Forrester Research, Inc.

Good afternoon, and thank you for standing by. Welcome to Forrester's fourth quarter and full year 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 fourth quarter and full year 2025. If you need a copy, you can find one on our website in the investor 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 Christophe Favre, 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 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 are 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.

Good afternoon and welcome to Forrester's Q4 2025 and full year earnings call. I'm joined by our Chief Financial Officer, Chris Finn, who will provide a detailed financial update after my remarks. I'll be covering the following key themes today. One, the progress we made in 2025. Two, our financial performance in Q4 and 2025. Three, our focus areas for 2026. As I look back at 2025, it is now clear that our clients are operating under a new paradigm shaped by AI. Large companies are confronted with complex buying decisions, disconnected CX journeys, and quickly changing customer behavior. At the same time, they're dealing with new technology challenges, how to implement and scale generative AI, how to ensure safe data usage with agentic AI, and how to maximize IT investments amidst a changing buying landscape. Complexity is growing. Forrester is uniquely positioned to help large companies navigate these problems. As I've talked about on recent investor calls, we have strongly pivoted over the last three years to align our research with the AI changes, to build AI technology for our clients, and to leverage AI technology to help us create research in new ways. Simply stated, we are guiding our clients to seize the AI opportunity to win, serve, and retain their customers, and to navigate the new risk landscape. True to our long-held positioning, we are researching at the intersection of business and technology, where the battle for customers in the age of AI will be waged. Last week, we saw disruption in equity markets as investors feared that AI would destroy the software industry. Will it? No. But it will spawn a new technology, what we call AI computing, that will rival and in some cases replace the old SaaS model. It is these types of market evolutions that Forrester was built to analyze and research. And the more disruption, the faster our business model will grow. And we are evolving that business model. Forrester has been actively embracing AI for three and a half years, and we have offered Izola, our generative model, to clients for two and a half years. We have two development teams devoted to building our AI capabilities, and we have years of experience working with the technology and testing and learning with our clients. In 2025, we launched a product based on AI, AI Access. In Q4, unique users of Forrester AI was up 55% year over year. The number of prompts was up 65% year over year. AI increases the value of our research, making it more accessible to clients and enabling them to create new and original content, like a board of directors deck, from Forrester's data and models. Having one research platform, Forrester Decisions, has given us an advantage. streamlining our AI efforts and optimizing our client experience. Companies want their executives to be using AI in their daily work, and this has increased the attractiveness of our AI products. Before I leave an overview of 2025, I wanted to reiterate the go-forward value of Forrester in the AI era. We have three capabilities that public large language models cannot deliver. One, proprietary data. Two, original ideas and analysis. And three, the ability of our clients to talk to the people that created the data and ideas, and how they can be applied to the specific environments of our clients. Floating over all of this is a big word, trust. When executives work with Forrester, they know they're turning to trusted sources backed by human experts. Turning now to our financial performance. While the future holds great promise for Forrester, we continue to work through challenges in Q4 and in the full year. In Q4, CV declined 6%, while revenue declined by 7% year-over-year. CV and revenue declines showed improvement compared with the previous quarter. Full-year revenue in 2025 declined by 8%, as our research business was impacted by the final leg of our migration to Forrester Decisions. Consulting and events revenue were down 9% and 29%, respectively. We are repositioning these businesses in 2026, as I will cover in a few moments. 2025 free cash flow was approximately $18 million, while retention reached 87% up a point from the start of 2025. Client retention was up three points in Q4 and up four points from the start of 2025, reflecting the positive impact of our new AI access product. Client count increased in Q4 as well, our first quarterly increase in this metric since Q4 of 2021. Our ability to offer a broader portfolio of products is helping drive up client count. Additionally, the percentage of CV and multi-year deals increased, with 72% of CV made up of multi-year deals at year-end, up from 69% in Q4 of 2024. Finally, our new AI Access product is generating new business and showing positive forward momentum. Released in September, AI Access had over $5 million in bookings for 2025 and will be a strong area of focus for us going forward. I would now like to turn to 2026. Our plan is to return to CV growth in the year as we focus on four initiatives. One, consistent execution of our retention lifecycle. Two, the introduction of more product options, including embedded Forrester AI. Three, a