Forrester Research, Inc. (FORR) Q2 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary indicates declining revenue across multiple sectors, lower operating margins, and a weak financial performance. Although there are efforts to improve the events business and positive trends in multiyear deals, the guidance for 2025 shows a revenue decline, and the Q&A reveals concerns about sales force conversion rates and sponsorship challenges. The lack of share repurchases and no clear guidance on improving sales conversions further contribute to a negative outlook, suggesting a likely stock price decline of -2% to -8% over the next two weeks.
Key Financial Performance
Total Revenue $111.7 million for Q2 2025, a decrease of 8% year-over-year. This decline was driven by mid-single-digit declines in research and consulting businesses and ongoing challenges in the events business.
Research Revenue $77.9 million for Q2 2025, down 7% year-over-year. Excluding the divestiture of FeedbackNow, research revenue declined by 5% year-over-year. The decline reflects ongoing budgetary and macroeconomic factors.
Consulting Revenue $23.4 million for Q2 2025, down 5% year-over-year. The consulting product line was flat, but advisory services were down compared to the prior year. This decline reflects federal government cost-cutting mandates targeting one-time consulting dollars.
Events Revenue $10.2 million for Q2 2025, a decrease of 23% year-over-year. Despite increased attendance and strong satisfaction scores, challenges with sponsorship revenues contributed to the decline.
Operating Income $13.7 million for Q2 2025, a decrease of 24% year-over-year. This was primarily driven by declining revenue in the quarter.
Net Income $9.8 million for Q2 2025, a decrease of 24% year-over-year. This decline was due to lower operating income and revenue.
Earnings Per Share (EPS) $0.51 for Q2 2025, a decrease of 25% year-over-year. This was driven by declining revenue and operating income.
Cash Flow from Operating Activities $23.1 million for the first half of 2025. No year-over-year comparison provided.
Client Retention 74% for Q2 2025, up 1 point quarter-over-quarter. This improvement reflects progress in sales organization and client engagement.
Wallet Retention 85% for Q2 2025, down 1 point quarter-over-quarter. This decline was driven by lower enrichment by existing clients.
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Operating Highlights
Izola AI Tool Enhancements: Izola can now draw answers from graphics, figures, and charts in research, and converse with findings in specific reports. Client usage increased by 22% and prompts by 44% quarter-over-quarter.
New Research Constructs: Introduced 'Buying Networks' for B2B marketing and 'Total Experience Score' for B2C, which combines brand and customer experience indices. These frameworks are gaining traction among clients.
Government Sector Growth: Secured significant contracts with U.S. state/local governments and European federal agencies, driven by competitive wins and interest in generative AI applications.
Sales Pipeline Growth: Sales pipeline increased by 15% from Q1 2025. Improvements in leadership, hiring, and performance management are driving progress.
Event Attendance and Satisfaction: CX Summits in North America and Europe saw 11% and 21% increases in attendance, respectively, with satisfaction scores at all-time highs.
Focus on Generative AI: Positioning as a leading AI research company with extensive coverage of AI and enhancements to Izola tool.
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Risk or Challenges
Economic Instability: Ongoing instability in the economy is affecting enterprise and vendor clients, leading to decreased CV and wallet retention, and an 8% decline in total revenue.
Revenue Decline: Total revenue decreased by 8%, with mid-single-digit declines in research and consulting businesses and a 23% decline in the events business.
Events Business Challenges: The events business underperformed expectations, with sponsorship revenues and overall performance declining, despite increased attendance and satisfaction scores.
Consulting Business Headwinds: Consulting revenues decreased by 5%, with anticipated further headwinds in the second half of the year due to shifts in U.S. government spending and macroeconomic factors.
Sales Organization Performance: Challenges in upscaling the sales organization, including the need to address low-performing sales reps and improve hiring processes, are impacting the ability to sell and renew Forrester Decisions.
Macroeconomic Factors: Budgetary constraints and macroeconomic uncertainties are leading to lower enrichment by existing clients and impacting wallet retention.
Federal Government Spending Cuts: Federal government cost-cutting mandates are reducing opportunities for consulting dollars, although research CV opportunities are expanding.
Profitability Pressures: Operating income and net income decreased by 24%, driven by declining revenue and lower operating margins.
Sponsorship Revenue Decline: Sponsorship revenues for events are declining, contributing to the underperformance of the events business.
Market Uncertainty: Continued tariff, geoeconomic, and political volatility are creating an uncertain outlook for the second half of the year.
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Guidance & Outlook
Economic Outlook for H2 2025: The company expects continued economic uncertainty in the second half of 2025, driven by tariff, geoeconomic, and political volatility. Despite these challenges, Forrester is maintaining its margin and EPS guidance for the full year.
Revenue Guidance for 2025: Forrester has tightened its revenue guidance for 2025 to a range of $400 million to $410 million, representing a 5% to 8% decline compared to 2024. The reduction is attributed to lower expectations in consulting and events businesses, while the research business is expected to decline mid-single digits.
Operating Margin and EPS Guidance for 2025: Operating margins are expected to be in the range of 8% to 9% for 2025, with EPS projected between $1.20 and $1.35 for the full year.
Consulting and Events Business Outlook: The consulting business is expected to decline mid- to high-single digits, while the events business is projected to decline by approximately 20% for the year. Adjustments reflect challenges in sponsorship revenues and consulting demand.
