Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by ~~checkmark~~check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~August 2,~~November 1, 2023, ~~19,212,000~~19,239,000 shares of the registrant’s common stock were outstanding.

The accompanying notes are an integral part of these consolidated financial statements.

Note 12 — Stockholders’ Equity

The components of stockholders’ equity are as follows (in thousands):


	Three Months Ended June 30, 2023																				Three Months Ended September 30, 2023
	Common Stock									Treasury Stock					Accumulated						Common Stock								Treasury Stock					Accumulated
	Number of Shares		$0.01ParValue		Additional Paid-in Capital			Retained Earnings		Number of Shares		Cost			Other Comprehensive Income (Loss)			Total Stockholders' Equity			Number of Shares		$0.01ParValue		Additional Paid-in Capital		Retained Earnings		Number of Shares		Cost			Other Comprehensive Income (Loss)			Total Stockholders' Equity
Balance at March 31, 2023		24,495	$	245	$	265,691		$	170,556		5,305	$	(207,067	)	$	(6,679	)	$	222,746
Balance at June 30, 2023																						24,512	$	245	$	269,371	$	175,860		5,332	$	(207,887	)	$	(5,944	)	$	231,645
Issuance of common stock under stock plans, including tax effects		17		—		(180	)		—		—		—			—			(180	)		160		2		282		—		—		—			—			284
Repurchases of common stock		—		—		—			—		27		(820	)		—			(820	)		—		—		—		—		105		(3,262	)		—			(3,262	)
Stock-based compensation expense		—		—		3,860			—		—		—			—			3,860			—		—		4,144		—		—		—			—			4,144
Net income		—		—		—			5,304		—		—			—			5,304			—		—		—		2,484		—		—			—			2,484
Net change in marketable investments, net of tax		—		—		—			—		—		—			(11	)		(11	)		—		—		—		—		—		—			30			30
Foreign currency translation		—		—		—			—		—		—			746			746			—		—		—		—		—		—			(2,435	)		(2,435	)
Balance at June 30, 2023		24,512	$	245	$	269,371		$	175,860		5,332	$	(207,887	)	$	(5,944	)	$	231,645
Balance at September 30, 2023																						24,672	$	247	$	273,797	$	178,344		5,437	$	(211,149	)	$	(8,349	)	$	232,890


	Three Months Ended June 30, 2022																			Three Months Ended September 30, 2022
	Common Stock								Treasury Stock					Accumulated						Common Stock									Treasury Stock					Accumulated
	Number of Shares		$0.01 Par Value		Additional Paid-in Capital		Retained Earnings		Number of Shares		Cost			Other Comprehensive Income (Loss)			Total Stockholders' Equity			Number of Shares		$0.01 Par Value		Additional Paid-in Capital			Retained Earnings		Number of Shares		Cost			Other Comprehensive Income (Loss)			Total Stockholders' Equity
Balance at March 31, 2022		24,143	$	241	$	251,001	$	156,973		5,202	$	(201,414	)	$	(4,371	)	$	202,430
Balance at June 30, 2022																					24,159	$	242	$	254,937		$	170,847		5,305	$	(207,067	)	$	(8,860	)	$	210,099
Issuance of common stock under stock plans, including tax effects		16		1		99		—		—		—			—			100			193		2		(501	)		—		—		—			—			(499	)
Repurchases of common stock		—		—		—		—		103		(5,653	)		—			(5,653	)
Stock-based compensation expense		—		—		3,837		—		—		—			—			3,837			—		—		3,905			—		—		—			—			3,905
Net income		—		—		—		13,874		—		—			—			13,874			—		—		—			5,414		—		—			—			5,414
Net change in interest rate swap, net of tax		—		—		—		—		—		—			68			68			—		—		—			—		—		—			(5	)		(5	)
Net change in marketable investments, net of tax		—		—		—		—		—		—			(29	)		(29	)		—		—		—			—		—		—			(54	)		(54	)
Foreign currency translation		—		—		—		—		—		—			(4,528	)		(4,528	)		—		—		—			—		—		—			(4,971	)		(4,971	)
Balance at June 30, 2022		24,159	$	242	$	254,937	$	170,847		5,305	$	(207,067	)	$	(8,860	)	$	210,099
Balance at September 30, 2022																					24,352	$	244	$	258,341		$	176,261		5,305	$	(207,067	)	$	(13,890	)	$	213,889


	Six Months Ended June 30, 2023																			Nine Months Ended September 30, 2023
	Common Stock								Treasury Stock					Accumulated						Common Stock								Treasury Stock					Accumulated
	Number of Shares		$0.01 Par Value		Additional Paid-in Capital		Retained Earnings		Number of Shares		Cost			Other Comprehensive Income (Loss)			Total Stockholders' Equity			Number of Shares		$0.01 Par Value		Additional Paid-in Capital		Retained Earnings		Number of Shares		Cost			Other Comprehensive Income (Loss)			Total Stockholders' Equity
Balance at December 31, 2022		24,367	$	244	$	261,766	$	174,631		5,305	$	(207,067	)	$	(7,918	)	$	221,656			24,367	$	244	$	261,766	$	174,631		5,305	$	(207,067	)	$	(7,918	)	$	221,656
Issuance of common stock under stock plans, including tax effects		145		1		580		—		—		—			—			581			305		3		862		—		—		—			—			865
Repurchases of common stock		—		—		—		—		27		(820	)		—			(820	)		—		—		—		—		132		(4,082	)		—			(4,082	)
Stock-based compensation expense		—		—		7,025		—		—		—			—			7,025			—		—		11,169		—		—		—			—			11,169
Net income		—		—		—		1,229		—		—			—			1,229			—		—		—		3,713		—		—			—			3,713
Net change in marketable investments, net of tax		—		—		—		—		—		—			22			22			—		—		—		—		—		—			52			52
Foreign currency translation		—		—		—		—		—		—			1,952			1,952			—		—		—		—		—		—			(483	)		(483	)
Balance at June 30, 2023		24,512	$	245	$	269,371	$	175,860		5,332	$	(207,887	)	$	(5,944	)	$	231,645
Balance at September 30, 2023																					24,672	$	247	$	273,797	$	178,344		5,437	$	(211,149	)	$	(8,349	)	$	232,890


	Six Months Ended June 30, 2022																			Nine Months Ended September 30, 2022
	Common Stock								Treasury Stock					Accumulated						Common Stock								Treasury Stock					Accumulated
	Number of Shares		$0.01 Par Value		Additional Paid-in Capital		Retained Earnings		Number of Shares		Cost			Other Comprehensive Income (Loss)			Total Stockholders' Equity			Number of Shares		$0.01 Par Value		Additional Paid-in Capital		Retained Earnings		Number of Shares		Cost			Other Comprehensive Income (Loss)			Total Stockholders' Equity
Balance at December 31, 2021		24,085	$	241	$	245,985	$	152,825		5,027	$	(191,955	)	$	(3,189	)	$	203,907			24,085	$	241	$	245,985	$	152,825		5,027	$	(191,955	)	$	(3,189	)	$	203,907
Issuance of common stock under stock plans, including tax effects		74		1		1,821		—		—		—			—			1,822			267		3		1,320		—		—		—			—			1,323
Repurchases of common stock		—		—		—		—		278		(15,112	)		—			(15,112	)		—		—		—		—		278		(15,112	)		—			(15,112	)
Stock-based compensation expense		—		—		7,131		—		—		—			—			7,131			—		—		11,036		—		—		—			—			11,036
Net income		—		—		—		18,022		—		—			—			18,022			—		—		—		23,436		—		—			—			23,436
Net change in interest rate swap, net of tax		—		—		—		—		—		—			264			264			—		—		—		—		—		—			259			259
Net change in marketable investments, net of tax		—		—		—		—		—		—			(93	)		(93	)		—		—		—		—		—		—			(147	)		(147	)
Foreign currency translation		—		—		—		—		—		—			(5,842	)		(5,842	)		—		—		—		—		—		—			(10,813	)		(10,813	)
Balance at June 30, 2022		24,159	$	242	$	254,937	$	170,847		5,305	$	(207,067	)	$	(8,860	)	$	210,099
Balance at September 30, 2022																					24,352	$	244	$	258,341	$	176,261		5,305	$	(207,067	)	$	(13,890	)	$	213,889

Equity Plans

Restricted stock unit activity for the ~~six~~nine months ended ~~June~~September 30, 2023 is presented below (in thousands, except per share data):


				Weighted-					Weighted-
				Average					Average
	Number of			Grant Date		Number of			Grant Date
	Shares			Fair Value		Shares			Fair Value
Unvested at December 31, 2022		682		$	46.28		682		$	46.28
Granted		309			34.52		625			33.34
Vested		(117	)		50.70		(256	)		45.33
Forfeited		(86	)		43.55		(99	)		43.24
Unvested at June 30, 2023		788		$	41.32
Unvested at September 30, 2023							952		$	38.36

Stock option activity for the ~~six~~nine months ended ~~June~~September 30, 2023 is presented below (in thousands, except per share data and contractual term):


				Weighted -		Weighted -							Weighted -		Weighted -
				Average		Average							Average		Average
				Exercise		Remaining		Aggregate					Exercise		Remaining		Aggregate
	Number			Price Per		Contractual		Intrinsic		Number			Price Per		Contractual		Intrinsic
	of Shares			Share		Term (in years)		Value		of Shares			Share		Term (in years)		Value
Outstanding at December 31, 2022		89		$	35.58						89		$	35.58
Granted		144			33.04						144			33.04
Exercised		(2	)		34.37						(2	)		34.37
Forfeited		(26	)		34.27						(27	)		34.23
Outstanding at June 30, 2023		205		$	33.97		6.74	$	—
Exercisable at June 30, 2023		76		$	35.55		1.81	$	—
Vested and expected to vest at June 30, 2023		205		$	33.97		6.74	$	—
Outstanding at September 30, 2023											204		$	33.98		6.52	$	—
Exercisable at September 30, 2023											75		$	35.58		1.57	$	—
Vested and expected to vest at September 30, 2023											204		$	33.98		6.52	$	—

In May 2023, stockholders of the Company approved the amendment and restatement of the Forrester Research, Inc. Amended and Restated Equity Incentive Plan (the “Amended and Restated Equity Incentive Plan”), pursuant to which the number of shares available for purchase was increased by 3,500,000 shares.

