on customer feedback. We have a very rich pipeline, as you can imagine, sort of based on that philosophy of improvements and enhancements coming that we roll out every few weeks, essentially, constantly improving the product for Forrester's customers.

Okay, and what does your current pipeline look like today for salespeople? This is for Kelly. And, you know, you say you're confident in terms of hiring new salespeople, but I'm just wondering what the pipeline looks like today.

Sure. Thank you, Vince. So as Chris mentioned, we are going to be adding low double digits to the sales force. We've had our largest hiring class in company history join us in January and expect to carry that forward as we get back into 2022 and also looking ahead for 2023. So we're finding some great talent out there, and I think some of the moves we've made with things like our anywhere work are allowing us to cast a wider net when it comes to finding the best and brightest out there to help us introduce Forrester decisions to our clients and prospects.

Okay. Thanks for answering my question. Great quarter.

Thank you, Vince.

Thanks, Vince. Thank you. And as a reminder, to ask a question, you'll need to press star 1 on your telephone. Our next question comes from Andrea Sonderstone with Sudoti. You may proceed with your question.

Hi, and thank you for taking my questions, and congratulations on the great quarter and year. Just to talk about the Salesforce, you added the largest class now in January. How fast do you think they will ramp, and have you made any changes to the training for your new hires that might accelerate their productivity?

Hi, Anya. It's Kelly, and thank you so much for the question. So one of the great things about the Forrester Decisions migration is that we feel very strongly that it will allow us to ramp new reps more quickly and It makes it really easy to discern when you're working with clients and prospects exactly who you need to be speaking with, what priorities we can help them with. So we have retooled our onboarding. We have also expanded our sales enablement team to help make sure that our new hires are getting the coaching that they need to rent more quickly than we've seen historically. And I think that coupled with the Forrester Decisions portfolio will help us to see some acceleration as we get into the back half of 2022.

Okay, thank you. And then also, given how much cash you are generating, you're paying down some debt, but what are your other capital allocation priorities?

I'd say that number one, Anya, is just investing back in the business. And in fact, this is a big year of investments in people, in systems, in product, of course. That's number one. And then M&A, I'm not, you know, we are always, we always have targets. We are always working on that front. And I would say that, you know, it's three years after the serious decisions acquisition, so that's going to open up for us as the year goes on. Again, nothing to announce here, but definitely headed in that direction. And then finally buybacks. So those would be our three priorities. But number one, of course, back in the business, invest. because we are a growth business and there's a lot of opportunity to be won.

Okay, thank you. That was helpful to me.

Thanks, Anya. Thank you. And I'm not showing any further questions at this time. I would now like to turn the call back over to Chris Finn for any further remarks.

Well, thanks, everyone, for joining us today.

Appreciate you being on the call and the questions, and we look forward to joining you for our next call in Q1.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.