culture of growth within sales and improvements to our go-to-market execution. And finally, four, actionable all-seasons research and the production of more data. In 2024, we introduced the retention lifecycle, a standard process for periodically checking in with the economic buyer of our research to ensure that we're delivering value to our customers. In September, we hired Julie Merringer, a former Forrester executive, to run customer success at the company. She is bringing more accountability, discipline, and rigor to the lifecycle process. Our data shows a double-digit improvement in seedholder retention when we execute the steps in the lifecycle. The data is clear. Julie and team are leading consistent execution, which will reduce client churn and downsell. Our second initiative is on the product front. We will do two things. One, introduce more product options to fill out the portfolio, and two, expand the capabilities of Forrester AI. In 2026, we will be adding new versions of Forrester decisions built to enable teams of executives to work more closely together and complete corporate initiatives faster. And we will be expanding the capabilities of Forrester AI to enhance the conversational capabilities of the model and embed it within our clients' systems. As part of this effort, we are changing the name of our flagship AI tool, Izola, to Forrester AI. This evolution reflects Forrester AI's broad range and use cases as we expand beyond question and answer applications, including future integrations, into third-party workflows. Our third initiative is to continue to improve our go-to-market systems and talent. This will be led by our new Chief Sales Officer, Christoph Favre. Christoph has been at Forrester for over 14 years. Early in his Forrester career, Christophe managed our international business development team, the third-party reps who sell in countries where we do not have presence. In 2016, Christophe moved from Europe to Singapore, where he ran Forrester sales in Asia Pacific, including India. During his time there, he tripled the size of our business in that region. In 2021, he relocated to London, where he assumed management of all of Forrester's business in APAC and also in EMEA. Over the last three years, his sales regions have showed the best performance of the company and the highest net contract value increase. Christoph's plan is to create a culture of growth in sales and to sharpen sales execution. Christoph and I have spent a lot of time over the last decade selling to prospects and clients. I have high confidence in his ability to move our sales force back into growth. The fourth initiative of 2026 is to create research that is actionable, relevant in different business cycles, and yields more data. Our clients use Forrester's research to make decisions and to take action. Our new initiative, Blueprints, gives step-by-step guidance on how to tackle key efforts that span weeks, months, and quarters with reports, templates, tools, and guidance sessions plotting the best path. We will increase the volume of actionable research in 2026. The second effort is what we call Research for All Seasons. force your decisions is often used to make corporate transformations go faster and to improve their chances of success. Our challenge is ensuring that our research has increased value between transformations when companies are not in change mode. To this end, we'll be creating more content to help our clients improve their personal and professional effectiveness and to solve everyday problems that may be unconnected to broader projects. Finally, we will be investing in additional proprietary data. This will include adding new layers of B2B buyer insights and expanding the total experience index. On February 9th, we announced a restructuring affecting 8% of our employees. We made this move to align costs with revenue and to focus the company on expanding research contract value. As part of this effort, we are exiting the strategy consulting business. This business has been negatively affected by the ongoing instability of U.S. federal government contracts and an increasingly competitive market. Our consulting business will now consist of advisory work, our analysts doing day-long engagements with clients, and our content marketing business, the custom total economic impact and market impact reports that we produce for clients. We will continue to offer these three products as they have shown proven impact on driving and CVI. The ongoing instability of our events portfolio has prompted us to make significant changes in that business. We've heard from event attendees that travel budgets have tightened and leaders often don't have the time to commit to three- and four-day events. Accordingly, we're moving away from longer, multi-day events that require substantial travel for our clients, and we're shifting towards shorter, more intimate forums held closer to where our clients are based. In 2026, our new events format will include regional events in North America, EMEA, and APAC. Our new event format will prioritize more intimate, in-person connection and peer networking. So to summarize, we are planning to return to CV growth in 2026, driven by improvements to our retention lifecycle, our product portfolio, how we go to market, and our research. We are restructuring the business to more intensively focus it on growing research contract value, and we are increasing our investment in AI to ensure that our evolution to the AI research company continues apace. I will now turn the call over to Chris Finn, who will go into more detail about our financials. Chris.