Forrester Research, Inc.

Good afternoon, and thank you for standing by. Welcome to Forrester's first quarter 2024 conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. Please be advised that today's conference is being recorded. I would now like to turn the conference over to Vice President of Corporate Development and Investor Relations, Ed Bryce-Mars. Please go ahead.

Thank you. And hello, everyone. Thanks for joining today's call. Earlier this afternoon, we issued our press release for the first quarter of 2024. If you need a copy, you can find one on our website in the Investors section. Here with us today to discuss our results are George Colony, Forrester's Chief Executive Officer and Chairman, and Chris Finn, Chief Financial Officer. Carrie Johnson, our Chief Product Officer, and Nate Swan, our Chief Sales Officer, are also here with us for the Q&A section of the call. Before we begin, I'd like to remind you that this call will contain forward-looking statements within the meanings of the Private Securities and Litigation Reform Act of 1995. Words such as expects, believes, anticipates, intends, plans, estimates, or similar expressions are intended to identify those 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 our forward-looking statements. Factors that could cause actual results to differ are discussed in our reports and filings with the Security and Exchanges Commission, and the company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise. Lastly, consistent with our previous calls, today we will be discussing our performance on an unadjusted basis which excludes items affecting comparability. While reporting on an unadjusted basis is not in accordance with GAAP, we believe that reporting numbers on this adjusted basis provides a meaningful comparison and an appropriate basis for our discussion. You can find a detailed list of items excluded from these adjusted results in our press release. And with that, I'll hand it over to George.

Thank you for joining Forrester's Q1 Earnings Call. With me today is Forrester's Chief Financial Officer, Chris Finn, who will provide a financial update following my remarks. We will then be joined by Kerry Johnson, our Chief Product Officer, and Nate Swan, our Chief Sales Officer, for the Q&A portion of the call. Today, I'd like to cover five key themes. Number one, our financial performance in Q1. Two, the Forrester decisions migration. Three, investments in generative AI. four, improvements to our sales process, and five, a preview of our Q2 events. In the first quarter, CV decreased 4% in alignment with our plan. Our key metrics have stabilized with wallet retention up slightly from the prior quarter at 88%, and Forrester Decisions client retention at 82%, flat compared to Q4. Overall, Forrester Decisions' client retention continues to outpace our legacy research products, with retention of the new platform running 10 points better than its predecessors. As we complete our migration, we anticipate retention to improve, creating a base for a return to contract value growth. And Chris will provide more detail on our metrics shortly. While our CV business is stabilizing, we've continued to see challenges in our consulting business. An effect that continues from 2023. The macroeconomic environment, especially within tech, remains difficult, with many companies still adverse to spending for projects. We plan to drive this business forward in Q2 and beyond with more focused sales and marketing efforts. We are in the final year of our transition to forester decisions, and I am pleased to report that our migration efforts remain on track. Since launching our new platform in August of 2021, we have moved 70% of our contract value and are poised to hit our goal of 80% of our CV on foreshore decisions at year end. We continue our evolution from a library model, one in which mid-level executives use research to build a reference center for answering one-off questions, to a new engagement model as a more strategic, continuous research and advisory partner. This model enables Forrester to focus research on client problems and needs, enabling them to accelerate transformations, better align their functions, and drive growth through customer obsession. Now, how do we do this? At the onset of a Forrester decisions relationship, we systematically collect the initiatives and outcomes of clients, the work that companies are engaged in, and the results that they're looking to achieve from that work. At the end of Q1, we had recorded initiatives for 85% of Forrester Decisions leader seats, up from 80% in the prior quarter. We think of initiatives and outcomes as the golden thread, guiding the relationship through time. And we believe that this will lead to stickier, multi-year engagements. Here's a quote from an IT client at a large multinational food processing company. When you introduced the Forrester Decisions model, it really resonated with me that we could think through an initiative end to end and plan a series of engagements that help progress that initiative. We could bring a business case forward, put a project around it, and then successfully deliver outcomes. Now it feels that with the Forrester Decisions model, you are partners in that endeavor. Forrester Decisions is helping us to expand our business with IT clients. Two research themes are currently resonating with CIOs and their staffs, generative AI and high-performance IT. Now, the world is in the first inning of generative AI, so much of our research continues to be focused on early applications and sorting through the widening field of technologies and models. Unlike previous emerging technologies, GenAI is going to touch all of our clients, whether they sell tires, insurance, software, or banking services. It is the topic most in demand by our clients, and over 50% of Forrester's analysts are directly engaged in Gen AI research. Unsurprisingly, it will be front and center at our two largest events of this quarter, B2B Summit and the CX Summit. Departing from traditional thinking, high-performance IT recognizes that there's no one-size-fits-all IT organizational structure. Counterintuitively, this stream of research shows that the best large companies are deploying several different styles of IT simultaneously, enabling them to respond to a multiplicity of diverse market conditions. This further complicates the lives of tech vendors who must gear up to create different solutions for different divisions of the same customer. In addition to the groundbreaking research of Forrester decisions, We recently made our generative AI tool Izola available to all of our approximately 1,500 Forrester Decisions accounts. Izola can rapidly synthesize our research, data, and insights, short-cutting clients straight to solutions. We are very proud to be the first major tech research firm to deploy a proprietary generative AI model for clients. Early Izola feedback has been quite positive. with customers describing it as useful, objective, and fast. An executive at a cloud-based software company put it simply, and I quote, it's absolutely critical for customers of research to have tools just like this. We are also using AI to increase productivity at Forrester. Employees are using Izola for knowledge discovery and topic alignment. We have also rolled out other predictive and generative AI point solutions to automate work in the company. One of these tools, Scout, was recently deployed with our customer success organization to quickly match client interactions with the appropriate analysts. I believe that expertise in generative AI is a critical asset for all companies, and I'm very proud of how quickly we have built that expertise at Forrester. We continue to advance toward a high-performance sales culture. Under the leadership of Nate Swan, the Forrester Salesforce is focused on net contract value increase, or NCVI, calling higher and larger organizations, operating using a standard process and methodology, selling more multi-year contracts, and a culture of continuous coaching and improvement. Forrester sales executives are focused on increasing their insight into client accounts, becoming more influential with our clients, all in the cause of building trust. This enhanced sales motion is matched to the on-your-side and by-your-side design of Forrester decisions, a continuous engagement that enables clients to achieve their outcomes faster. And the strategy is progressing. The North American New Business team, for example, is significantly outpacing its first-half performance from a year ago, Important large renewals and migrations of existing business occurred in Q1, including a $1.6 million research contract with a technology services client and a $500,000 forester decisions enrichment with a U.S. federal government agency. Before I turn the call over to Chris, I'd like to share a preview of our Q2 events. As we've stated before, events are a critical driver of contract value, bringing foresters' research to life for prospects and existing clients. In the second quarter, we will host four events globally, B2B Summit North America and CX Summit in the U.S., Europe, and Asia. At B2B Summit, we will recognize Verizon Business, DDI, and ADP as winners of our Return on Integration honors for delivering impactful customer experiences through the alignment of marketing, sales, and product. To complete my remarks, I want to reiterate my optimism about our long-term business. As I've said on previous calls, we are transitioning to a major new product in a time of general economic challenges and a retrenchment in the technology industry. These conditions have affected our financial performance, but we remain confident that we are making the right moves to set the company up for long-term health and CV growth. I will now turn the call over to Chris for our financial update. Chris.