Forrester Research Q3 2025 Earnings Report

Forrester Research EPS Results

• Actual EPS: $0.37
• Consensus EPS: $0.31
• Beat/Miss: Beat by +$0.06
• One Year Ago EPS: N/A

Forrester Research Revenue Results

• Actual Revenue: $94.30 million
• Expected Revenue: $99.16 million
• Beat/Miss: Missed by -$4.86 million
• YoY Revenue Growth: N/A

Forrester Research Announcement Details

• Quarter: Q3 2025
• Date: 10/30/2025
• Time: After Market Closes
• Conference Call Date: Thursday, October 30, 2025
• Conference Call Time: 4:30PM ET

Forrester Research (NASDAQ:FORR) is a global research and advisory firm that helps business and technology leaders make decisions about customers, digital transformation, technology investments, marketing, sales and organizational strategy. The company provides independent research, data and analysis designed to help clients understand market trends, evaluate business and technology providers, and improve customer and employee experiences.

Its offerings include syndicated research reports, forecasts, benchmarks, analyst guidance, consulting services, executive peer networks and events. Forrester is also known for The Forrester Wave evaluations, which assess technology and service providers across defined criteria to help organizations compare potential vendors. Its research and advisory services are used by companies, government organizations and other institutions across multiple industries.

Founded in 1983 by George F. Colony, Forrester is headquartered in Cambridge, Massachusetts, and serves clients internationally, with research and advisory coverage spanning North America, Europe and other global markets. George Colony has served as the company's chairman and chief executive officer.

Forrester Research Q3 2025 Earnings Call Transcript

Key Takeaways

• Negative Sentiment: Total revenue fell 8% year‑over‑year in Q3, with research down 6% (4% ex‑FeedbackNow), consulting down 8% due to a U.S. federal government pullback, and events weak after a major event timing shift and sponsorship headwinds.
• Positive Sentiment: The company launched AI Access on September 9 and reports strong early demand, including a multi‑million dollar fast‑growing pipeline and one of Forrester's largest research deals that used enterprise‑wide AI Access pricing.
• Positive Sentiment: Management highlighted go‑to‑market improvements — faster rep hiring (55 days), broad adoption of the FAST sales methodology, and better conversion/time‑to‑close in emerging tech teams — which they expect to help Q4 bookings.
• Positive Sentiment: Disciplined cost control reduced operating expenses and headcount, driving a 21% increase in adjusted operating income and a 28% rise in EPS to $0.37 despite revenue declines.
• Negative Sentiment: Management modestly lowered full‑year guidance to $395–$405 million and now expects continued pressure in consulting (high single‑ to low double‑digit decline) and events (about a high‑20% decline), causing a slightly lower margin and EPS outlook.

Presentation

[Operator]

Good afternoon, and thank you for standing by. Welcome to Forrester's Third Quarter 2025 Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentations, 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.

[Ed Bryce Morris, VP of Corporate Development and Investor Relations at Forrester]

Thank you, and hello everyone. Thanks for joining today's call. Earlier this afternoon, we issued our press release for the third quarter 2025. 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. Carrie Johnson, our Chief Product Officer, and Nate Swan, 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.

[Ed Bryce Morris, VP of Corporate Development and Investor Relations at Forrester]

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 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'll be discussing our performance on an adjusted basis, which excludes items affecting comparability. While reporting on an adjusted basis is not in accordance with GAAP, we believe that reporting numbers on this adjusted basis provide a meaningful comparison and an appropriate basis for our discussion.

[Ed Bryce Morris, VP of Corporate Development and Investor Relations at Forrester]

You can find a detailed list of items excluded from these adjusted results in our press release. With that, I'll hand it over to George.

[George Colony, Chairman, President, and CEO at Forrester]

Good afternoon, and thank you for joining Forrester's 2025 Q3 Investor Call. Today, I'd like to cover the following topics: one, our Q3 performance; two, an update on our Go-To-Market Approach; three, the launch of the new AI Access product; four, the research business in the age of AI; and five, feedback from our Board of Clients. The macroeconomic environment continued to be challenging in Q3, highlighted by the rolling U.S. Federal Government pullback from Vonsulting. Q3 is historically the largest bookings quarter for our Government Consulting business. We were well below our target, and overall consulting revenue declined 8% from the prior year. In addition, research revenue declined 6% in the quarter, driven by bookings and challenges from previous quarters. Total Revenue declined 8% from the prior year. Wallet retention was up a point to 86%, and client retention held at 74% compared to Q2.

