FORR Q1 2025: Pipeline up 33%, Maintains $400-415M Guidance
- New government leadership and focused account targeting: Executives highlighted that a new leader in the government segment is already driving pipeline and reinforcing client relationships, which could help offset the minimal impact from government cancellations (less than 6% of overall business).
- Strong sales pipeline growth: The sales team reported a 33% increase in pipelines on a per AE basis year-over-year, suggesting enhanced sales performance and potential for accelerated revenue growth.
- Enhanced retention through multi-year contracts: The firm achieved an all-time high with 73% of contract value coming from multi-year deals, indicating stronger client retention and revenue stability.
- Government Contract Headwinds: Executives highlighted that government cancellations totaled around $2 million already, with an additional estimated risk of $1.5–$2 million in the back half of the year, indicating vulnerabilities in a key part of their revenue base.
- Extended Sales Cycles: The sales process is taking 10–12 days longer due to increased client scrutiny and added layers in approval processes, which could delay revenue recognition and impact growth momentum.
- Client Retention Challenges Among Smaller Clients: There is ongoing churn in smaller client segments, with non-retentions primarily attributed to a mismatch between the product sold and the client’s needs, suggesting potential long-term challenges in sustainably growing the client base.
| Metric | YoY Change | Reason |
|---|---|---|
Total Revenues | 10% decline (from $100.1M in Q1 2024 to $89.9M in Q1 2025) | Total revenues fell by $10.2M (10%) due to a combination of lower contract value, reduced client bookings, and economic volatility impacting all segments; this decline builds on prior period trends seen across research, consulting, and events. |
Research Revenues | 11% decline (from $76.6M in Q1 2024 to $68.4M in Q1 2025) | Research revenue dropped by $8.2M (11%) driven by a decline in contract value and the impact of the FeedbackNow divestiture, along with lower subscription research income—a continuation of the downtrend evident in previous periods. |
Consulting Revenues | 7% decline (from $23.1M in Q1 2024 to $21.4M in Q1 2025) | Consulting revenue decreased by approximately $1.7M (7%) owing to fewer client bookings and diminished service delivery, consistent with similar challenges noted in earlier periods. |
Events Revenues | 100% decline (from $0.4M in Q1 2024 to $0.0M in Q1 2025) | Events revenue dropped completely as no events were held in Q1 2025, amplifying the trend from previous quarters where events had already shown vulnerability to market conditions. |
North America Revenue | 9% decline (from $79.63M in Q1 2024 to $72.5M in Q1 2025) | North America revenues decreased by about $7.13M (9%) due to overall lower client demand and reduced sales activity in core markets, reflecting challenges that carried over from the previous period's broader revenue decline. |
Europe Revenue | 18% decline (from $13.44M in Q1 2024 to $11.03M in Q1 2025) | European revenues plunged by roughly $2.41M (18%) likely as a result of declining sponsorship activity and market pressures, trends that intensified the prior period’s weaknesses in the region. |
Asia Pacific Revenue | Stable (from $4.89M in Q1 2024 to $4.83M in Q1 2025) | Asia Pacific revenues remained almost flat with a minimal $0.06M drop, suggesting that despite overall declines, this region maintained stability relative to stronger declines elsewhere. |
Other Regions Revenue | 29% decline (from $2.12M in Q1 2024 to $1.51M in Q1 2025) | Other regions saw a near 29% decrease (about $0.61M), reflecting a loss of market share and more significant impacts from global economic headwinds compared to core regions, continuing an adverse trend observable in prior performance metrics. |
Net Income | Deterioration from a loss of $6.67M to a loss of $87.3M | Net income worsened dramatically by roughly $80.63M due primarily to a non-cash goodwill impairment charge of $83.9M, which was compounded by lower revenues and higher operating expenses—a considerable shift from the relatively lower losses in the previous period. |
Basic EPS | Worsening from a loss of $0.35 per share to a loss of $4.62 per share | Basic EPS declined sharply by over $4.27 per share as a result of the significant goodwill impairment underpinning the net loss, along with the revenue declines and cost pressures sustained from the prior period, highlighting the severe impact on shareholder earnings. |
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Guidance Conviction
Q: Why maintain guidance amid volatility?
A: Management remains confident in a $400–$415 million revenue range despite economic and tariff headwinds—citing conservative estimates, modest favorable currency effects, and limited government risks (around $2 million in cancellations) as reasons to hold the guidance steady. -
Revenue Visibility
Q: How robust is revenue visibility low end?
A: Leaders affirmed strong visibility on the subscription side with a balanced outlook across research, consulting, and events, reinforcing that their forecast base remains solid compared to the previous year. -
Sales Pipeline
Q: What's driving sales improvement?
A: Sales teams have increased per-AE pipeline by about 33%, leveraging new sales methodology and close alignment with analyst groups to boost client meetings and opportunity qualification. -
Sales Attrition
Q: How are headcount and attrition trends?
A: Headcount fell 11% year-over-year due to attrition and reduced backfilling, but management plans to resume targeted hiring in the second half, especially within government segments. -
Sales Cycle
Q: Why are sales cycles longer now?
A: Management noted initial deal closures now extend 10–12 days longer, attributing the delay to heightened internal and external scrutiny as clients adjust to new approval processes. -
Client Base
Q: Why decline in clients and when resume growth?
A: The drop is largely confined to smaller, single-seat clients—a mismatch in product fit—while larger accounts show better retention, with growth expected as clients transition to team-based solutions. -
Events Outlook
Q: Will Q2 events proceed successfully?
A: The company confirmed plans for two large events—one in London and another in Nashville—noting particularly strong audience interest in North America.
Research analysts covering FORRESTER RESEARCH.