Executive Summary

Q1 2024 revenue declined to $100.1M, down 12% year over year (consulting-driven), with adjusted EPS of $0.14; GAAP diluted loss per share was $(0.35) .
Management maintained full-year 2024 adjusted guidance (revenue $430–$450M; adjusted operating margin 9.5–10.5%; adjusted EPS $1.50–$1.70), though the GAAP tax rate was raised to ~50% and the GAAP EPS range was lowered versus prior guidance .
Contract Value (CV) fell to $323.1M (−4% YoY), with Forrester Decisions migration reaching ~70% of CV; wallet retention improved slightly to 88%, and Izola (gen-AI tool) rolled out to all Forrester Decisions clients .
The Board authorized a $25M increase to the share repurchase program, bringing remaining authorization to ~$89M; ~$4.1M of stock was repurchased in Q1 .
Key near-term catalysts: continued Forrester Decisions migration (target ~80% by year-end), Izola adoption, and stabilizing Research metrics offset by consulting headwinds; management expects CV to turn flat-to-slightly-up exiting 2024 .

What Went Well and What Went Wrong

What Went Well

Forrester Decisions migration progressed to ~70% of CV; CEO: “we now have 70% of CV on the Forrester Decisions platform” with stabilization in retention metrics .
Izola launched to all Forrester Decisions clients; early feedback “useful, objective and fast,” improving client engagement and opening sales doors .
Wallet retention improved slightly to 88% vs Q4, and Forrester Decisions retention (~82%) continued to run ~10 points better than legacy products; CFO highlighted uptick in new business in Q1 .

What Went Wrong

Consulting revenue fell 27% YoY to $23.1M; management cited persistent macro headwinds and curtailed discretionary project spend, making the revenue decline ~4 points worse than internal expectations .
Total revenue decreased 12% YoY to $100.1M, with Events down 65% given limited Q1 event cadence and legacy product declines .
GAAP loss widened to $(6.7)M (EPS $(0.35)), driven by lower consulting revenue and restructuring costs; adjusted operating income fell to $3.4M (3.4% margin) .

Financial Results

Metric	Q3 2023	Q4 2023	Q1 2024
Revenue ($USD Millions)	$113.431	$118.089	$100.077
GAAP Diluted EPS ($USD)	$0.13	$(0.03)	$(0.35)
Adjusted Diluted EPS ($USD)	$0.44	$0.25	$0.14
Adjusted Operating Margin %	10.8%	5.8%	3.4%
Adjusted Income from Operations ($USD Millions)	$12.260	$6.792	$3.420

Segment revenue breakdown:

Segment Revenue ($USD Millions)	Q3 2023	Q4 2023	Q1 2024
Research	$80.606	$85.185	$76.581
Consulting	$28.237	$28.271	$23.141
Events	$4.588	$4.633	$0.355

Key KPIs:

KPI	As of 9/30/2023	As of 12/31/2023	As of 3/31/2024
Contract Value ($USD Millions)	$349.400	$332.100	$323.100
Client Retention (%)	73%	73%	72%
Wallet Retention (%)	91%	87%	88%
Number of Clients	2,538	2,449	2,308
Total Headcount	1,750	1,744	1,690
Sales Force	599	601	604

Estimate comparison (consensus unavailable):

Metric	Q1 2024 Actual	Q1 2024 Consensus	Surprise
Revenue ($USD Millions)	$100.077	Unavailable via S&P Global	N/A
Adjusted Diluted EPS ($USD)	$0.14	Unavailable via S&P Global	N/A

Note: S&P Global Wall Street consensus data was unavailable at the time of this analysis (tool access limit). Management stated revenue decline was ~4 points worse than internal expectations due to consulting .

Guidance Changes

Metric	Period	Previous Guidance (Feb 8, 2024)	Current Guidance (Apr 30, 2024)	Change
Total Revenues (GAAP)	FY 2024	$430–$450M	$430–$450M	Maintained
Operating Margin (GAAP)	FY 2024	~2.4%–3.4%	~2.2%–3.4%	Lowered low end
Interest Expense (GAAP)	FY 2024	~$3.0M	~$3.0M	Maintained
Effective Tax Rate (GAAP)	FY 2024	~35%	~50%	Raised
Diluted EPS (GAAP)	FY 2024	~$0.33–$0.53	~$0.24–$0.44	Lowered
Adjusted Operating Margin	FY 2024	~9.5%–10.5%	~9.5%–10.5%	Maintained
Adjusted Effective Tax Rate	FY 2024	~29%	~29%	Maintained
Adjusted Diluted EPS	FY 2024	~$1.50–$1.70	~$1.50–$1.70	Maintained