[George Colony, Chairman, President, and CEO at Forrester]

Chris will give more detail in the quarter in a few moments. In the Q1 and Q2 calls, I noted that the final step in the product transition is transforming our Sales Engine to consistently assign new Forrester Decisions clients and grow existing accounts. We made progress in the quarter on several fronts. One, average time to hire reps is running at 55 days, improving on our goal of 60 days, and there's very good sales talent available in the market. Two, the sales force continues to adopt the Forrester Agile Sales Technique, or FAST, sales methodology. We ended the quarter with the highest percentage of reps certified and with all managers now qualified to run FAST deal clinics. Three, our demand marketing engine continues to improve, driven by stronger alignment between our Sales and Marketing teams.

[George Colony, Chairman, President, and CEO at Forrester]

The result has been increased prospect follow-up and a higher rate of opportunity creation for marketing efforts. Areas where we are focused in Q4 are: one, maintaining consistent sales activities; two, improving execution of our retention lifecycle; and three, maintaining a rolling pipe of $550,000 per quarter bearing headcount. Moving now to product changes. We announced AI Access, a self-service AI offering, on September 9th. As you know, Izola, our generative AI model, launched over two years ago. Clients use Izola on the Forrester Decisions platform as an alternative to search, enabling them to quickly get answers and to create custom content from Forrester's proprietary model. Izola has become one of the primary ways that clients use our Research. For clarity's sake, Izola is a model built by Forrester that yields answers based on Forrester's Research.

[George Colony, Chairman, President, and CEO at Forrester]

This content is not available in any other generative model, including the public LLMs such as Claude from Anthropic, ChatGPT from OpenAI, and Gemini from Google. Unlike the public models, Forrester's private model is based on tens of thousands of Forrester Research artifacts, which include exclusive frameworks, ideas, data, product evaluations, best practices, and benchmarks. The Forrester model yields answers that are proprietary and trusted. Where does AI Access fit in our Product Portfolio? The current Forrester Decisions Portfolio includes three levels of Research Access: VIP, which is research plus a dedicated advisor; Leaders' Seat, which is research plus the ability to have unlimited guidance sessions with analysts; and Team Seats, which offer research plus the ability to attend leaders' guidance and inquiry sessions.

[George Colony, Chairman, President, and CEO at Forrester]

Clients have told us that in addition to VIP, Leader, and Team users, they want more executives using Forrester's research without access to advisors, customer success, or analysts. These executives are often part of the VIP or leaders' teams, but they don't yet need continuous guidance. AI Access provides an entry level for executives within our client companies to use our research, accessing Forrester through an AI prompt and Izola homepage. We introduced the product for three reasons. One, to attract new clients. AI Access will widen our client base and enable more executives to use Forrester. Two, enrichment. AI Access provides streamlined self-service and a fast, trusted way for clients to get answers. Three, win-backs. We will use AI Access to reintroduce former clients to Forrester Decisions.

[George Colony, Chairman, President, and CEO at Forrester]

With the advent of AI Access, we have widened the Forrester Decisions portfolio, enabling us to land and expand with a wider group of executives and helping them align their initiatives and thinking. We are democratizing access to our Research, making it easier for larger teams to get the answers they need to make collective decisions. AI Access is our entry-level research product. Volume pricing is available based on the number of seats acquired. Since the mid-September launch, we have seen significant interest with a multi-million dollar fast-growing sales pipeline. In Q3, we secured one of the largest research deals in Forrester's history with a large government agency that is modernizing their organization and is pushing toward fully AI-enabled decision-making. Our ability to offer this client an enterprise-wide pricing model via AI Access was a key differentiator, enabling thousands of users to gain access to our research in that account.