Stock-Based Compensation

Forrester recognizes the fair value of stock-based compensation over the requisite service period of the individual grantee, which generally equals the vesting period. Stock-based compensation was recorded in the following expense categories in the Consolidated Statements of Operations (in thousands):

Three Months Ended

Six Months Ended

June 30,

June 30,

2023

2022

2023

2022

Cost of services and fulfillment

$
2,209

$
2,203

$
4,056

$
4,129

Selling and marketing

807

752

1,304

1,385

General and administrative

844

882

1,665

1,617

Total

$
3,860

$
3,837

$
7,025

$
7,131


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Cost of services and fulfillment	$	2,449	$	2,268	$	6,505	$	6,397
Selling and marketing		790		743		2,094		2,128
General and administrative		905		894		2,570		2,511
Total	$	4,144	$	3,905	$	11,169	$	11,036

Forrester utilizes the Black-Scholes valuation model for estimating the fair value of options granted under the equity incentive plans and shares subject to purchase under the employee stock purchase plan, which were valued using the following assumptions:


	Three Months Ended									Six Months Ended									Three Months Ended									Nine Months Ended
	June 30,									June 30,									September 30,									September 30,
	2023						2022			2023						2022			2023						2022			2023						2022
	Equity Incentive Plans			Employee Stock Purchase Plan			Employee Stock Purchase Plan			Equity Incentive Plans			Employee Stock Purchase Plan			Employee Stock Purchase Plan			Equity Incentive Plans			Employee Stock Purchase Plan			Employee Stock Purchase Plan			Equity Incentive Plans			Employee Stock Purchase Plan			Employee Stock Purchase Plan
Average risk-free interest rate		4.27	%		5.00	%		0.86	%		4.27	%		5.00	%		0.86	%		4.27	%		5.51	%		3.71	%		4.27	%		5.51	%		3.71	%
Expected dividend yield		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%
Expected life	4.75 Years			0.5 Years			0.5 Years			4.75 Years			0.5 Years			0.5 Years			4.75 Years			0.5 Years			0.5 Years			4.75 Years			0.5 Years			0.5 Years
Expected volatility		43	%		46	%		24	%		43	%		46	%		24	%		43	%		35	%		33	%		43	%		35	%		33	%
Weighted average fair value	$	14.24		$	9.47		$	11.02		$	14.24		$	9.47		$	11.02		$	14.24		$	7.90		$	10.22		$	14.24		$	7.90		$	10.22

Treasury Stock

As of ~~June~~September 30, 2023, Forrester’s Board of Directors had authorized an aggregate $585.0 million to purchase common stock under its stock repurchase program. The shares repurchased may be used, among other things, in connection with Forrester’s equity incentive and purchase plans. During each of the three and ~~six~~nine months ended ~~June~~September 30, 2023, the Company repurchased approximately 270.1 ~~thousand~~million shares of common stock at an aggregate cost of approximately $~~0.8~~3.3 ~~million.~~and $4.1 million, respectively. During the three and ~~six~~nine months ended ~~June~~September 30, 2022, the Company repurchased approximately~~0.1~~ ~~million shares and~~ 0.3 million shares of common stock at an aggregate cost of approximately $~~5.7~~ ~~million and $~~15.1 ~~million, respectively.~~million. From the inception of the program through ~~June~~September 30, 2023, the Company repurchased ~~17.0~~17.1 million shares of common stock at an aggregate cost of $~~510.9~~514.1 million.

Note 13 — Restructuring and Related Costs

In January 2023, the Company implemented a reduction in its workforce of approximately 4% ~~of its employees~~ across various geographies and functions to streamline operations. The Company recorded $4.3 million of severance and related costs for this action during the fourth quarter of 2022, and $0.6 million during the first quarter of 2023. The Company also recorded a restructuring charge of $5.0 million during the fourth quarter of 2022 related to closing one floor of its offices located at 150 Spear Street, San Francisco, California, of which $3.7 million related to an impairment of a right-of-use asset and $1.3 million related to an impairment of leasehold improvements. The Company expects the accrued restructuring and related costs as of ~~June~~September 30, 2023 to be fully paid by the end of 2023.

The following table rolls forward the activity in the restructuring accrual for the January 2023 action for the ~~six~~nine months ended ~~June~~September 30, 2023 (in thousands):


Accrual at December 31, 2022	$	4,360		$	4,360
Additional restructuring and related costs		1,589			1,550
Non-cash charge (included above)		(1,002	)		(1,002	)
Cash payments		(3,815	)		(4,546	)
Accrual at June 30, 2023	$	1,132
Accrual at September 30, 2023				$	362

In May 2023, the Company implemented a reduction in its workforce of approximately 8% ~~of its workforce~~ across various geographies and functions to better align its cost structure and to streamline its sales and consulting organizations. The Company recorded $7.5 million of severance and related costs for this action during the second quarter of 2023. In addition, the Company closed certain of its smaller offices both inside and outside the U.S. in order to reduce facility costs and better match its facilities to its hybrid work strategy. As a result of closing the offices, the Company recorded restructuring costs of $2.3 million, which included $1.3 million related to right-of-use asset impairments and accelerated amortization and $0.6 million related to impairments of leasehold improvements. In addition, the Company incurred $0.7 million in contract termination costs. The Company expects the majority of the accrued restructuring and related costs as of ~~June~~September 30, 2023 to be fully paid by the end of 2023.

The following table rolls forward the activity in the restructuring accrual for the May 2023 action for the ~~six~~nine months ended ~~June~~September 30, 2023 (in thousands):


Accrual at December 31, 2022	$	—		$	—
Additional restructuring and related costs		10,532			10,590
Non-cash charge (included above)		(2,253	)		(2,253	)
Non-cash lease settlement gain (included above)					139
Cash payments		(3,299	)		(6,221	)
Accrual at June 30, 2023	$	4,980
Accrual at September 30, 2023				$	2,255

Note 14 — Operating Segments

The Company's chief operating decision-maker (used in determining the Company's segments) is the chief executive officer and the chief financial officer. The Company operates in three segments: Research, Consulting, and Events. These segments, which are also the Company's reportable segments, are based on the management structure of the Company and how the chief operating decision maker uses financial information to evaluate performance and determine how to allocate resources. The Company’s products and services are delivered through each segment as described below.

The Research segment includes the revenues from all of the Company’s research products as well as consulting revenues from advisory services (such as speeches and advisory days) delivered by the Company’s research organization. Research segment costs include the cost of the organizations responsible for developing and delivering these products in addition to the costs of the product management organization responsible for product pricing and packaging, and the launch of new products.

The Consulting segment includes the revenues and the related costs of the Company’s project consulting organization. The project consulting organization delivers a majority of the Company’s project consulting revenue and certain advisory services.

The Events segment includes the revenues and the costs of the organization responsible for developing and hosting in-person and virtual events.

The Company evaluates reportable segment performance and allocates resources based on segment revenues and expenses. Segment expenses include the direct expenses of each segment organization and exclude selling and marketing expenses, general and administrative expenses, stock-based compensation expense, depreciation expense, adjustments to incentive bonus compensation from target amounts, amortization of intangible assets, restructuring and related costs, interest ~~and~~expense, other income, ~~(expense),~~ and gains on investments. The accounting policies used by the segments are the same as those used in the consolidated financial statements.

The Company provides information by reportable segment in the tables below (in thousands):

Research Segment

Consulting Segment

Events Segment

Consolidated

Three Months Ended June 30, 2023

Research revenues

$
87,699

$
—

$
—

$
87,699

Consulting revenues

7,003

22,967

—

29,970

Events revenues

—

—

17,920

17,920

Total segment revenues

94,702

22,967

17,920

135,589

Segment expenses

(32,536
)

(11,429
)

(10,524
)

(54,489
)
Selling, marketing, administrative and other expenses

(59,212
)
Amortization of intangible assets

(3,068
)
Restructuring and related costs

(10,532
)
Interest expense, other income, and gains on investments

(216
)
Income before income taxes

$
8,072


	Research Segment			Consulting Segment			Events Segment			Consolidated			Research Segment			Consulting Segment			Events Segment			Consolidated
Three Months Ended June 30, 2022
Three Months Ended September 30, 2023
Research revenues	$	89,447		$	—		$	—		$	89,447		$	80,606		$	—		$	—		$	80,606
Consulting revenues		10,921			28,341			—			39,262			6,517			21,720			—			28,237
Events revenues		—			—			19,537			19,537			—			—			4,588			4,588
Total segment revenues		100,368			28,341			19,537			148,246			87,123			21,720			4,588			113,431
Segment expenses		(32,897	)		(14,059	)		(11,051	)		(58,007	)		(31,749	)		(10,739	)		(4,031	)		(46,519	)
Selling, marketing, administrative and other expenses											(66,182	)											(58,796	)
Amortization of intangible assets											(3,354	)											(3,041	)
Restructuring and related costs																							(19	)
Interest expense, other income, and gains on investments											(432	)											(195	)
Income before income taxes										$	20,271											$	4,861

Research Segment

Consulting Segment

Events Segment

Consolidated

Six Months Ended June 30, 2023

Research revenues

$
168,605

$
—

$
—

$
168,605

Consulting revenues

14,922

46,798

—

61,720

Events revenues

—

—

18,934

18,934

Total segment revenues

183,527

46,798

18,934

249,259

Segment expenses

(68,043
)

(23,782
)

(12,155
)

(103,980
)
Selling, marketing, administrative and other expenses

(123,876
)
Amortization of intangible assets

(6,134
)
Restructuring and related costs

(12,121
)
Interest expense, other income, and gains on investments

(459
)
Income before income taxes

$
2,689


	Research Segment			Consulting Segment			Events Segment			Consolidated			Research Segment			Consulting Segment			Events Segment			Consolidated
Six Months Ended June 30, 2022
Three Months Ended September 30, 2022
Research revenues	$	175,227		$	—		$	—		$	175,227		$	87,038		$	—		$	—		$	87,038
Consulting revenues		22,111			55,582			—			77,693			9,015			28,367			—			37,382
Events revenues		—			—			20,297			20,297			—			—			3,259			3,259
Total segment revenues		197,338			55,582			20,297			273,217			96,053			28,367			3,259			127,679
Segment expenses		(67,077	)		(28,376	)		(12,802	)		(108,255	)		(33,058	)		(14,747	)		(3,377	)		(51,182	)
Selling, marketing, administrative and other expenses											(131,072	)											(64,588	)
Amortization of intangible assets											(6,716	)											(3,352	)
Interest expense, other expense, and gains on investments											(876	)
Interest expense, other income, and gains on investments																							(238	)
Income before income taxes										$	26,298											$	8,319


	Research Segment			Consulting Segment			Events Segment			Consolidated
Nine Months Ended September 30, 2023
Research revenues	$	249,211		$	—		$	—		$	249,211
Consulting revenues		21,439			68,518			—			89,957
Events revenues		—			—			23,522			23,522
Total segment revenues		270,650			68,518			23,522			362,690
Segment expenses		(99,792	)		(34,521	)		(16,186	)		(150,499	)
Selling, marketing, administrative and other expenses											(182,672	)
Amortization of intangible assets											(9,175	)
Restructuring and related costs											(12,140	)
Interest expense, other income, and gains on investments											(654	)
Income before income taxes										$	7,550


	Research Segment			Consulting Segment			Events Segment			Consolidated
Nine Months Ended September 30, 2022
Research revenues	$	262,265		$	—		$	—		$	262,265
Consulting revenues		31,126			83,949			—			115,075
Events revenues		—			—			23,556			23,556
Total segment revenues		293,391			83,949			23,556			400,896
Segment expenses		(100,135	)		(43,123	)		(16,179	)		(159,437	)
Selling, marketing, administrative and other expenses											(195,660	)
Amortization of intangible assets											(10,068	)
Interest expense, other income, and gains on investments											(1,114	)
Income before income taxes										$	34,617

Note 15 — Contingencies

From time to time, the Company may be subject to legal proceedings and civil and regulatory claims that arise in the ordinary course of its business activities. It is the Company's policy to record accruals for legal contingencies to the extent that it has concluded that it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated, and to expense costs associated with loss contingencies, including any related legal fees, as they are incurred. The Company reviews its loss contingencies at least quarterly and adjusts its accruals and/or disclosures to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, or other new information, as deemed necessary. Once established, a provision may change in the future due to new developments or changes in circumstances and could increase or decrease the Company’s earnings in the period that the changes are made. Following an April 2023 mediation in a wage-related matter that resulted in ana settlement agreement ~~in principle,~~subject to court approval, the Company accrued $4.8 million of expense in the quarter ended March 31, 2023 that is classified in general and administrative expense in the Consolidated Statement of Operations.

