Forrester Research, Inc.

Good afternoon, and thank you for standing by. Welcome to Forrester's first quarter 2025 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-Morris. 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 2025. If you need to copy, you can find one on our website in the investor section. Here with us today to discuss our results are George Colony, Forrest'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 involves 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 obligations 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 exclude 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.

Good afternoon, and welcome to Forrester's first quarter earnings call. I'll be joined today by Chris Finn, our Chief Financial Officer, who, following my remarks, will provide an update on our financial performance in the quarter. While the company has completed the transition to foreshore decisions, its challenges persisted in the first quarter, with decreases in both revenue and contract value. That said, the company showed healthy cash flow in the quarter, and earnings per share and operating margin exceeded consensus. The last mile of the Forrester Decisions transition is optimizing our go-to-market motion to match our product platform. The company's sales force continues to mature its processes and methodology to reach higher-level executives whom Forrester Decisions was designed to serve and expand the number of personas served within accounts. Sales activities and sales pipelines are increasing month-on-month, and I expect this trend to continue throughout the year, improving our performance as we progress through the quarters. Economic uncertainty emerged in the quarter, and we are planning for it to persist throughout the year. While the U.S. federal government makes up less than 6% of our contract value, we have had several contract cancellations associated with the Doge efforts in Washington. To date, these have been minimal, but we expect the renewals and new business in the government sector will remain tight throughout the year, given the administration's posture. Tariffs imposed by the U.S. government are driving hesitancy on the part of buyers, something that we encounter most predominantly in our Asian and European businesses in the first quarter. As with COVID five years ago, the lack of certainty is resulting in budget tightening, increased sourcing attention, and spending pauses, especially in the most impacted vertical markets, such as discrete manufacturing and retail. So how are we responding to these challenges? Late in the first quarter, we launched a new wave of research focused on helping companies manage through volatility. This stream covers a number of different personas and topics, including B2C and B2B marketing, technology, cybersecurity, and the workforce. The research doubles down our traditional focus on lowering risk, optimizing spending, simplifying technology stacks, attenuating cloud costs, sharpening contract negotiations, and prioritizing critical customers. Our volatility research has been the most read in our portfolio over the last four weeks, and it is the second highest topic in guidance sessions. In the governance sector, we are using the Doge disruption to unlock departments that were essentially no-bid, in other words, dominated by one supplier, finding new ways into these previously locked out accounts. As part of the government department reorganization plans, there has been a greater focus on AI and cybersecurity in the government, two areas of strength for Forrester. We will use these topic areas to penetrate more accounts in Washington. We continue to expand our research in artificial intelligence across all 14 of the Forrester decision services. In addition to our coverage of generative AI, we've expanded our research in the agentic AI space. And this is a technology that will vastly change the landscape of large corporate systems over the next five years. While technology vendors are moving quickly in the space, we are now working with many of our user clients as they develop their first significant applications using generative and agentic. Forrester's artificial intelligence quotient is being used by our clients to pinpoint gaps in their knowledge and expertise, which our research can fill. As I've talked about on previous calls, we are the only research company of scale that has built its own large language model to serve its clients, Izola. A key part of Forrester's value is providing buying assistance to our clients, who rely on our unbiased research to guide them to the best vendor for their applications and environment. Unsurprisingly, Finding vendors is the top use case for Izola. Nearly 40% of Izola prompts submitted by our technology client executives are questions about vendors or products in a specific market. Izola can surface these customized answers within seconds, improving the experience for our clients and streamlining our internal operations. We continue to expand Izola's capabilities with the LLM now incorporating our consumer and technographics data and our wave evaluative research. In the first quarter, we enabled clients to use Izola to converse with individual reports, making it quick and easy for our clients to access our frameworks and models. Given our broad coverage of AI in the deployment of Izola, we believe that we are now the leading AI research company. We continue to improve Forrester Decisions. We launched Expanded Access, which provides a wider breadth of content for Forrester Decisions clients. We've seen strong adoption among our clients. The majority of new FD bookings in Q1 were in this format. Forrester Decisions contains extensive data drawn for our business and consumer technographic studies. In the quarter, we launched a new interactive data tool that enables clients to query survey sets by vertical markets, demographics, and geography. So to conclude, while the start of the year did not meet our plan and economic instability has presented new challenges, we are pleased to be operating with one power platform, Forrester Decisions, which we believe can help our clients through these uncertain times. Thank you for being on the call, and I'd now like to pass it off to Chris Finn, Forrester's Chief Financial Officer. Chris?