[George Colony, Chairman, President, and CEO at Forrester]

We are off to a great start with AI Access and believe that the product will quickly become an important part of the Forrester Decisions Portfolio. Now, before I leave the topic of AI, I want to say a few words about Forrester's place in the AI future. I know that there have been many questions about the value of research in a world in which public Large Language Models are becoming more adept at answering questions. In that future, what will Forrester's role be? Generative AI is good at enabling people to converse with broad data sets. In the case of the public language models like ChatGPT, that data set is built from what is called the Common Crawl, publicly available information scraped from websites. As you know, that information does not include private data from sources like Bloomberg, Dun & Bradstreet, FactSet, or Forrester.

[George Colony, Chairman, President, and CEO at Forrester]

Of course, the public models do not include information like your bank account. To converse with that data in the future, you'll have to go to a private AI model built by Bank of America or Barclays as examples. Public AI will never be able to construct trusted data from thin air, just as it will not be able to conjure your bank balances without access to your bank. In the Age of AI, Forrester will be akin to a Private Research Bank. Creating and curating four proprietary assets: one, data. We will construct protected data sets and analyze them against longitudinal studies that the company has built over the last three decades. Two, original ideas and frameworks like our Zero Trust security model. Three, complex analysis that combines ideas and data. An example would be our Total Experience Score that marries Customer Experience Data with Brand Data.

[George Colony, Chairman, President, and CEO at Forrester]

Four, Proprietary Information that forms the basis of the Client-Forrester relationship. Client priorities and initiatives would be an example. Forrester will leverage AI, as we do with Izola, to help our clients use these assets. This information will not be available in public models. Also, while we believe that the future will be driven by AI, there will continue to be HI, human intelligence, driving knowledge and thought in society. This is not a "Robot Moment" when the androids arrive to take all of our jobs. It is rather an "Iron Man Moment" when humans will put on suits of Generative and Agentic AI and become more powerful for their customers. Yes, there's a lot of AI at work, but inside the suit is still a human being that is able to channel AI to deliver the highest value.

[George Colony, Chairman, President, and CEO at Forrester]

That's exactly what Forrester Research is doing with Izola and AI Access, using AI to become more powerful and more useful to its clients and to the world, while also offering access to the analysts that created the research in our model. The word hovering over any discussion of AI is the word Trust. When executives are making important business and public policy decisions, they must trust the information that trained the AI model, and that the model yields accurate answers backed by trusted data and trusted people. Forrester Research serves executives at some of the world's largest companies and government agencies. These clients are making decisions that will have long-term impact on the futures of their organizations. Yes, they will use AI to make those decisions, but they will rely on Trusted AI, and that is what Forrester Research provides.

[George Colony, Chairman, President, and CEO at Forrester]

Forrester executive team met with the company's Board of Clients in September. For many years, this board has advised us on strategy, product, and research direction. The members are trusted advisors to Forrester Research, and Forrester Research is a trusted advisor to their companies. The board is comprised of client executives who serve for three years. Current companies represented include Air France, AG Insurance, Ameritas, IBM, Nationwide, Travelers, and SAP Concur. I'm not going to go through a full summary of the board meeting, but I wanted to give you a few quotes from the members when we asked them, "Why do you use Forrester Research?" Here are a few responses that I thought were illustrative of our value to clients. You challenged my thinking and helped me define a new strategy. I use you for two things: knowledge of technical intricacies and bold advice.

[George Colony, Chairman, President, and CEO at Forrester]

You give me backup and justification to move forward on projects. I love the benchmarks and associated future data mapping strategies, it helps me develop. You're in it with us, setting us up for success, helping us pressure test solutions, breaking down our company silos. And the final quote, "I don't make a major decision without checking in with Forrester. It's a privilege to work with you." The Board of Clients was very supportive of the launch of AI Access, and much of the meeting was devoted to board members guiding us on pricing, positioning, and packaging of the new product. To conclude, we continue to work through the economic moment by, one, staying focused on improving our Go-To-Market motion, two, improving the Forrester Decisions platform, and three, carefully controlling expenses. We are very excited to be introducing AI Access.

[George Colony, Chairman, President, and CEO at Forrester]

We look forward to using AI to democratize access to our research and to further establish Forrester as the AI research company. Thank you for listening to the call, and I'd now like to hand it over to Chris. Chris?