The Company believes that it has meritorious defenses in connection with its current legal proceedings and claims and intends to vigorously contest each of them. Regardless of the outcome, legal proceedings and claims can have a material adverse effect on the Company because of defense and settlement costs, diversion of management resources, and other factors.

In the opinion of the Company's management, based upon information currently available to the Company, while the outcome of these legal proceedings and claims is uncertain, the likely results of these legal proceedings and claims are not expected, either individually or in the aggregate, to have a material adverse effect on the Company's financial position, results of operations or cash flows, although the effect could be material to the Company's consolidated results of operations or consolidated cash flows for any interim reporting period.

2021

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

This Quarterly Report on Form 10-Q contains 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. Reference is made in particular to our statements about changing stakeholder expectations, migration of our clients into our Forrester Decisions products, product development, holding hybrid events, possible acquisitions, future dividends, future share repurchases, future growth rates, operating income and cash from operations, future deferred revenue, future compliance with financial covenants under our credit facility, future interest expense, anticipated increases in, and productivity of, our sales force and headcount, the adequacy of our cash, and cash flows to satisfy our working capital and capital expenditures, and the anticipated impact of accounting standards. These statements are based on our current plans and expectations and involve risks and uncertainties. Important factors that could cause actual future activities and results to differ include, among others, our ability to retain and enrich subscriptions to, and licenses of, our Research products and services, our ability to fulfill existing or generate new consulting engagements and advisory services, our ability to generate and increase demand for the Events we host, any adverse economic conditions that result in a reduction in technology spending or demand for our products and services, our international operations expose us to a variety of operational risks which could negatively impact us, our ability to offer new products and services, our dependence on key personnel, our ability to attract and retain qualified professional staff, our ability to respond to business and economic conditions and market trends, the impact of our outstanding debt, competition and industry consolidation, possible variations in our quarterly operating results, concentration of our stock ownership, the possibility of network disruptions and security breaches, our ability to enforce and protect our intellectual property rights, compliance with privacy laws, taxation risks, risks related to health epidemics that could adversely impact our business and any weakness identified in our system of internal controls. These risks are described more completely in our Annual Report on Form 10-K for the year ended December 31, 2022. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.

We derive revenues from subscriptions to our Research products and services, licensing electronic “reprints” of our Research, performing consulting projects and advisory services, and hosting events. We offer contracts for our Research products that are typically renewable annually and payable in advance. Subscription products are recognized as revenue over the term of the contract. Accordingly, a substantial portion of our billings are initially recorded as deferred revenue. Reprints include an obligation to deliver a customer-selected research document and certain usage data provided through an on-line platform, which represents two performance obligations. We recognize revenue for the performance obligation for the data portion of the reprint ratably over the license term. We recognize revenue for the performance obligation for the research document at the time of providing access to the document. Billings for licensing of reprints are initially recorded as deferred revenue. Clients purchase consulting projects and advisory services independently and/or to supplement their access to our subscription-based products. Consulting project revenues, which are based upon fixed-fee agreements, are recognized as the services are provided. Advisory service revenues, such as speeches and advisory days, are recognized when the service is complete or the customer receives the agreed upon deliverable. Billings attributable to consulting projects and advisory services are initially recorded as deferred revenue. Events revenues consist of ticket and sponsorship sales for a Forrester-hosted event. Billings for events are also initially recorded as deferred revenue and are recognized as revenue upon completion of each event.

Our primary operating expenses consist of cost of services and fulfillment, selling and marketing expenses, and general and administrative expenses. Cost of services and fulfillment represents the costs associated with the production and delivery of our products and services, including salaries, bonuses, employee benefits, and stock-based compensation expense for all personnel that produce and deliver our products and services, including all associated editorial, travel, and support services. Selling and marketing expenses include salaries, sales commissions, bonuses, employee benefits, stock-based compensation expense, travel expenses, promotional costs, and other costs incurred in marketing and selling our products and services. General and administrative expenses include the costs of the technology, operations, finance, and human resources groups and our other administrative functions, including salaries, bonuses, employee benefits, and stock-based compensation expense. Overhead costs such as facilities, net of sublease income, and annual fees for cloud-based information technology systems are allocated to these categories according to the number of employees in each group.

Our key metrics focus on our contract value ("CV") products. We are focusing on CV products as these products are our most profitable products and historically our contracts for CV products have renewed at high rates (as measured by our client retention and wallet retention metrics). Our CV products make up essentially all of our research revenues.

We calculate CV at the foreign currency rates used for internal planning purposes each year. For comparative purposes, we have recast historical CV at the current year foreign currency rates. We have included the recast CV metric below for the ~~six~~nine months ended

~~June~~ September 30, 2022, and we have also provided recast CV amounts dating back to the ~~second~~third quarter of 2021, on the investor relations section of our website.

Contract value, client retention, wallet retention, and number of clients are metrics that we believe are important to understanding our research business. We define these metrics as follows:

•

Contract value (CV) — is defined as the value attributable to all of our recurring research-related contracts. Contract value is calculated as the annualized value of all contracts in effect at a specific point in time, without regard to how much revenue has already been recognized. Contract value primarily consists of subscription-based products for which revenue is recognized on a ratable basis, except for the entitlements embedded in our subscription products, such as event tickets and advisory sessions, for which the revenue is recognized when the item is delivered. Contract value also includes our reprint products, as these products are used throughout the year by our clients and are typically renewed.

•

Client retention — represents the percentage of client companies (defined as all clients that buy a CV product) at the prior year measurement date that have active contracts at the current year measurement date.

•

Wallet retention — represents a measure of the CV we have retained with clients over a twelve-month period, including increases or decreases in retained client CV during the period. Wallet retention is calculated on a percentage basis by dividing the annualized contract value of our current clients, who were also clients a year ago, by the total annualized contract value from a year ago.

•

Clients — is calculated at the enterprise level as all clients that have an active CV contract.

Client retention and wallet retention are not necessarily indicative of the rate of future retention of our revenue base. A summary of our key metrics is as follows (dollars in millions):


	As of						Absolute			Percentage			As of						Absolute			Percentage
	June 30,						Increase			Increase			September 30,						Increase			Increase
	2023			2022			(Decrease)			(Decrease)			2023			2022			(Decrease)			(Decrease)
Contract value	$	344.0		$	345.3		$	(1.3	)		(—	%)	$	349.4		$	348.9		$	0.5			(—	%)
Client retention		74	%		76	%	(2) points				—			73	%		75	%	(2) points
Wallet retention		92	%		99	%	(7) points				—			91	%		98	%	(7) points
Number of clients		2,604			2,928			(324	)		(11	%)		2,538			2,875			(337	)		(12	%)

Contract value at ~~June~~September 30, 2023 was consistent with the prior year period. Client retention decreased by 2 percentage points and wallet retention decreased by 7 percentage points at ~~June~~September 30, 2023 compared to the prior year ~~period, however~~period. However, client retention decreased by 1 percentage point compared to the prior quarter and wallet retention ~~metrics were~~was consistent ~~with~~compared to the prior quarter. The decrease in our retention rates and number of clients from the prior year period is primarily attributable to 1) macroeconomic conditions affecting our client base including a) funding and budget pressure on our smaller technology clients and the technology industry in general, and b) the uncertain economic conditions caused by ~~high-inflation, increasing~~inflation, increased interest rates, geopolitical turbulence, and the ongoing threat of recession, and 2) the ongoing transition of our client base to our Forrester Decisions product platform that was launched in August 2021. As of September 30, 2023, approximately 57% of our overall CV is in our Forrester Decisions product platform. In the longer term, we anticipate that approximately 80% of our CV will be in our Forrester Decisions product platform. The remaining approximate 20% of CV represents non-Forrester Decisions CV products, primarily reprints. The ongoing macroeconomic conditions and product transition are anticipated to pressure our key metrics through ~~2023.~~at least the first half of 2024.

Management’s discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including but not limited to, those related to our revenue recognition, goodwill, intangible and other long-lived assets, and income taxes. Management bases its estimates on historical experience, data available at the time the estimates are made, and various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Our critical accounting estimates are described in our Annual Report on Form 10-K for the year ended December 31, 2022.

