Forrester Research, Inc.

Good afternoon, and thank you for standing by. Welcome to Forrester's second quarter 2024 conference call. At this time, all participants are on 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 second 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. Kerry Johnson, our Chief Product Officer, and Nate Swan, 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 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. Factors that could cause actual results to differ are discussed in our reports and filings with the Securities and Exchange 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, Ed. I'd like to welcome everyone to Forrester's second quarter 2024 investor call. I will cover the following four themes before turning the call over to Chris Finn for our financial update. Number one, Forrester's Q2 financial performance. Two, Forrester decisions and the enhancements we're making to the product. Three, our second quarter events. And four, changes in Forrester's management team and board. Turning first to second quarter performance. While total contract value, or CV, showed a decrease of 3%, we beat our CV bookings plan in the quarter, representing growth of 5% year over year. These results were driven by improved renewal rates of foreshore decisions, a greater than expected volume of cross-sell deals, and improving new business flow from both vendor and enterprise user clients. As a result, wallet retention increased by 1.289%. Despite positive movement in contract value bookings, Q2 revenue was down 10% year-over-year, primarily driven by underperformance in our events and consulting businesses. We continue to stay on track converting contract value over to Forrester decisions. In Q2, 73% of our CV was in Forrester decisions, up from 70% at the end of Q1. We remain on plan to hit our target of 80% of CV in foreshore decisions by year-end. As contracts convert, we are seeing an increase in the percentage of deals that are multi-year. 68% of FD contract value is now two or more years in length. These longer terms make sense for clients as their initiatives and transformation projects span a series of years. For Forrester, multi-year deals are beneficial as they renew at higher rates and give the company a more predictable flow of revenue. Our long-term goal is to move 80% of our FT research contracts to multi-year. We are becoming increasingly confident that our research CV business is stabilizing, and we expect to show modest net contract value increase, or NCVI, by year-end as we exit the Forrester decisions transition. I would now like to give you an update on our ongoing product enhancements. In Q2, we made our generative AI tool, Izola, available to all clients of Forrester Decisions. The Izola prompt is now the third most common action taken by clients behind selecting a report and conducting a traditional index search. The percentage of questions that Izola answers from a single prompt reached 91% in Q2, up from 86% in Q1. And here are a few client quotes. And this first one is from a VP of supply chain. There's so much research and assets and goodness from Forrester. Izola helps me carve through all of that to find exactly what I want. And here's a quote from a VP of customer experience. Before Izola was launched, I spent hours trying to remember where I had found a nugget of information in your research. Instead of having to go back and sum through research, I can now just type my question into Izola and the right research will pop right up for me. We continue to enhance Izola, adding question and answer history logging two weeks after the full launch. I believe that GenAI will make our research more accessible and useful for our clients. It is the most important change in our business since the web in 1991. Now, the company is not only leading in the use of AI, we are aggressively expanding our research coverage of the technology for our clients. In Q2, we published a comprehensive evaluation of large language models. The AI Foundation Wave breaks down LLM offerings, strategy, and market presence. across 21 criteria for 10 providers. This evaluation is the first of its kind from any major research firm, and it brings clients critical insight as they begin to build out their first Gen AI applications. Available for just two months, it is already in the top 15 most read foreshore reports year-to-date. Now, as investors know, Forrester Waves, which evaluate over 1,000 vendor offerings per year, are a central pillar of the Forrester Decisions value proposition. Technology purchases constitute significant long-term financial risk for large companies. The Wave de-risks those decisions. In Q2, the Wave was enhanced with a new interactive tool, enabling our clients to clearly see each Wave's evaluation criteria and scale explanations, and scores. Clients can customize wave findings based on their company priorities to easily compare vendors and create short lists based on their specific requirements. This new tool is driving platform use and bringing added value to our clients who rely on Forrester Waves for an assessment of the market. Reprints are an important ancillary business to research, and we built a new platform to administer and distribute this product. Our newly launched Reprints Hub will allow clients to easily manage their licenses within the core digital Forrester.com platform. Switching to our new in-house platform brings us operational efficiencies and cost savings, and it has enabled the creation of a new product, Flexible Reprints, which launched at the end of the second quarter. The continuous improvement of our contract value product is having an impact. Twice a year, we administer a client satisfaction survey, and in Q2, the results of that survey ticked up by three points, a significant swing. Improved products and increased customer satisfaction set the stage for higher renewal, enrichment, and new business rates, which will result in strong contract value growth. In Q2, we held our two largest events, B2B Summit in Austin and CX Summit in Nashville. Both events scored at high levels for content, value, and experience. Valuable case studies were presented from a number of companies, including Prudential, NetBank, and IHH Healthcare Singapore. While our content and value delivery excelled, we did not meet our sponsorship targets for either event, and this will have an impact on our full-year revenue. I'd like to end my remarks with some recent additions to the board and the leadership team. At our board meeting last week, I introduced two new members, Corey Munchback and Bob Bennett. Corey is the CEO of the customer data platform Blueconic. She is a former Forrester analyst who covered business and consumer tech trends and the MarTech landscape. Her expertise will help us in the B2B marketing space. Bob Bennett is a serial entrepreneur and inventor, most recently the CEO of payments company EngageSmart, which Bob founded and took public. Bob has been a relentless driver of annual recurring revenue in the software space and valuable to us as we look to drive CV growth. Both Corey and Bob will be excellent representatives for shareholders. Turning to the management team, we announced the appointment of Jobina Gonzalez as our new Chief People Officer in Q2. Jobina has more than 20 years of global HR experience across Asia, Europe, and North America. She is a great addition. And now I'd like to turn the call over to Chris for a full update on our financial performance. Chris.