[Chris Finn, CFO at Forrester]

Thanks, George, and good afternoon, everyone. The third quarter saw an exciting product launch with AI Access. We experienced immediate market validation with bookings and a landmark large enterprise deal incorporating this new product just weeks after its release. Although the ongoing dynamics in the marketplace continue to negatively impact all three lines of business, we delivered Operating Margin and EPS above consensus. We continue to see stabilization in the Research business, with research revenue down 4%, excluding the divestiture of Feedback Now, and improvement on the last quarter's performance.

[Chris Finn, CFO at Forrester]

It is early in the sales cycle, but we are anticipating our new AI Access product to have a positive impact on Q4 and 2026 CV performance. Our consulting and events businesses continue to face headwinds in a tough selling environment. The Consulting business has been meaningfully impacted by the cost-cutting measures enacted in the U.S. Federal Government, and we see these challenges continuing next year. A shift in the timing of one of our larger events may negatively impact the results this quarter, and we see ongoing impediments for that business over the medium term as new leadership is evolving our offering and Go-To-Market motion. The fourth quarter is our largest bookings period, and we are positive about pipeline. However, we are downward-adjusting our revenue guidance based on the performance of Consulting and Events.

[Chris Finn, CFO at Forrester]

This revenue adjustment flows through to a modestly lower margin and EPS guide for the year. Q3 saw a 7% CV decline, which is a continuation of the last two quarters' performance. We anticipate improved performance in the fourth quarter to come from the growing pipeline for the new AI Access product. Therefore, even with the continuing uncertainty in the market, we are expecting CV to improve to a low single-digit decline for the year. For the total company, we generated $94.3 million in revenue for the quarter compared to $102.5 million in the prior year period, which is an overall revenue decrease of 8%. In terms of our revenue breakdown for the quarter, Research Revenue was $72.7 million, down from $77.1 million in 2024. This was a decrease of 6% compared to the third quarter of 2024, with revenue from our subscription research products down 5%.

[Chris Finn, CFO at Forrester]

Excluding the impact of FeedbackNow, which we divested last year, research revenue declined by 4% year-over-year. Client retention of 74% was flat from the prior quarter, however, Wallet retention was up one point to 86%. As discussed in recent quarters, wallet retention is being affected by enrichment challenges. This trend directly reflects the uncertain budgetary and macroeconomic environment we're experiencing. Our Consulting business posted revenues of $21.5 million, which was down 8% compared to the prior year. We are continuing to see uneven performance of the business by each product line. This year, strategy consulting has been negatively impacted by its degrading government business, but advisory grew double digits this quarter. We are expecting this mixed performance to continue for the remainder of the year and into next year.

[Chris Finn, CFO at Forrester]

Finally, regarding our events business, we shifted one of our three major North American Events, Technology Innovation, into Q4, which resulted in insignificant Events Revenue this quarter. As noted last quarter, the outlook for the Events business remains challenged, specifically the outlook for Sponsorship Revenues. The events team continues its work in addressing these issues. Continuing down our P&L on an adjusted basis, Operating Expenses for the third quarter decreased by 11%, primarily driven by lower compensation and related costs. Specifically on headcount for the third quarter, we were down 8% compared to the same period in 2024. We continue to monitor costs very closely, with particular attention focused on headcount, hiring, and attrition. Operating Income increased by 21% to $9.9 million, or 10.5% of revenue in the current quarter, compared to $8.2 million, or 8% of revenue in the third quarter of 2024.

[Chris Finn, CFO at Forrester]

Higher operating income and margin were in part driven by the shift in event timing and also by very careful cost management in the quarter. Interest expense for the quarter was $0.7 million, down slightly from the $0.8 million in the third quarter of 2024. Finally, Net Income and EPS increased 30% and 28% respectively, compared to Q3 of last year, with Net Income at $7.2 million and EPS at $0.37 for the current quarter, compared with Net Income of $5.6 million and EPS of $0.29 in the third quarter of 2024. Looking at our Capital Structure, year-to-date cash flow from operating activities was $24.3 million, and capital expenditures were $1.9 million. We did not pay down any debt in the quarter. We did repurchase approximately $2.4 million worth of shares in the period. We have over $77 million of our stock repurchase authorization intact.