2223

Results of Operations

The following table sets forth our statement of operations as a percentage of total revenues for the periods indicated:


	Three Months Ended						Six Months Ended						Three Months Ended						Nine Months Ended
	June 30,						June 30,						September 30,						September 30,
	2023			2022			2023			2022			2023			2022			2023			2022
Revenues:
Research revenues		64.7	%		60.3	%		67.6	%		64.1	%		71.1	%		68.2	%		68.7	%		65.4	%
Consulting revenues		22.1			26.5			24.8			28.4			24.9			29.3			24.8			28.7
Events revenues		13.2			13.2			7.6			7.5			4.0			2.5			6.5			5.9
Total revenues		100.0			100.0			100.0			100.0			100.0			100.0			100.0			100.0
Operating expenses:
Cost of services and fulfillment		40.3			41.1			41.7			41.8			42.3			41.3			41.9			41.6
Selling and marketing		30.7			30.3			33.3			32.6			35.2			34.6			33.9			33.2
General and administrative		11.3			10.7			14.7			11.5			13.3			12.9			14.2			11.9
Depreciation		1.5			1.6			1.6			1.7			2.0			1.9			1.8			1.8
Amortization of intangible assets		2.3			2.3			2.5			2.5			2.7			2.6			2.5			2.6
Restructuring and related costs		7.8			—			4.9			—			—			—			3.4			—
Income from operations		6.1			14.0			1.3			9.9			4.5			6.7			2.3			8.9
Interest expense		(0.5	)		(0.4	)		(0.6	)		(0.4	)		(0.7	)		(0.5	)		(0.6	)		(0.4	)
Other income (expense), net		0.4			0.1			0.4			(0.1	)
Other income, net														0.5			0.3			0.4			—
Gain on investments, net		—			—			—			0.2			—			—			—			0.1
Income before income taxes		6.0			13.7			1.1			9.6			4.3			6.5			2.1			8.6
Income tax expense		2.1			4.3			0.6			3.0			2.1			2.3			1.1			2.8
Net income		3.9	%		9.4	%		0.5	%		6.6	%		2.2	%		4.2	%		1.0	%		5.8	%

Three and ~~Six~~Nine Months Ended ~~June~~September 30, 2023 and 2022

Revenues


	Three Months Ended						Absolute			Percentage			Three Months Ended						Absolute			Percentage
	June 30,						Increase			Increase			September 30,						Increase			Increase
	2023			2022			(Decrease)			(Decrease)			2023			2022			(Decrease)			(Decrease)
	(dollars in millions)												(dollars in millions)
Total revenues	$	135.6		$	148.2		$	(12.7	)		(9	%)	$	113.4		$	127.7		$	(14.2	)		(11	%)
Research revenues	$	87.7		$	89.4		$	(1.7	)		(2	%)	$	80.6		$	87.0		$	(6.4	)		(7	%)
Consulting revenues	$	30.0		$	39.3		$	(9.3	)		(24	%)	$	28.2		$	37.4		$	(9.1	)		(24	%)
Events revenues	$	17.9		$	19.5		$	(1.6	)		(8	%)	$	4.6		$	3.3		$	1.3			41	%
Revenues attributable to customers outside of the U.S.	$	28.0		$	29.8		$	(1.8	)		(6	%)	$	25.8		$	25.5		$	0.3			1	%
Percentage of revenue attributable to customers outside of the U.S.		21	%		20	%	1 point				—			23	%		20	%	3 points


	Six Months Ended						Absolute			Percentage			Nine Months Ended						Absolute			Percentage
	June 30,						Increase			Increase			September 30,						Increase			Increase
	2023			2022			(Decrease)			(Decrease)			2023			2022			(Decrease)			(Decrease)
	(dollars in millions)												(dollars in millions)
Total revenues	$	249.3		$	273.2		$	(24.0	)		(9	%)	$	362.7		$	400.9		$	(38.2	)		(10	%)
Research revenues	$	168.6		$	175.2		$	(6.6	)		(4	%)	$	249.2		$	262.3		$	(13.1	)		(5	%)
Consulting revenues	$	61.7		$	77.7		$	(16.0	)		(21	%)	$	90.0		$	115.1		$	(25.1	)		(22	%)
Events revenues	$	18.9		$	20.3		$	(1.4	)		(7	%)	$	23.5		$	23.6			—			(—	%)
Revenues attributable to customers outside of the U.S.	$	53.2		$	57.3		$	(4.1	)		(7	%)	$	79.0		$	82.9		$	(3.9	)		(5	%)
Percentage of revenue attributable to customers outside of the U.S.		21	%		21	%		—			—			22	%		21	%	1 point

2324

Total revenues decreased 9%11% and 10% during ~~both~~ the three and ~~six~~nine months ended ~~June~~September 30, 2023, respectively, compared to the prior year periods, and ~~decreased by 8% for the six months ended June 30, 2023 when excluding the effect of changes in foreign currencies. Revenues~~revenues from customers outside the U.S. increased 1% and decreased ~~6% and 7%~~5% during the three and ~~six~~nine months ended ~~June~~September 30, 2023, ~~respectively, and decreased by approximately 5% for the six months ended June 30, 2023 when excluding the effect of changes in foreign currencies.~~respectively.

Research revenues are recognized primarily on a ratable basis over the term of the contracts, which are generally 12 or 24-month periods. Research revenues decreased 2%7% and 4%5% during the three and ~~six~~nine months ended ~~June~~September 30, 2023, respectively, compared to the prior year ~~periods, and decreased by 3% for the six months ended June 30, 2023 when excluding the effect of changes in foreign currencies.~~periods. The decrease in revenues during the ~~periods~~three months ended September 30, 2023 was primarily due to ~~flat CV growth, with revenue from subscription research products growing 2% during each of the periods, which was offset by~~ a decline in revenue from our reprint product and our other smaller and discontinued products coupled with a decline in revenue from our subscription research products of 1%. The decrease in revenues during ~~both periods.~~the nine months ended September 30, 2023 was primarily due to a decline in revenue from our reprint product and our other smaller and discontinued products, which was partially offset by revenue from our subscription research products growing 1%.

Consulting revenues decreased 24% and ~~21%~~22% during the three and ~~six~~nine months ended ~~June~~September 30, 2023, respectively, compared to the prior year ~~periods, and decreased by 20% for the six months ended June 30, 2023 when excluding the effect of changes in foreign currencies.~~periods. The decrease in revenues during the three and ~~six~~nine months ended ~~June~~September 30, 2023 was due to 1) a decrease in delivery of both advisory and consulting services ~~by our research analysts~~ due ~~primarily~~ to lower client bookings ~~for these services and 2) a decrease in delivery of consulting services by our consulting organization~~ due to 1) the macroeconomic environment and 2) based on our continued focus on contract value products, we have enacted a policy of only selling consulting to contract value clients, except in limited circumstances.

Events revenues ~~decreased 8%~~increased 41% and 7%were flat during the three and ~~six~~nine months ended ~~June~~September 30, 2023, respectively, compared to the prior year ~~periods, and decreased by 6% for the six months ended June 30, 2023 when excluding the effect of changes in foreign currencies.~~periods. The ~~decrease~~increase in revenues during the three ~~and six~~ months ended ~~June~~September 30, 2023 was due to ~~a decrease~~an increase in ~~sponsorship revenues and a decrease~~the number of events held in the current period, as one event ~~ticket revenue due~~that was held in the fourth quarter of 2022 took place in the third quarter of 2023. Accordingly, during the fourth quarter of 2023, we will hold one less event as compared to ~~lower attendance.~~the fourth quarter of 2022.

Refer to the “Segments Results” section below for a discussion of revenues and expenses by segment.

Cost of Services and Fulfillment


	Three Months Ended						Absolute			Percentage			Three Months Ended						Absolute			Percentage
	June 30,						Increase			Increase			September 30,						Increase			Increase
	2023			2022			(Decrease)			(Decrease)			2023			2022			(Decrease)			(Decrease)
Cost of services and fulfillment (dollars in millions)	$	54.6		$	61.0		$	(6.4	)		(10	%)	$	48.0		$	52.7		$	(4.7	)		(9	%)
Cost of services and fulfillment as a percentage of total revenues		40	%		41	%	(1) point				—			42	%		41	%	1 point
Service and fulfillment employees (at end of period)		812			879			(67	)		(8	%)		790			908			(118	)		(13	%)


	Six Months Ended						Absolute			Percentage			Nine Months Ended						Absolute			Percentage
	June 30,						Increase			Increase			September 30,						Increase			Increase
	2023			2022			(Decrease)			(Decrease)			2023			2022			(Decrease)			(Decrease)
Cost of services and fulfillment (dollars in millions)	$	103.9		$	114.2		$	(10.3	)		(9	%)	$	151.9		$	167.0		$	(15.1	)		(9	%)
Cost of services and fulfillment as a percentage of total revenues		42	%		42	%		—			—			42	%		42	%		—

Cost of services and fulfillment expenses decreased ~~10%~~9% during the three months ended ~~June~~September 30, 2023 compared to the prior year period. The decrease was primarily due to (1) a ~~$3.8~~$3.4 million decrease in professional services costs primarily due to a decrease in contractor costs, outsourced expenses, and consulting fees and (2) a $1.7 million decrease in compensation and benefit costs due to a decrease in headcount. These decreases were partially offset by a $0.8 million increase in event expenses primarily due to an increase in the number of events held during the current quarter.

Cost of service and fulfillment expenses decreased 9% during the nine months ended September 30, 2023 compared to the prior year period. The decrease was primarily due to (1) a $7.9 million decrease in professional services costs primarily due to a decrease in contractor costs, outsourced expenses, and consulting fees, (2) a $6.5 million decrease in compensation and benefit costs due to a decrease in headcount, incentive bonus costs, and benefit costs (due to the introduction of the flexible vacation and personal paid time off policy in the United States), and (3) a $1.2 million decrease in facilities costs due to a decrease in straight-line lease expense and variable lease expense. These decreases were partially offset by a $0.6 million increase in event expenses primarily due to an increase in the number of events in the current period.

Selling and Marketing


	Three Months Ended						Absolute			Percentage
	September 30,						Increase			Increase
	2023			2022			(Decrease)			(Decrease)
Selling and marketing expenses (dollars in millions)	$	40.0		$	44.2		$	(4.3	)		(10	%)
Selling and marketing expenses as a percentage of total revenues		35	%		35	%		—
Selling and marketing employees (at end of period)		680			796			(116	)		(15	%)


	Nine Months Ended						Absolute			Percentage
	September 30,						Increase			Increase
	2023			2022			(Decrease)			(Decrease)
Selling and marketing expenses (dollars in millions)	$	123.1		$	133.2		$	(10.2	)		(8	%)
Selling and marketing expenses as a percentage of total revenues		34	%		33	%	1 point

Selling and marketing expenses decreased 10% during the three months ended September 30, 2023 compared to the prior year period. The decrease was primarily due to (1) a $3.3 million decrease in compensation and benefit costs due to a decrease in commissions expense and headcount and (2) a ~~$1.8~~$0.4 million decrease in software costs.

Selling and marketing expenses decreased 8% during the nine months ended September 30, 2023 compared to the prior year period. The decrease was primarily due to (1) a $8.0 million decrease in compensation and benefit costs due a decrease in commissions expense, headcount, incentive bonus costs, and benefit costs (due to the introduction of the flexible vacation and personal paid time off policy in the United States), (2) a $1.0 million decrease in facilities costs due to a decrease in straight-line lease expense and variable lease expense, (3) a $0.6 million decrease in professional services costs primarily due to a decrease in ~~contractor costs, outsourced expenses, and~~ consulting fees, ~~partially offset by an increase in survey costs,~~ and ~~(3)~~(4) a ~~$0.5~~$0.6 million decrease in ~~facilities costs primarily due to a decrease in straight-line~~travel and ~~variable lease expense.~~entertainment expenses.