Additional capital return: Repurchase authorization increased by $25M to ~$89M remaining .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2023)	Previous Mentions (Q4 2023)	Current Period (Q1 2024)	Trend
Generative AI / Izola	Izola beta with ~75–80 clients; strong feedback; gen-AI to revolutionize research; >4 internal AI projects	General release planned in Q1; ~100 analysts focused; 15–20% of research on gen-AI	Izola rolled out to all Forrester Decisions accounts; positive client feedback; sales differentiation	Improving adoption
Forrester Decisions migration	~57% CV on FD; target two-thirds by YE	Achieved 66% CV on FD by Jan 1; target ~80% by YE	~70% CV on FD; initiatives recorded for ~85% leader seats	Progressing
Sales motion / NCVI	Building high-performance sales; leadership hires; selling higher; government/user traction	C-suite focus; multi-year contracts; retention lifecycle; new methodology	Selling environment mixed; NA new business up significantly; pipeline growing; Europe/Asia stronger	Mixed but improving
Consulting headwinds	Non-CV businesses challenged; consulting down; stabilization modest	Consulting down 25% in Q4; continued challenges expected	Consulting down 27% YoY; revenue ~4 points worse than plan; headwinds to persist in 2024	Deteriorating
Events as CV driver	Events generate pipeline; hybrid model; strong session scores	Portfolio simplification; timing effects on revenue	Limited Q1 events; revenue down 65%; Q2 to host 4 events globally	Seasonal recovery expected
Macro / Tech recession	Persistent headwinds; buyers delaying decisions	Tech recession; small vendors churn; higher rates impact	Macro remains difficult (especially tech); clients adverse to project spend	Persistent

Management Commentary

CEO: “We are in the final year of our migration journey, and we now have 70% of CV on the Forrester Decisions platform… we saw stabilization in our key CV retention metrics, an uptick in new business, and the rollout of Izola… However, 2024 continues to be a challenging environment, with first-quarter revenue down 12%, largely driven by consulting headwinds.”
CFO: “The revenue decline in the first quarter was higher than expected… by approximately 4 points, largely driven by our advisory and consulting businesses… Operating income decreased… to $3.4 million or 3.4% of revenue.”
CEO: “Izola… available to all of our approximately 1,500 Forrester Decisions accounts… we are very proud to be the first major tech research firm to deploy a proprietary generative AI model for clients.”
CFO: “Guidance for 2024 remains unchanged… Revenue is still expected to be in the range of $430 million to $450 million… Adjusted EPS $1.50 to $1.70.”
Capital return: “The Board just approved a $25 million increase to the repurchase program, bringing the remaining authorization to $89 million.”

Q&A Highlights

Selling environment: Senior executive engagement improving; NA new business up significantly; Europe/Asia stronger than U.S. .
Izola impact: Strong client feedback; accelerates answers and deepens analyst conversations; gated to Forrester Decisions (migrates legacy clients) .
Migration dynamics: Expect ~80% CV on FD by year-end; of ~$50M legacy CV, ~half expected to migrate successfully, remainder lower-spend or non-renew .
Buybacks: Authorization increased; approach opportunistic given valuation; ~$4.1M repurchased in Q1 .
Pipeline and selling higher: CV pipeline growing; push to call higher; new methodology to increase influence and insight .

Estimates Context

S&P Global Wall Street consensus for Q1 2024 EPS and revenue was unavailable due to access limits at the time of analysis; management noted revenue was ~4 points below internal expectations due to consulting underperformance .
Given maintained FY24 adjusted guidance and persistent consulting headwinds, consensus may need to reflect weaker consulting trajectory near term while keeping adjusted margin/EPS ranges broadly intact per company guidance .

Key Takeaways for Investors

Revenue softness was consulting-driven; Research metrics stabilized (wallet retention 88%), supporting CV stabilization and a potential turn to growth exiting 2024 .
Forrester Decisions migration and Izola rollout are strategic positives likely to improve retention and upsell; FD retention ~10 points higher than legacy .
Guidance is effectively maintained on an adjusted basis; note GAAP taxonomy changes (higher GAAP tax rate to ~50%, lower GAAP EPS range) versus prior guidance .
Capital allocation: $25M increase to buyback authorization (total ~$89M remaining) and Q1 repurchases of ~$4.1M signal confidence and provide downside support .
Near-term trading lens: stock may react to consulting visibility and Q2 events cadence; watch for signs of sustained new business strength and pipeline conversion (management cited “significantly” stronger NA new business and growing pipeline) .
Medium-term thesis: As FD reaches ~80% of CV and Izola usage scales, expect improving retention/enrichment and mix shift toward subscription Research, supporting margin quality .
Monitor GAAP vs adjusted metrics: restructuring costs and amortization materially affect GAAP loss; adjusted metrics better reflect underlying operations as per company’s framework .

FORRESTER RESEARCH, INC. (FORR)·Q1 2024 Earnings Summary