[Chris Finn, CFO at Forrester]

Our Balance Sheet remained strong, with cash at the end of the quarter of approximately $132 million and debt of only $35 million. As mentioned earlier, we are modestly lowering our guidance range for the year. For 2025, we now expect revenue to be $395 to $405 million, or down 6% to 9% versus 2024. The reduction of the range by $5 million is driven by ongoing headwinds in the Consulting and Events businesses. The outlook for the research business remains a mid-single-digit decline for the year. The consulting business is now a high single-digit to low double-digit decline, and the Events business is now a decline in the high 20% range.

[Chris Finn, CFO at Forrester]

We now expect our Operating Margins to be in the range of 7.5% to 8.5% for 2025, and interest expense is expected to be $2.7 million for the year, and we are guiding to a full-year tax rate of 29%. Taking all of this into account, we now expect EPS to be in the range of $1.15 to $1.25 for the full year. This quarter, we took a significant step on our continuing journey with the AI Research Company. The release of the AI Access product and the first major contract win associated with the new offering has shown we have a differentiated product in the marketplace. As George discussed, we continue to believe Forrester Research will play a key role in the age of AI. Our research and analysts will offer trusted, proprietary, strategic, and actionable advice.

[Chris Finn, CFO at Forrester]

This type of trusted guidance is now ever more important in both an uncertain world and a world impacted by AI. Thank you all for taking the time to join us today, and with that, I will hand the call back to George.

[George Colony, Chairman, President, and CEO at Forrester]

Thank you, Chris. To summarize, the company is excited to be introducing the AI Access product, and we are pleased with the early market reaction. It widens the Forrester Decisions portfolio, makes it easier for our clients to get trusted advice fast, and it democratizes access to our Research. Thank you for joining the call, and we will now take questions.

[Operator]

Thank you, sir. As a reminder, to ask a question, you will need to press star one one on your telephone. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster.

[Operator]

I show our first question comes from the line of Andrew Nicholas from William Blair. Please go ahead.

[Tom Ross, Partner and Head of International Distribution at William Blair]

Hi. Good afternoon, guys. Thanks for taking my question. This is Tom Ross on for Andrew Nicholas. I really appreciate the call you guys gave on AI and the great remarks. I was just wondering if you could expand on your thoughts on the perceived disruption from AI, specifically as it relates to just the Research part of the business. Without the guide access, those types of licenses. I'm just curious, what is the typical customer demographic that chooses to go with just the Research Access and not the guide level, or what's the reasoning usually behind it when that's kind of the sale that you do?

[Nate Swan, Chief Sales Officer at Forrester]

It's probably a little bit too early, Tom, to make that call. AI Access is only available for a couple of weeks.

[Nate Swan, Chief Sales Officer at Forrester]

I would expect the demographic to be lower, to be a younger demographic for AI Access, but it's really too early if that was your question. What I would say is if you don't have AI, if you don't have AI access to your product, you're going to have a hard time attracting that younger demographic. Another good reason why we like having the product.

[Tom Ross, Partner and Head of International Distribution at William Blair]

Gotcha. Pushing gears, I was wondering if you could kind of expand on what you're seeing in the sales pipeline having the fourth quarter. I believe last quarter, you had mentioned kind of underperforming on conversion rates. It sounds like you guys have been making some strides in your Go-To-Market strategy. I was wondering if you've seen any improvement on conversion as well.

[Nate Swan, Chief Sales Officer at Forrester]

Yeah. Great question, Tom. We are seeing some improvement.

[Nate Swan, Chief Sales Officer at Forrester]

Specifically, our emerging tech team, we just did a global call with our sales organization today where we called out their conversion rates dropping by 27% year-over-year. Sorry, their Time to Conversion. That was a misstatement on their Time to Conversion dropping 27%. They are seeing really good conversion. What they're doing is what we call a social contract, where they are confirming with the buyer early on in the sales cycle that they would like to be evaluating Forrester. It's an opportunity to hold the client accountable, hold ourselves accountable to the steps to walk through a sales process. We're seeing really, really good progress with that. Time to close one for that team in particular dropped from roughly 80 days down to about 59 days, a significant decrease. The rest of our teams are also in that rough 80 days.