~~Cost of service~~General and ~~fulfillment~~Administrative


	Three Months Ended						Absolute			Percentage
	September 30,						Increase			Increase
	2023			2022			(Decrease)			(Decrease)
General and administrative expenses (dollars in millions)	$	15.1		$	16.4		$	(1.3	)		(8	%)
General and administrative expenses as a percentage of total revenues		13	%		13	%		—
General and administrative employees (at end of period)		280			300			(20	)		(7	%)


	Nine Months Ended						Absolute		Percentage
	September 30,						Increase		Increase
	2023			2022			(Decrease)		(Decrease)
General and administrative expenses (dollars in millions)	$	51.7		$	47.9		$	3.8		8	%
General and administrative expenses as a percentage of total revenues		14	%		12	%	2 points

General and administrative expenses decreased 9%8% during the ~~six~~three months ended ~~June~~September 30, 2023 compared to the prior year ~~period, and decreased by 8% when excluding the effect of changes in foreign currencies.~~period. The decrease was primarily due to ~~(1)~~ a ~~$4.8~~$0.9 million decrease in compensation and benefit costs due to a decrease in ~~both~~headcount.

General and administrative expenses increased 8% during the nine months ended September 30, 2023 compared to the prior year period. The increase was primarily due to (1) a $5.3 million increase in legal costs, due primarily to a $4.8 million provision for a preliminary legal settlement for a wage-related matter and related legal services, and (2) a $0.7 million increase in software costs. These increases were partially offset by a $1.3 million decrease in compensation and benefit costs due a decrease in incentive bonus costs and benefit costs (due to the introduction of the flexible vacation and personal paid time off policy in the United States), which were partially offset by an increase in salary costs due to an increase in average headcount, (2) a $4.5 million decrease in professional services costs primarily due to a decrease in contractor costs, outsourced expenses, and consulting fees, and (3) a $1.1 million decrease in facilities costs due to a decrease in straight-line and variable lease expense.headcount.

~~Selling and Marketing~~

Three Months Ended

Absolute

Percentage

June 30,

Increase

Increase

2023

2022

(Decrease)

(Decrease)

Selling and marketing expenses (dollars in millions)

$
41.6

$
45.0

$
(3.4
)

(8
%)
Selling and marketing expenses as a percentage of
total revenues

31
%

30
%

1 point

—

Selling and marketing employees (at end of period)

700

780

(80
)

(10
%)

Six Months Ended

Absolute

Percentage

June 30,

Increase

Increase

2023

2022

(Decrease)

(Decrease)

Selling and marketing expenses (dollars in millions)

$
83.1

$
89.0

$
(5.9
)

(7
%)
Selling and marketing expenses as a percentage of
total revenues

33
%

33
%

—

—

Selling and marketing expenses decreased 8% during the three months ended June 30, 2023 compared to the prior year period, and decreased by 7% when excluding the effect of changes in foreign currencies. The decrease was primarily due to a $3.1 million decrease in compensation and benefit costs due to a decrease in commissions expense, headcount, incentive bonus costs, and benefit costs and (2) a $0.4 million decrease in facilities costs primarily due to a decrease in straight-line and variable lease expense.

Selling and marketing expenses decreased 7% during the six months ended June 30, 2023 compared to the prior year period, and decreased by 6% when excluding the effect of changes in foreign currencies. The decrease was primarily due to (1) a $4.7 million decrease in compensation and benefit costs due a decrease in commissions expense, incentive bonus costs, and benefit costs (due to the introduction of the flexible vacation and personal paid time off policy in the United States) and (2) a $1.0 million decrease in facilities costs due to a decrease in straight-line and variable lease expense.

~~General and Administrative~~

Three Months Ended

Absolute

Percentage

June 30,

Increase

Increase

2023

2022

(Decrease)

(Decrease)

General and administrative expenses (dollars in
   millions)

$
15.3

$
15.9

$
(0.6
)

(4
%)
General and administrative expenses as a percentage
   of total revenues

11
%

11
%

—

—

General and administrative employees (at end of
   period)

281

286

(5
)

(2
%)

Six Months Ended

Absolute

Percentage

June 30,

Increase

Increase

2023

2022

(Decrease)

(Decrease)

General and administrative expenses (dollars in
millions)

$
36.5

$
31.4

$
5.1

16
%
General and administrative expenses as a percentage
of total revenues

15
%

12
%

3 points

—

General and administrative expenses decreased 4% during the three months ended June 30, 2023 compared to the prior year period. The decrease was primarily due to a $0.7 million decrease in compensation and benefit costs due to a decrease in incentive bonus and benefit costs, partially offset by an increase in salaries due to an increase in average headcount.

General and administrative expenses increased 16% during the six months ended June 30, 2023 compared to the prior year period, and increased by 17% when excluding the effect of changes in foreign currencies. The increase was primarily due to a $5.7 million increase in legal costs, due primarily to a $4.8 million provision for a preliminary legal settlement for a wage-related matter and related legal services.

2526

Depreciation

~~Depreciation~~The fluctuation for depreciation expense was ~~consistent~~immaterial during the three and ~~six~~nine months ended ~~June~~September 30, 2023 compared to the prior year periods.

Amortization of Intangible Assets

Amortization expense decreased by $0.3 million and ~~$0.6~~$0.9 million during the three and ~~six~~nine months ended ~~June~~September 30, 2023, respectively, compared to the prior year periods due to a decrease in the amortization of a trademark intangible asset.

Restructuring and Related Costs

In January 2023, we implemented a reduction in our workforce of approximately 4% ~~of our employees~~ across various geographies and functions to streamline operations. We recorded $4.3 million of severance and related costs for this action during the fourth quarter of 2022, and $0.6 million during the first quarter of 2023. We recorded a restructuring charge of $5.0 million during the fourth quarter of 2022 related to closing one floor of our offices in California, of which $3.7 million related to an impairment of a right-of-use asset and $1.3 million related to an impairment of leasehold improvements. During the first quarter of 2023, we recorded an incremental $0.4 million impairment to our California office. We also recorded a $0.6 million charge during the first quarter of 2023 for the write-off of a previously capitalized software project. We expect all of the severance and related costs for this plan to be paid during 2023.

In May 2023, we implemented a reduction in our workforce of approximately 8% ~~of our workforce~~ across various geographies and functions to better align our cost structure with our revised revenue outlook for the year, and to streamline our sales and consulting organizations to more efficiently go to market in support of driving contract value growth in the future. We recorded $7.5 million of severance and related costs for this action during the second quarter of 2023. In addition, we closed certain of our smaller offices both inside and outside the U.S. in order to reduce facility costs and better match our facilities to our hybrid work strategy. As a result of closing the offices, we recorded restructuring costs of $2.3 million, which included $1.3 million related to right-of-use asset impairments and accelerated amortization and $0.6 million related to impairments of leasehold improvements. We also incurred $0.7 million in contract termination costs. We expect the majority of the ~~accrued restructuring~~severance and related costs ~~as of June 30, 2023~~for this plan to be ~~fully~~ paid ~~by the end of~~during 2023.

Interest Expense

Interest expense consists of interest on our borrowings and in 2022 also included realized gains and losses on the related interest rate swap. Interest expense increased by $0.2 million and ~~$0.4~~$0.6 million during the three and ~~six~~nine months ended ~~June~~September 30, 2023, respectively, compared to the prior year periods due to an increase in the annualized interest rate on our ~~borrowing~~borrowings, which was partially offset by lower average outstanding borrowings.

Other Income, ~~(Expense),~~ Net

Other income, ~~(expense),~~ net primarily consists of interest income, gains and losses on foreign currency, and gains and losses on foreign currency forward ~~contracts, and interest income.~~contracts. Other income, ~~(expense),~~ net increased ~~$0.4~~$0.2 million and ~~$1.2~~$1.4 million during the three and ~~six~~nine months ended ~~June~~September 30, 2023, respectively, compared to the prior year periods primarily due to an increase in interest income.

Gain on Investments, Net

Gain on investments, net primarily represents our share of equity method investment gains and losses from our technology-related investment funds. ~~Gain~~The fluctuation for gain on investments, net ~~decreased $0.4 million~~was immaterial during the ~~six~~three and nine months ended ~~June~~September 30, 2023 compared to the prior year ~~period. The decrease was due to a decrease in investment gains generated by the underlying funds.~~periods.

Income Tax Expense


	Three Months Ended						Absolute			Percentage			Three Months Ended						Absolute			Percentage
	June 30,						Increase			Increase			September 30,						Increase			Increase
	2023			2022			(Decrease)			(Decrease)			2023			2022			(Decrease)			(Decrease)
Provision for income taxes (dollars in millions)	$	2.8		$	6.4		$	(3.6	)		(57	%)	$	2.4		$	2.9		$	(0.5	)		(18	%)
Effective tax rate		34	%		32	%	2 points				—			49	%		35	%	14 points

Six Months Ended

Absolute

Percentage

June 30,

Increase

Increase

2023

2022

(Decrease)

(Decrease)

Provision for income taxes (dollars in millions)

$
1.5

$
8.3

$
(6.8
)

(82
%)
Effective tax rate

54
%

31
%

23 points

—


	Nine Months Ended						Absolute			Percentage
	September 30,						Increase			Increase
	2023			2022			(Decrease)			(Decrease)
Provision for income taxes (dollars in millions)	$	3.8		$	11.2		$	(7.3	)		(66	%)
Effective tax rate		51	%		32	%	19 points

Income tax expense decreased by ~~$6.8~~$7.3 million during the ~~six~~nine months ended ~~June~~September 30, 2023 compared to the prior year period primarily due to the decrease in income from operations. The increase in the effective tax rate during the 2023 period was

primarily due to tax expense related to the settlement of share-based awards in 2023. For the full year 2023, we anticipate that our effective tax rate will be approximately ~~43%~~50%.

Segment Results

We operate in three segments: Research, Consulting, and Events. These segments, which are also our reportable segments, are based on our management structure and how management uses financial information to evaluate performance and determine how to allocate resources. Our products and services are delivered through each segment as described below.

The Research segment includes the revenues from all of our research products as well as consulting revenues from advisory services (such as speeches and advisory days) delivered by our research organization. Research segment costs include the cost of the organizations responsible for developing and delivering these products in addition to the cost of the product management organization that is responsible for product pricing and packaging and the launch of new products.

The Consulting segment includes the revenues and the related costs of our project consulting organization. The project consulting organization delivers a majority of our project consulting revenue and certain advisory services.

The Events segment includes the revenues and the costs of the organization responsible for developing and hosting in-person and virtual events.