Sales Pipeline Growth: The total sales pipeline has grown by 15% from Q1 2025, indicating potential for improved sales performance in the second half of the year.
Government Sector Opportunities: Forrester anticipates growth opportunities in the government sector, driven by competitive wins and interest in generative AI applications. This is expected to contribute to improved performance in the second half of 2025.
Generative AI Tool (Izola) Enhancements: Forrester continues to refine its generative AI tool, Izola, which has seen a 22% increase in client usage and a 44% rise in prompts quarter-over-quarter. Enhancements include the ability to analyze data from graphics and charts, as well as interact with specific report findings.
Research and Product Development: Forrester introduced two new research constructs: the 'buying networks' series for B2B marketing and the 'total experience score' for B2C personas. These frameworks are expected to drive client engagement and revenue growth.
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Shareholder Return Plan
Stock Repurchase Program: The company did not repurchase any shares in the quarter but has approximately $80 million of stock repurchase authorization intact. They plan on reinstating their stock repurchase program in the second half of the year.
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Key Q&A
Q:What initiatives can be taken to improve challenges in the events business and sponsorships?
A:Management is focusing on modernizing sponsorship offerings beyond traditional booth setups and upskilling sales teams to sell outcome-based experiences. Additionally, they are relocating events to more favorable locations, such as moving the CX event from London to Amsterdam, which has stimulated sponsorship interest.
Q:How are multiyear deals trending?
A:Multiyear deals are trending positively, with 22% of contracts now being 3-year agreements, an 8-point increase year-over-year. 72% of contract value dollars are in multiyear deals, and the sales organization is adopting this approach well.
Q:What is the current status of the sales force?
A:The sales force is still being built out, with growth headcount hiring planned for the back half of the year. 72-75% of the sales team has over 25 months of experience. Attrition is in line with expectations, and performance management has been strong over the past 18 months. The company is finding good quality candidates for open positions.
Q:What are the current thoughts on the sales pipeline and its performance in the quarter?
A:The sales pipeline increased by 15% quarter-over-quarter. The focus is on improving conversion rates rather than pipeline growth. Conversion challenges include keeping deals too long in the pipeline and not engaging economic buyers early enough. The average time to close a deal remains steady at 70 days.
Q:Was the decline in sales force size due to voluntary or involuntary turnover?
A:The decline was a mix of voluntary and involuntary turnover. Performance management has been a focus, leading to some employees leaving voluntarily or not meeting performance plans.
Q:What can be done to improve conversion rates in the sales pipeline?
A:Improving conversion rates involves engaging buyers earlier in the sales process, ensuring buyers are serious about purchasing, and setting clear commitments from both sides. The focus is on identifying buyers who are committed to the process and avoiding wasting time on deals unlikely to close.
Q:Review of Unclear Management Responses
A:Management avoided providing specific details on how they plan to address conversion rate challenges beyond general strategies like engaging buyers earlier and setting commitments. Additionally, there was no detailed explanation of how they plan to fully build out the sales force or address the challenges in sponsorships beyond relocating events and modernizing offerings.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
America Europe
BB
Bank
Chief Product
Decisions
Events
Head
Izola prompt
North America
Product Officer
QA
Summit North
ability research
analysis
attendance CX
attendee
brand
challenge event
chart
company experience
cost
customer experience
demand
experience adoption
experience score
factor
figure
margin
marketing
metric
network
rep
research AI
response
satisfaction score
seller
shift
tool Izola
FORR Transcript
Forrester Research, Inc. (FORR) Q1 2026 Earnings Call Transcript
Unknown5-6
The earnings call showed positive financial performance with increased revenue, operating margin, and net income. However, the lack of strategic updates and forward-looking statements suggesting potential risks creates uncertainty. The absence of new partnerships or guidance changes also limits the potential for a strong positive reaction. Therefore, the overall sentiment is neutral.
Forrester Research, Inc. (FORR) Q4 2025 Earnings Call Transcript
Unknown2-12
The earnings call summary indicates declining revenue and margins, particularly in consulting and events, despite some positive developments with AI Access. The Q&A reveals concerns about consulting exits and uncertainties in contract value growth. Although there is optimism for AI products, the overall financial outlook, including a significant EPS decline, suggests a negative sentiment. The lack of specific guidance and ongoing challenges in key business segments contribute to a negative rating, likely leading to a stock price decline in the near term.
Forrester Research, Inc. (FORR) Q3 2025 Earnings Call Transcript
Unknown10-30
The earnings call summary and Q&A highlight mixed signals. While net income and EPS saw significant increases, revenue declined in key areas like research and consulting, and guidance was weak. The Q&A revealed concerns about AI's impact and unclear management responses, but also noted improved conversion rates and potential in government sectors. The Carahsoft partnership offers promise, but results aren't immediate. Overall, the positives and negatives balance out, leading to a neutral sentiment for short-term stock price movement.
Forrester Research, Inc. (FORR) Q2 2025 Earnings Call Transcript
Unknown8-1
The earnings call summary indicates declining revenue across multiple sectors, lower operating margins, and a weak financial performance. Although there are efforts to improve the events business and positive trends in multiyear deals, the guidance for 2025 shows a revenue decline, and the Q&A reveals concerns about sales force conversion rates and sponsorship challenges. The lack of share repurchases and no clear guidance on improving sales conversions further contribute to a negative outlook, suggesting a likely stock price decline of -2% to -8% over the next two weeks.
FORR Slides
FORR Report
Frequently Asked Questions
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They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