[Nate Swan, Chief Sales Officer at Forrester]

They are working with some larger clients typically in some other teams. We don't expect to have those types of dramatic results, but we do expect to see some pipeline acceleration as our teams are really coaching in this type of methodology to drive faster conversion. As far as size of pipeline, we are roughly the same size year-over-year, so plus about a couple of percent on there. We're seeing a better conversion. We're very hopeful that in Q4, we will see continued improvement in conversion, one, speed, two, and I think to echo both George and Chris's comments on AI Access. AI Access is opening doors for us. We're seeing more clients respond. They want alternatives out there. They want to be able to spread research out to larger parts of the organization. Not every person in an organization needs to have the guidance that we give.

[Nate Swan, Chief Sales Officer at Forrester]

If they have guidance at the top of the organization and access to the same research throughout, that really creates alignment for our clients and has been really well received. Not just on our large government deal, we're seeing it around the world. The international team has done a fantastic job securing win-backs from clients that like this model. We think there's a lot of momentum from that, and we're very hopeful that Q4 will drive some more business.

[Tom Ross, Partner and Head of International Distribution at William Blair]

Thank you. If I could just slip in one quick follow-up, just on the Large Language Models, have they come up at all in customer conversations you guys have had, or have you had any pushback from clients that have tried to use maybe one of the public or switch to the public one or a different type of Large Language Model?

[Nate Swan, Chief Sales Officer at Forrester]

Yeah, absolutely.

[Nate Swan, Chief Sales Officer at Forrester]

I think a lot of customers bring it up and say, "I can use things like ChatGPT or Claude, etc., and I get really good answers." While I'd say they get really good answers, do you really trust where they're coming from? I am certainly not an analyst. I'd let George and Carrie probably answer more on that. A lot of that information is not coming from reliable sources that have models, data, and research that Forrester has. In fact, none of them have what Forrester has. Just to be clear about that. They're not backed by those things. If you're going to make million-dollar, multi-million, or hundred-million-dollar decisions, going out there and trusting ChatGPT or other sources, while that is good information to get, I really don't think that's a reliable way to make a decision for your business model.

[Nate Swan, Chief Sales Officer at Forrester]

You're going to need a trusted source like Forrester to be able to do that.

[Carrie Johnson, Chief Product Officer at Forrester]

If I could, this is Carrie, if I could add one thing onto Nate's comments. For every pushback or client or prospect conversation that we have asking to compare us to the public models, we have more than that asking to actually put our data and insights into their employee environment where they're getting trusted insights to empower their employees. That's actually where most of our conversations are happening, where they're seeing this opportunity to say, "Hey, we've been tasked with providing a world-class set of insights to our employees to make decisions, to go win deals. How can we make sure that Forrester data and insights are in our protected environments?" We don't want our employees relying on the public models to make business decisions.

[Carrie Johnson, Chief Product Officer at Forrester]

More opportunity than threat on this front because we think that companies understand the impact and the importance of trusted data sources.

[Nate Swan, Chief Sales Officer at Forrester]

Just to add on to Carrie, as she brings up an excellent point, I've been involved in several conversations. I know Carrie has. I know how George has with clients that are looking to do exactly that. They're very excited when they see what the previous Izola feature and now AI Access does and allows for them to do. The reaction has been incredible. I mean, I've sat in a meeting with a Chief Digital Officer from a large brand agency, and they wanted to go to commercials almost immediately as they saw this. We are seeing some very good response from clients, so we're excited about that. I mean, this could be a lot of AI used, just as there's a lot.

[Nate Swan, Chief Sales Officer at Forrester]

The moment reminds me a little bit of 2000, 2002, when people would say, "Well, we don't need Forrester anymore. We're going to use Google." My comeback with that was always, "Great. Glad that's your plan. You're going to make a $100 million technology decision. Tell me how that Board Meeting is going to go when you tell them. The research I did to make this decision was made on Google." Obviously, Internet Search helped a lot. AI Search will help a lot. At the end of the day, these are critical decisions which will require critical data and trusted data. That's where Forrester, as I described, will be our place in this future.

[Tom Ross, Partner and Head of International Distribution at William Blair]

Appreciate the color. Thank you, guys.