We evaluate reportable segment performance and allocate resources based on segment revenues and expenses. Segment expenses include the direct expenses of each segment organization and exclude selling and marketing expenses, general and administrative expenses, stock-based compensation expense, depreciation expense, adjustments to incentive bonus compensation from target amounts, amortization of intangible assets, restructuring and related costs, interest ~~and~~expense, other income, ~~(expense),~~ and gains on investments. The accounting policies used by the segments are the same as those used in the consolidated financial statements.


	Research Segment			Consulting Segment			Events Segment			Consolidated			Research Segment			Consulting Segment			Events Segment			Consolidated
	(dollars in thousands)												(dollars in thousands)
Three Months Ended June 30, 2023
Three Months Ended September 30, 2023
Research revenues	$	87,699		$	—		$	—		$	87,699		$	80,606		$	—		$	—		$	80,606
Consulting revenues		7,003			22,967			—			29,970			6,517			21,720			—			28,237
Events revenues		—			—			17,920			17,920			—			—			4,588			4,588
Total segment revenues		94,702			22,967			17,920			135,589			87,123			21,720			4,588			113,431
Segment expenses		(32,536	)		(11,429	)		(10,524	)		(54,489	)		(31,749	)		(10,739	)		(4,031	)		(46,519	)
Year over year revenue change		(6	%)		(19	%)		(8	%)		(9	%)		(9	%)		(23	%)		41	%		(11	%)
Year over year expense change		(1	%)		(19	%)		(5	%)		(6	%)		(4	%)		(27	%)		19	%		(9	%)


	Research Segment			Consulting Segment			Events Segment			Consolidated			Research Segment			Consulting Segment			Events Segment			Consolidated
	(dollars in thousands)												(dollars in thousands)
Three Months Ended June 30, 2022
Three Months Ended September 30, 2022
Research revenues	$	89,447		$	—		$	—		$	89,447		$	87,038		$	—		$	—		$	87,038
Consulting revenues		10,921			28,341			—			39,262			9,015			28,367			—			37,382
Events revenues		—			—			19,537			19,537			—			—			3,259			3,259
Total segment revenues		100,368			28,341			19,537			148,246			96,053			28,367			3,259			127,679
Segment expenses		(32,897	)		(14,059	)		(11,051	)		(58,007	)		(33,058	)		(14,747	)		(3,377	)		(51,182	)


	Research Segment			Consulting Segment			Events Segment			Consolidated			Research Segment			Consulting Segment			Events Segment			Consolidated
	(dollars in thousands)												(dollars in thousands)
Six Months Ended June 30, 2023
Nine Months Ended September 30, 2023
Research revenues	$	168,605		$	—		$	—		$	168,605		$	249,211		$	—		$	—		$	249,211
Consulting revenues		14,922			46,798			—			61,720			21,439			68,518			—			89,957
Events revenues		—			—			18,934			18,934			—			—			23,522			23,522
Total segment revenues		183,527			46,798			18,934			249,259			270,650			68,518			23,522			362,690
Segment expenses		(68,043	)		(23,782	)		(12,155	)		(103,980	)		(99,792	)		(34,521	)		(16,186	)		(150,499	)
Year over year revenue change		(7	%)		(16	%)		(7	%)		(9	%)		(8	%)		(18	%)		(—	%)		(10	%)
Year over year expense change		1	%		(16	%)		(5	%)		(4	%)		(—	%)		(20	%)		(—	%)		(6	%)

2728


	Research Segment			Consulting Segment			Events Segment			Consolidated			Research Segment			Consulting Segment			Events Segment			Consolidated
	(dollars in thousands)												(dollars in thousands)
Six Months Ended June 30, 2022
Nine Months Ended September 30, 2022
Research revenues	$	175,227		$	—		$	—		$	175,227		$	262,265		$	—		$	—		$	262,265
Consulting revenues		22,111			55,582			—			77,693			31,126			83,949			—			115,075
Events revenues		—			—			20,297			20,297			—			—			23,556			23,556
Total segment revenues		197,338			55,582			20,297			273,217			293,391			83,949			23,556			400,896
Segment expenses		(67,077	)		(28,376	)		(12,802	)		(108,255	)		(100,135	)		(43,123	)		(16,179	)		(159,437	)

Research segment revenues decreased 6%9% and 7%8% during the three and ~~six~~nine months ended ~~June~~September 30, 2023, respectively, compared to the prior year periods. For the three and ~~six~~nine months ended ~~June~~September 30, 2023, research product revenues within this segment decreased 2%7% and 4%5%, ~~respectively, which~~respectively. The decrease in revenues during the three months ended September 30, 2023 was primarily due to ~~flat CV growth, with revenue from our subscription research products growing 2% for both periods, offset by~~ a decline in revenue from our reprint product and our other smaller and discontinued products coupled with a decline in revenue from our subscription research products of 1%. The decrease in revenues during the ~~periods.~~nine months ended September 30, 2023 was primarily due to a decline in revenue from our reprint product and our other smaller and discontinued products, which was partially offset by revenue from our subscription research products growing 1%. For the three and ~~six~~nine months ended ~~June~~September 30, 2023, consulting product revenues within this segment decreased ~~36%~~28% and ~~33%~~31%, respectively, primarily due to decreased delivery of consulting and advisory services by our research analysts due primarily to lower client bookings for these services.

Research segment expenses decreased ~~1% and increased 1%~~4% during the three ~~and six~~ months ended ~~June~~September 30, 2023, ~~respectively,~~ compared to the prior year ~~periods.~~period, and for the nine months ended September 30, 2023, expenses were consistent with the prior year period. The decrease in expenses during the three months ended ~~June~~September 30, 2023 was primarily due to (1) a $0.6 million decrease in compensation and benefit costs primarily due to a decrease in headcount and benefit costs. The increase in expenses during the six months ended June 30, 2023 was primarily due to (1) a $1.7 million increase in compensation and benefit costs primarily due to an increase in average headcount, partially offset by (2) a ~~$1.0~~$0.6 million decrease in professional services primarily due to a decrease in contractor costs and consulting fees.

Consulting segment revenues decreased ~~19%~~23% and ~~16%~~18% during the three and ~~six~~nine months ended ~~June~~September 30, 2023, respectively, compared to the prior year periods. The decrease in revenues during the three and ~~six~~nine months ended ~~June~~September 30, 2023 was primarily due to a decrease in delivery of consulting services due to lower client bookings due to 1) the macroeconomic environment and 2) based on our continued focus on contract value products, we have enacted a policy of only selling consulting to contract value clients, except in limited circumstances.

Consulting segment expenses decreased ~~19%~~27% and ~~16%~~20% during the three and ~~six~~nine months ended ~~June~~September 30, 2023, respectively, compared to the prior year periods. The decrease in expenses during the three months ended ~~June~~September 30, 2023 was primarily due to (1) a ~~$1.2~~$2.0 million decrease in professional services primarily due to a decrease in contractor costs and consulting fees, (2) a ~~$0.7 million decrease in outsourced expenses, and (3) a $0.7~~$1.2 million decrease in compensation and benefit costs primarily due to a decrease in headcount, and ~~benefit costs.~~(3) a $0.8 million decrease in outsourced expenses. The decrease in expenses during the ~~six~~nine months ended ~~June~~September 30, 2023 was primarily due to (1) a ~~2.5~~$4.5 million decrease in professional services primarily due to a decrease in contractor costs and consulting fees, (2) a ~~$1.3~~$2.0 million decrease in outsourced expenses, and (3) a ~~$0.8~~$1.9 million decrease in compensation and benefit costs primarily due to a decrease in headcount and benefit costs.

Event segment revenues ~~decreased 8% and 7%~~increased 41% during the three ~~and six~~ months ended ~~June~~September 30, 2023, ~~respectively,~~ compared to the prior year ~~periods. The decrease in revenues was due to a decrease in sponsorship revenues~~period, and ~~a decrease in event ticket revenue due to lower attendance.~~

~~Event segment expenses decreased 5%~~ for ~~both~~ the ~~three and six~~nine months ended ~~June~~September 30, 2023, ~~respectively, compared to~~revenues were consistent with the prior ~~year periods.~~period. The ~~decrease~~increase in ~~expenses~~revenues during the three ~~and six~~ months ended ~~June~~September 30, 2023 was primarily due to ~~a decrease~~an increase in ~~compensation~~the number of events held in the current period, as one event that was held in the fourth quarter of 2022 took place in the third quarter of 2023. Accordingly, during the fourth quarter of 2023, we will hold one less event as compared to the fourth quarter of 2022.

Event segment expenses increased 19% during the three months ended September 30, 2023, compared to the prior year period, and ~~benefit costs.~~for the nine months ended September 30, 2023, expenses were consistent with the prior period. The increase in expenses during the three months ended September 30, 2023 was primarily due to an increase in the number of events in the current period.

Liquidity and Capital Resources

The amounts reported in our earnings release and Form 8-K filed on July 27, 2023 for net cash provided by operating activities and purchases of property and equipment of $15.4 million and $(2.3) million, respectively, have been adjusted in this Form 10-Q to $15.8 million and $(2.7) million, respectively.

We have historically financed our operations primarily through funds generated from operations. Research revenues, which constituted approximately ~~68%~~69% of our revenues during the ~~six~~nine months ended ~~June~~September 30, 2023, are generally renewable annually and are typically payable in advance. We generated cash from operating activities of ~~$15.8~~$9.8 million and ~~$34.8~~$37.8 million during the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, respectively. The ~~$19.0~~$28.0 million decrease in cash provided from operations for the ~~six~~nine months ended ~~June~~September 30, 2023 compared to the prior year period was primarily due to a ~~$16.8~~$19.7 million decrease in net income, the timing of certain benefit payments, and an increase in income tax payments.

During the ~~six~~nine months ended ~~June~~September 30, 2023, we generated cash from investing activities of ~~$3.4~~$6.3 million primarily from ~~$6.2~~$10.2 million in net maturities of marketable investments partially offset by ~~$2.7~~$3.9 million of purchases of property and equipment, primarily

consisting of computer software. During the ~~six~~nine months ended ~~June~~September 30, 2022, we used cash in investing activities of ~~$3.6~~$5.7 million primarily for ~~$2.7~~$4.2 million for purchases of property and equipment, primarily consisting of computer software and equipment, and ~~$1.1~~$1.7 million in net purchases of marketable investments.

We used ~~$15.2~~$18.2 million of cash from financing activities during the ~~six~~nine months ended ~~June~~September 30, 2023 primarily due to $15.0 million of discretionary repayments of our revolving credit facility, ~~$1.3~~$4.1 million for purchases of our common stock, and $2.6 million in taxes paid related to net share settlements of restricted stock units, ~~and $0.8 million for purchases of our common stock,~~ partially offset by ~~$1.8~~$3.5 million of net proceeds from the issuance of common stock under our stock-based incentive plans. We used ~~$38.3~~$38.8 million of cash in financing activities during the ~~six~~nine months ended ~~June~~September 30, 2022 primarily due to $25.0 million of discretionary repayments of our revolving credit facility and $15.1 million for purchases of our common stock, partially offset by ~~$2.1~~$1.3 million of net proceeds from the issuance of common stock under our stock-based incentive plans. As of ~~June~~September 30, 2023, our remaining stock repurchase authorization was approximately ~~$74.1~~$70.9 million.