[George Colony, Chairman, President, and CEO at Forrester]

Good question. Thank you.

[Operator]

Thank you. I show our next question comes from the line of Michael Mathison from Sidoti & Company. Please go ahead.

[Michael Mathison, Senior Equity Analyst at Sidoti & Company]

Thank you for taking my questions, gentlemen. My first question is whether there are any particular verticals or industries where you're seeing better success at gaining new clients or deepening client relationships.

[Nate Swan, Chief Sales Officer at Forrester]

Absolutely. Number one, while it's been a challenging opportunity in the government, we actually think there's a massive opportunity in the U.S. Federal Government. Retention challenges this year as agencies were having DOGE come in and cut budgets. The response to how Forrester is making our offerings available to people and the support that we've gotten from Forrester to go out in front of the Government, talk about what we're doing specifically with AI Access, we've had a number of agencies very interested in what we're doing. We've seen really good success there in the U.S. Again, coming back to the International Markets, we're seeing really good success in the International Markets on the end user side.

[Nate Swan, Chief Sales Officer at Forrester]

Growing that End User Business, which is really our goal, is to grow the End User bBsiness even stronger. We're seeing great success in the international markets, capturing clients from the CPG industry, Manufacturing, Financial Services. Lots of success there, and we're starting to see some breakthroughs. As well as some manufacturing opportunities in North America as well. Our End User New Business team really struggled for about six months, starting to see some rays of sunshine from them as they go into the fourth quarter. We're seeing some net new logo opportunities in Financial Services as well as Manufacturing and CPG.

[Michael Mathison, Senior Equity Analyst at Sidoti & Company]

Thank you. Second question. Your effort to increase the Contract Value per client is a major strategic goal. You were still down here a couple % this quarter. Can you comment on when you feel like that effort would bear a little bit more fruit?

[Chris Finn, CFO at Forrester]

Yeah.

[Chris Finn, CFO at Forrester]

Thanks for the question. This is Chris. Yeah. Look, I think as we move forward here, we're seeing some traction, obviously, with the new product and AI Access and a stabilization of retention rates. I think as we move forward, our expectation is we've got a big quarter in front of us in Q4, but as we get into next year, we should start to see some improvement there in the First Half, especially as the new product gains traction and we continue to see stabilization on retention. Yeah. Average CV per client has just looking at up 5% in the year. Yeah. I get that, Michael. So Average CV per client up 5% in the year.

[Michael Mathison, Senior Equity Analyst at Sidoti & Company]

I'm sorry. I think I have it in front of me, but I'll take your correction. Thank you.

[Chris Finn, CFO at Forrester]

Yeah. So we're up to $162,000 per client.

[Michael Mathison, Senior Equity Analyst at Sidoti & Company]

Thank you.

[Michael Mathison, Senior Equity Analyst at Sidoti & Company]

Thank you for the information. Thank you for taking my questions. Good luck in the coming quarter.

[Chris Finn, CFO at Forrester]

Thanks, Michael. Appreciate it.

[Operator]

Thank you. I show our next question comes from the line of Vincent Colicchio from Barrington Research. Please go ahead.

[Vincent Colicchio, Managing Director at Barrington Research]

Yeah. Nate, on the better conversion this quarter. Can you attribute that to something in particular or is that too difficult to do?

[Nate Swan, Chief Sales Officer at Forrester]

No, as I was mentioning, this emerging tech team has been working what we call our Social Contract for the better part of nine months. They're really starting to see some success. I think the team is gaining confidence in it, Vince. When you first start it, it might feel a little bit awkward to you as you go through a sales process. Now that team is really clicking, and they're doing it every single time.

[Nate Swan, Chief Sales Officer at Forrester]

Anytime they get engaged with a new prospect, they are saying, "Hey, it seems like there's genuine interest. I think we can help you. This is what this process looks like over the next six to eight weeks. Is this something you're interested in doing?" This will be something that would cost money, clearly, to invest in Forrester. Typically, the budgets would be between X and Y for something like this, although we don't want to predetermine what it would be. Is this something that you're interested in, can provide access to your team who has the initiatives to execute that, are a part of your priorities for the business? If you are interested in doing that, we are interested in working with you to see if that works. You can disengage at any time. It's not a commitment to buy.