The Company has a credit facility that provides up to $150.0 million of revolving credit commitments. The credit facility has a balance of $35.0 million at ~~June~~September 30, 2023 and matures in December of 2026. The credit facility permits the Company to increase the revolving credit commitments in an aggregate principal amount up to $50.0 million, subject to approval by the administrative agent and certain customary terms and conditions.

The credit facility contains certain customary restrictive loan covenants, including among others, financial covenants that apply a maximum leverage ratio, minimum interest coverage ratio, and maximum annual capital expenditures. The negative covenants limit, subject to various exceptions, our ability to incur additional indebtedness, create liens on assets, merge, consolidate, liquidate or dissolve any part of the company, sell assets, change fiscal year, or enter into certain transactions with affiliates and subsidiaries. We were in full compliance with the covenants as of ~~June~~September 30, 2023 and expect to continue to be in compliance through the next 12 months.

Additional future contractual cash obligations extending over the next 12 months and beyond primarily consist of operating lease payments. We lease office space under non-cancelable operating lease agreements (refer to Note 5 – Leases in the Notes to Consolidated Financial Statements for additional information). The remaining duration of non-cancelable office space leases ranges from less than 1 year to 8 years. As of ~~June~~September 30, 2023, remaining non-cancelable lease payments are due as follows: ~~$8.1~~$4.0 million in 2023, ~~$30.1~~$29.7 million within 2024 and 2025, $18.0 million within 2026 and 2027, and ~~$8.9~~$8.8 million beyond 2027.

In addition to the contractual cash commitments included above, we have other payables and liabilities that may be legally enforceable but are not considered contractual commitments.

As of ~~June~~September 30, 2023, we had cash, cash equivalents, and marketable investments of ~~$123.6~~$111.5 million. This balance includes ~~$90.8~~$73.6 million held outside of the U.S. If the cash outside of the U.S. is needed for operations in the U.S., we would be required to accrue and pay U.S. state taxes and may be required to pay withholding taxes to foreign jurisdictions to repatriate these funds. However, our intent is to permanently reinvest these funds outside of the U.S. and our current plans do not demonstrate a need to repatriate these funds for our U.S. operations. We believe that our current cash balance and cash flows from operations will satisfy working capital, financing activities, and capital expenditure requirements for the next twelve months and to meet our known long-term cash requirements.

Recent Accounting Pronouncements

Refer to Note 1 – Interim Consolidated Financial Statements in the Notes to Consolidated Financial Statements for a full description of recent accounting pronouncements including the expected dates of adoption and effects on results of operations and financial condition.

Critical Accounting Policies and Estimates

For information regarding our critical accounting policies and estimates, please refer to Note 1, "Summary of Significant Accounting Policies" and Item 7, “Critical Accounting Estimates” contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022. There have been no material changes to the critical accounting policies and estimates previously disclosed in that report.

2930

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in our assessment of our sensitivity to market risk since our presentation set forth in Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” in our Annual Report on Form 10-K for the year ended December 31, 2022.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as such term is defined under Securities Exchange Act Rule 13a-15(e), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures. In designing and evaluating the disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures as of ~~June~~September 30, 2023. Based upon their evaluation and subject to the foregoing, the principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective to provide reasonable assurance as of that date.

Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) of the Exchange Act) that occurred during the quarter ended ~~June~~September 30, 2023, which has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

3031

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The information set forth in the "Note 15 - Contingencies", in Part I, Item 1 of this Quarterly Report is incorporated herein by reference.

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this Form 10-Q, you should carefully consider the factors discussed in Part I, “Item 1A: Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022, which could materially affect our business, financial condition or future results. The risk factors described in our Annual Report on Form 10-K remain applicable to our business. The risks described in our Annual Report on Form 10-K are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Through ~~June~~September 30, 2023, our Board of Directors authorized an aggregate $585.0 million to purchase common stock under our stock repurchase program. During the quarter ended ~~June~~September 30, 2023, we purchased the following shares of our common stock under the stock repurchase program:

Maximum Approximate Dollar

Total Number of Shares

Value of Shares that May

Total Number of

Average Price

Purchased as Part of Publicly

Yet be Purchased

Shares Purchased

Paid per Share

Announced Plans or Programs

Under the Plans or Programs

Period

(#)

($)

(#)

(In thousands)

April 1 - April 30

—

$
—

—

$
74,966

May 1 - May 31

—

$
—

—

$
74,966

June 1 - June 30

27,500

$
29.82

27,500

$
74,146

Total for the quarter

27,500

27,500



							Maximum Approximate Dollar
					Total Number of Shares		Value of Shares that May
	Total Number of		Average Price		Purchased as Part of Publicly		Yet be Purchased
	Shares Purchased		Paid per Share		Announced Plans or Programs		Under the Plans or Programs
Period	(#)		($)		(#)		(In thousands)
July 1 - July 31		49,781	$	30.62		49,781	$	72,622
August 1 - August 31		50,000	$	31.63		50,000	$	71,041
September 1 - September 30		5,000	$	31.35		5,000	$	70,884
Total for the quarter		104,781				104,781

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

During the three months ended ~~June~~September 30, 2023, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

3132

ITEM 6. EXHIBITS


3.1		Restated Certificate of Incorporation of Forrester Research, Inc. (see Exhibit 3.1 to Registration Statement on Form S-1A filed on November 5, 1996)

3.2		Certificate of Amendment of the Certificate of Incorporation of Forrester Research, Inc. (see Exhibit 3.1 to Annual Report on Form 10-K for the year ended December 31, 1999)

3.3		Certificate of Amendment to Restated Certificate of Incorporation of Forrester Research, Inc.

3.4		Amended and Restated By-Laws of Forrester Research, Inc. (see Exhibit 3.4 to Annual Report on Form 10-K for the year ended December 31, 2022)

4.1		Specimen Certificate for shares of Common Stock, $.01 par value, of Forrester Research, Inc. (see Exhibit 4 to Registration Statement on Form S-1A filed on November 5, 1996)

31.1		Certification of the Principal Executive Officer. (filed herewith)

31.2		Certification of the Principal Financial Officer. (filed herewith)

32.1		Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (furnished herewith)

32.2		Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (furnished herewith)

101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. (filed herewith)

101.SCH		Inline XBRL Taxonomy Extension Schema Document. (filed herewith)

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document. (filed herewith)

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document. (filed herewith)

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document. (filed herewith)

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document. (filed herewith)

104		Cover Page Interactive Data File (embedded within the Inline XBRL Document). (filed herewith)

3233

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


FORRESTER RESEARCH, INC.

By:		/s/ L. CHRISTIAN FINN
		L. Christian Finn
		Chief Financial Officer (Principal financial officer)

Date: ~~August 9,~~November 8, 2023

3334


Delaware		04-2797789
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)
60 Acorn Park Drive Cambridge, Massachusetts		02140 (Zip Code)
(Address of principal executive offices)


Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, $.01 Par Value	FORR	Nasdaq Global Select Market


		Page
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	3
	Consolidated Balance Sheets as of ~~June~~September 30, 2023 and December 31, 2022	3
	Consolidated Statements of Operations for the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022	4
	Consolidated Statements of Comprehensive Income for the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022	5
	Consolidated Statements of Cash Flows for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022	6
	Notes to Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2122
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3031
Item 4.	Controls and Procedures	3031

PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	3132
Item 1A.	Risk Factors	3132
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3132
Item 3.	Defaults Upon Senior Securities	3132
Item 4.	Mine Safety Disclosures	3132
Item 5.	Other Information	3132
Item 6.	Exhibits	3233

SIGNATURES		3334


	June 30,			December 31,			September 30,			December 31,
	2023			2022			2023			2022
ASSETS
Current Assets:
Cash and cash equivalents	$	109,951		$	103,629		$	101,706		$	103,629
Marketable investments		13,664			19,688			9,750			19,688
Accounts receivable, net of allowance for expected credit losses of $578 and $560 as of June 30, 2023 and December 31, 2022, respectively		46,277			73,345
Accounts receivable, net of allowance for expected credit losses of $626 and $560 as of September 30, 2023 and December 31, 2022, respectively								41,016			73,345
Deferred commissions		18,260			24,559			16,558			24,559
Prepaid expenses and other current assets		22,069			14,069			15,855			14,069
Total current assets		210,221			235,290			184,885			235,290
Property and equipment, net		20,707			23,208			19,693			23,208
Operating lease right-of-use assets		44,649			49,970			42,021			49,970
Goodwill		243,287			242,149			242,061			242,149
Intangible assets, net		43,406			49,504			40,343			49,504
Other assets		8,404			8,317			7,053			8,317
Total assets	$	570,674		$	608,438		$	536,056		$	608,438
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable	$	1,137		$	361		$	762		$	361
Accrued expenses and other current liabilities		62,779			91,007			56,533			91,007
Deferred revenue		179,613			178,021			158,349			178,021
Total current liabilities		243,529			269,389			215,644			269,389
Long-term debt		35,000			50,000			35,000			50,000
Non-current operating lease liabilities		44,831			50,751			40,843			50,751
Other non-current liabilities		15,669			16,642			11,679			16,642
Total liabilities		339,029			386,782			303,166			386,782
Commitments and contingencies (Note 5, 15)
Stockholders' Equity:
Preferred stock, $0.01 par value
Authorized - 500 shares; issued and outstanding - none		—			—			—			—
Common stock, $0.01 par value
Authorized - 125,000 shares
Issued - 24,512 and 24,367 shares as of June 30, 2023 and December 31, 2022, respectively
Outstanding - 19,180 and 19,062 shares as of June 30, 2023 and December 31, 2022, respectively		245			244
Issued - 24,672 and 24,367 shares as of September 30, 2023 and December 31, 2022, respectively
Outstanding - 19,235 and 19,062 shares as of September 30, 2023 and December 31, 2022, respectively								247			244
Additional paid-in capital		269,371			261,766			273,797			261,766
Retained earnings		175,860			174,631			178,344			174,631
Treasury stock - 5,332 and 5,305 shares as of June 30, 2023 and December 31, 2022, respectively		(207,887	)		(207,067	)
Treasury stock - 5,437 and 5,305 shares as of September 30, 2023 and December 31, 2022, respectively								(211,149	)		(207,067	)
Accumulated other comprehensive loss		(5,944	)		(7,918	)		(8,349	)		(7,918	)
Total stockholders’ equity		231,645			221,656			232,890			221,656
Total liabilities and stockholders’ equity	$	570,674		$	608,438		$	536,056		$	608,438