[Nate Swan, Chief Sales Officer at Forrester]

I think they've gotten really good at that talk track. We had, as I said, a global call earlier today, really encouraging the rest of the team that you need to do this. This is working. They are having success. They are seeing not just their Closed Won get better, but their Closed Lost. Even when a client agrees to go through a Social Contract, you still don't have the 100% conversion of your Stage One opportunities. You're just entering the pipeline. It's just a commitment to look and view, and it allows the Sales Rep to hold the Client accountable and the Client to hold the Sales Rep accountable and hold Forrester accountable. We've seen really good luck in it. I think that we'll start seeing more of that.

[Nate Swan, Chief Sales Officer at Forrester]

When you marry that with our Forrester Agile Sales Technique, I think it's calling high, making sure that we understand the value sweet spot that we are looking for for our clients, making sure that there's alignment, and that at the end of the day, they don't want to waste their time. We don't want to waste their time. We believe that we can really drive a better conversion. Dropping our Closed Lost in that group from 130 days to about 105 days is significant. You're not wasting time on opportunities that are never going to close.

[Vincent Colicchio, Managing Director at Barrington Research]

George, one for you. What are your thoughts on the Carousel partnership? When do you expect it to start contributing, and what makes you optimistic?

[Nate Swan, Chief Sales Officer at Forrester]

Yeah. George. Sorry, Vince. I'll jump in for George because that is part of a sales play.

[Nate Swan, Chief Sales Officer at Forrester]

One of my sales leaders for the government team, Dana Barnes, has done a really nice job. He has worked with Carousel in the past with the Government Teams. What that allows us to do is, in previous software companies that he was with, open up markets. They help with Marketing and opening doors and contract vehicles that we might not be able to get on. We've just gotten started with them. We're starting to see a lot of traction in the Government space. While it's been really tough sledding in the Government market, we had a big win. Number one, we've been in front of over 200 buyers at one of the—I can't remember. I think it's called—through Carousel? Not through Carousel, but at an event called FedTalk that we were at when our CTO was there.

[Nate Swan, Chief Sales Officer at Forrester]

Carousel is getting us into states that we haven't been doing business in and Agencies that we haven't been doing business in. We haven't seen a return yet, but I expect that we will relatively soon. That was signed in the middle of Q3.

[Vincent Colicchio, Managing Director at Barrington Research]

Are there other partnerships like this that may be useful to other parts of your business?

[Nate Swan, Chief Sales Officer at Forrester]

It's a great question. I think we want to see what success looks like. Where Forrester Research doesn't have a direct presence, we have our IBD model, and we have gone through partners there. That business has been really successful. That's been in markets that Forrester Research is not in, in Latin America and other countries, Middle East, etc. Pretty successful on that side. I'm sure that we could explore other partnerships.

[Nate Swan, Chief Sales Officer at Forrester]

To start, we thought Carousel was a good place for us to go, and they've been really responsive to us.

[Michael Mathison, Senior Equity Analyst at Sidoti & Company]

Thanks, guys.

[Nate Swan, Chief Sales Officer at Forrester]

Thank you, Vince. Appreciate it.

[Nate Swan, Chief Sales Officer at Forrester]

Thanks, Vince.

[Operator]

Thank you. That concludes our Q&A session. At this time, I would like to turn the conference back to Chris Finn, Chief Financial Officer, for closing remarks.

[Chris Finn, CFO at Forrester]

Yeah. Thanks, Ron, for joining today. As always, if you have any questions or follow-up, please reach out to Ed or myself. Thank you. Thank you very much. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

Participants

Executives

• Carrie Johnson, Chief Product Officer

Analysts

• Chris Finn, CFO at Forrester
• Michael Mathison, Senior Equity Analyst at Sidoti & Company
• George Colony, Chairman, President, and CEO at Forrester
• Tom Ross, Partner and Head of International Distribution at William Blair
• Vincent Colicchio, Managing Director at Barrington Research
• Ed Bryce Morris, VP of Corporate Development and Investor Relations at Forrester
• Nate Swan, Chief Sales Officer at Forrester