	Six Months Ended						Nine Months Ended
	June 30,						September 30,
	2023			2022			2023			2022
Cash flows from operating activities:
Net income	$	1,229		$	18,022		$	3,713		$	23,436
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		4,295			4,618			6,557			6,992
Impairment of property and equipment		600			—			600			—
Amortization of intangible assets		6,134			6,716			9,175			10,068
Net gains from investments		—			(426	)		—			(426	)
Deferred income taxes		(1,479	)		(3,225	)		(4,106	)		(3,023	)
Stock-based compensation		7,025			7,131			11,169			11,036
Operating lease right-of-use assets amortization and impairments		6,691			5,384			9,089			8,138
Amortization of deferred financing fees		220			219			332			331
Amortization of (discount) premium on investments		(122	)		71			(168	)		48
Foreign currency losses		39			80
Foreign currency gains								(30	)		(167	)
Changes in assets and liabilities:
Accounts receivable		27,391			26,705			32,288			34,801
Deferred commissions		6,299			7,062			8,000			10,741
Prepaid expenses and other current assets		(7,122	)		(326	)		(1,002	)		2,185
Accounts payable		767			(734	)		403			262
Accrued expenses and other liabilities		(28,824	)		(30,680	)		(34,839	)		(30,801	)
Deferred revenue		(535	)		318			(20,809	)		(26,262	)
Operating lease liabilities		(6,820	)		(6,180	)		(10,581	)		(9,556	)
Net cash provided by operating activities		15,788			34,755			9,791			37,803
Cash flows from investing activities:
Purchases of property and equipment		(2,664	)		(2,698	)		(3,903	)		(4,227	)
Purchases of marketable investments		(964	)		(12,028	)		(964	)		(22,819	)
Proceeds from maturities of marketable investments		7,138			10,955			11,138			21,081
Other investing activity		(66	)		179			33			246
Net cash provided by (used in) investing activities		3,444			(3,592	)		6,304			(5,719	)
Cash flows from financing activities:
Payments on borrowings		(15,000	)		(25,000	)		(15,000	)		(25,000	)
Repurchases of common stock		(820	)		(15,112	)		(4,082	)		(15,112	)
Debt issuance costs								(25	)		—
Proceeds from issuance of common stock under employee equity incentive plans		1,840			2,077			3,485			4,298
Taxes paid related to net share settlements of stock-based compensation awards		(1,259	)		(255	)		(2,620	)		(2,975	)
Net cash used in financing activities		(15,239	)		(38,290	)		(18,242	)		(38,789	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		2,424			(5,645	)		242			(10,727	)
Net change in cash, cash equivalents and restricted cash		6,417			(12,772	)		(1,905	)		(17,432	)
Cash, cash equivalents and restricted cash, beginning of period		105,654			118,031			105,654			118,031
Cash, cash equivalents and restricted cash, end of period	$	112,071		$	105,259		$	103,749		$	100,599
Supplemental disclosure of cash flow information:
Cash paid for interest	$	1,302		$	938		$	1,944		$	1,456
Cash paid for income taxes	$	9,729		$	4,189		$	10,583		$	5,380


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934.


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934.


Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐


	Six Months Ended June 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Cash and cash equivalents	$	109,951	$	103,225	$	101,706	$	98,735
Restricted cash classified in other assets (1):		2,120		2,034		2,043		1,864
Cash, cash equivalents and restricted cash shown in statement of cash flows	$	112,071	$	105,259	$	103,749	$	100,599


	As of June 30, 2023
			Gross		Gross
	Amortized		Unrealized		Unrealized			Market
	Cost		Gains		Losses			Value
Corporate obligations	$	11,846	$	—	$	(162	)	$	11,684
Federal agency obligations		1,999		—		(19	)		1,980
Total	$	13,845	$	—	$	(181	)	$	13,664


	As of September 30, 2023
			Gross		Gross
	Amortized		Unrealized		Unrealized			Market
	Cost		Gains		Losses			Value
Corporate obligations	$	7,892	$	—	$	(126	)	$	7,766
Federal agency obligations		1,999		—		(15	)		1,984
Total	$	9,891	$	—	$	(141	)	$	9,750


	As of December 31, 2022
			Gross		Gross
	Amortized		Unrealized		Unrealized			Market
	Cost		Gains		Losses			Value
Corporate obligations	$	17,900	$	8	$	(205	)	$	17,703
Federal agency obligations		1,999		—		(14	)		1,985
Total	$	19,899	$	8	$	(219	)	$	19,688


	FY 2023		FY 2024		FY 2025		Total		FY 2023		FY 2024		FY 2025		Total
Corporate obligations	$	5,953	$	3,832	$	1,899	$	11,684	$	1,996	$	3,864	$	1,906	$	7,766
Federal agency obligations		—		1,980		—	$	1,980		—		1,984		—	$	1,984
Total	$	5,953	$	5,812	$	1,899	$	13,664	$	1,996	$	5,848	$	1,906	$	9,750


	As of June 30, 2023								As of September 30, 2023
	Less Than 12 Months				12 Months or Greater				Less Than 12 Months				12 Months or Greater
	Market		Unrealized		Market		Unrealized		Market		Unrealized		Market		Unrealized
	Value		Losses		Value		Losses		Value		Losses		Value		Losses
Corporate obligations	$	7,280	$	85	$	4,403	$	77	$	3,417	$	34	$	4,349	$	92
Federal agency obligations		1,980		19		—		—		1,984		15		—		—
Total	$	9,260	$	104	$	4,403	$	77	$	5,401	$	49	$	4,349	$	92


Balance at December 31, 2022	$	242,149
Translation adjustments		1,138
Balance at June 30, 2023	$	243,287


	June 30, 2023						September 30, 2023
	Gross				Net		Gross				Net
	Carrying		Accumulated		Carrying		Carrying		Accumulated		Carrying
	Amount		Amortization		Amount		Amount		Amortization		Amount
Amortizable intangible assets:
Customer relationships	$	77,798	$	38,032	$	39,766	$	77,776	$	40,125	$	37,651
Technology		16,303		14,992		1,311		16,241		15,328		913
Trademarks		12,486		10,157		2,329		12,477		10,698		1,779
Total	$	106,587	$	63,181	$	43,406	$	106,494	$	66,151	$	40,343


	December 31, 2022
	Gross				Net
	Carrying		Accumulated		Carrying
	Amount		Amortization		Amount
Amortizable intangible assets:
Customer relationships	$	77,786	$	33,805	$	43,981
Technology		16,803		14,696		2,107
Trademarks		12,472		9,056		3,416
Total	$	107,061	$	57,557	$	49,504


2023 (remainder)	$	5,817	$	2,772
2024		9,916		9,903
2025		8,876		8,872
2026		8,392		8,391
2027		8,324		8,324
Thereafter		2,081		2,081
Total	$	43,406	$	40,343


	Operating Lease			Sublease		Operating Lease			Sublease
	Payments			Cash Receipts		Payments			Cash Receipts
2023 (remainder)	$	8,133		$	307	$	4,009		$	153
2024		16,184			624		15,900			625
2025		13,920			—		13,816			—
2026		12,336			—		12,320			—
2027		5,713			—		5,659			—
Thereafter		8,913			—		8,764			—
Total lease payments and estimated sublease cash receipts		65,199		$	931		60,468		$	778
Less imputed interest		(6,225	)				(5,510	)
Present value of lease liabilities	$	58,974				$	54,958


Balance at December 31, 2022	$	242,149
Foreign currency translation adjustments		(88	)
Balance at September 30, 2023	$	242,061


Description:	June 30, 2023		December 31, 2022		September 30, 2023		December 31, 2022
Credit facility	$	35,000	$	50,000	$	35,000	$	50,000


	For the Three Months Ended June 30,						For the Three Months Ended September 30,
	2023			2022			2023			2022
Operating lease cost	$	3,240		$	3,600		$	3,068		$	3,546
Short-term lease cost		257			175			228			214
Variable lease cost		1,072			1,463			1,257			1,000
Sublease income		(130	)		(192	)		(130	)		(192	)
Total lease cost	$	4,439		$	5,046		$	4,423		$	4,568


	For the Six Months Ended June 30,						For the Nine Months Ended September 30,
	2023			2022			2023			2022
Operating lease cost	$	6,554		$	7,252		$	9,622		$	10,798
Short-term lease cost		518			312			747			526
Variable lease cost		1,857			3,013			3,113			4,013
Sublease income		(261	)		(383	)		(391	)		(575	)
Total lease cost	$	8,668		$	10,194		$	13,091		$	14,762


Operating lease ROU assets	$	44,649	$	42,021

Short-term operating lease liabilities (1)	$	14,143	$	14,115
Non-current operating lease liabilities		44,831		40,843
Total operating lease liabilities	$	58,974	$	54,958


Balance at December 31, 2022	$	560		$	560
Provision for expected credit losses		315			559
Write-offs		(297	)		(493	)
Balance at June 30, 2023	$	578
Balance at September 30, 2023				$	626


	As of June 30, 2023						As of September 30, 2023
	Level 1		Level 2		Total		Level 1		Level 2		Total
Assets:
Money market funds (1)	$	5,360	$	—	$	5,360	$	22,902	$	—	$	22,902
Marketable investments (2)		—		13,664		13,664		—		9,750		9,750
Total Assets	$	5,360	$	13,664	$	19,024	$	22,902	$	9,750	$	32,652


	Marketable			Translation						Marketable			Translation
	Investments			Adjustment			Total AOCL			Investments			Adjustment			Total AOCL
Balance at March 31, 2023	$	(126	)	$	(6,553	)	$	(6,679	)
Balance at June 30, 2023										$	(137	)	$	(5,807	)	$	(5,944	)
Foreign currency translation (1)		—			746			746			—			(2,435	)		(2,435	)
Unrealized loss, net of tax of $4		(11	)		—			(11	)
Balance at June 30, 2023	$	(137	)	$	(5,807	)	$	(5,944	)
Unrealized gain, net of tax of $(10)											30			—			30
Balance at September 30, 2023										$	(107	)	$	(8,242	)	$	(8,349	)


	Marketable			Interest Rate			Translation
	Investments			Swap			Adjustment			Total AOCL
Balance at March 31, 2022	$	(89	)	$	(16	)	$	(4,266	)	$	(4,371	)
Foreign currency translation (1)		—			—			(4,528	)		(4,528	)
Unrealized gain (loss) before reclassification, net of tax of $(1)		(29	)		32			—			3
Reclassification to income, net of tax of $(14) (2)		—			36			—			36
Balance at June 30, 2022	$	(118	)	$	52		$	(8,794	)	$	(8,860	)