Good afternoon. Thank you for joining today's call. With me today are George Colony, Forrester's Chairman of the Board and CEO; Michael Morhardt, Forrester's Chief Sales Officer; and Mike Doyle, Forrester's Chief Financial Officer. George will open the call. Mike Morhardt will follow George to discuss sales. Mike Doyle will then follow Michael Morhardt to discuss our financials. We will then open the call to Q&A. A replay of this call will be available until March 10, 2017 and can be accessed by dialing 1-888-843-7419 or, internationally, 1-630-652-3042. Please reference the passcode 7344562#. Before we begin, I'd like to remind you that this call will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as expects, believes, anticipates, intends, plans, estimates or similar expressions are intended to identify these forward-looking statements. These statements are based on the Company's current plans and expectations and involve risks and uncertainties that could cause future activities and results of operations to be materially different from those set forth in forward-looking statements. Some of the important factors that could cause actual results to differ are discussed in our reports and filings with the Securities and Exchange Commission. The Company undertakes no obligation to update publicly any forward-looking statements whether as a result of new information, future events or otherwise. I will now hand the call over to George Colony.

Good afternoon and thank you for joining Forrester's Q4 and full-year 2016 conference call. I'm going to start off with a state-of-the-Company review. Michael Morhardt, our head of sales, will give details on the progress of our new selling model and finally Mike Doyle, our CFO, will give a financial review of the fourth quarter, the full year, as well as guidance for 2017. 2016 was the third year that the Company has been in its Age of the Customer strategy, working with business and technology leaders as they use customer obsession to drive growth. In a year that saw customer power extend to citizen power and produce Brexit and Donald Trump, it's clear that Forrester is riding a megatrend that will transform society, politics and business economics. Companies and other institutions must rebuild their technologies, cultures and structures and that is the work that Forrester now engages in. For those companies that are moving forward into this world, Forrester is becoming a trusted and critical partner. They are using us to, one, evaluate business technology vendors; two, increase their digital IQ; three, channel their capital flows; and four, measure and anticipate their customers. The strategy is not yet universally accepted. CIOs and their staffs have been slower than marketing and strategy executives to recognize the approaching challenges of the Age of the Customer and this has attenuated our relative renewal rates with those clients. We're revising our research to offer guidance to beginners, intermediates and expert companies and this will enable us to help executives that are moving at slower-than-typical paces and more on this below. So to sum up on strategy, good scores on, one, being ahead of the curve; two, hitting the business zeitgeist; three, differentiation; and four, delivered value. Lower scores on, one, residents with slower…

Thanks, George. In Q4, Forrester's sales organization continued to align our sales and service strategy with the significant market opportunity associated with the Age of the Customer. We had two goals going on into Q4 with regards to the selling model -- one, to segment our clients into two client segments, premier and core and, two, to design and test the two selling motions. As George mentioned, the Premier client segment are those clients that represent the ideal client profile and are most likely to purchase all of Forrester's products and services. The second client segment is the core client group. That represents clients that may want to buy one or two products from Forrester, like research or data. Our goal was to have 75% of these clients segmented by the end of Q4 and we achieved 84%. Our goal is to have all clients in North America segmented by Q3, with Europe and Asia-Pac close to follow in Q4. Our second goal was to finalize and test the new selling motion for our Premier clients. This requires the introduction of three new roles -- the client executive, the solution partner and the customer success manager. The client executive is focused on the overall account growth strategy. The solution partner helps architect and design solutions and the customer success manager will drive client engagement which ultimately drives client renewal rates. By creating these three distinct sales and service responsibilities, we plan to both increase retention rates and growth rates from existing accounts. As I mentioned in our last call, we ran a beta trial at the end of Q3 and through Q4 to flesh out any issues and also track the results. The results were outstanding. From a year-over-year perspective, we saw growth bookings increase 16%. Retention came in at…

Thanks very much, Mike. I'll now again my review of Forrester's financial performance for the fourth quarter 2016, including a look at our financial results, the balance sheet at December 31, our fourth quarter metrics and the outlook for the first quarter and full year of 2017. Please note that the income statement numbers I'm reporting are pro forma and exclude the following items -- stock-based compensation expense, amortization of intangibles, reorganization costs and net gains and losses from investments. Also for 2016, we continued to utilize an effective tax rate of 40% for pro forma purposes. For the fourth quarter of 2016, Forrester was at the upper end of our revenue guidance and exceeded pro forma operating margin and earnings-per-share guidance. Operating cash flow for the year was strong, up 29% year over year and year-end cash balances were $138 million, approximately $7.56 per share. Financially, we're well positioned as we begin 2017. AV growth was modest for the year, reflecting lower quota-carrying sales headcount year over year. This was a conscious decision we made in 2016 as we worked on an improved selling model. As Mike indicated, we were very happy with the results from our beta team and we plan to aggressively invest to build out our sales teams which is reflected in our guidance for 2017. Our revenue performance for the quarter reflects better-than-expected consulting and advisory revenue performance, aided by approximately $1 million of consulting revenue being delivered in the fourth quarter versus an expectation of Q1 of 2017. We've seen steady improvement in this area as 2016 progressed and as a result, we plan to expand our consulting organization in 2017. Expenses in the fourth quarter remained below targeted levels because of a higher amount of open positions in our sales organization and our…

[Operator Instructions]. We do have our first question. This question comes from Timothy McHugh from William Blair. Go ahead, Timothy. Your line is now open.

Thanks. I guess just first, I know you gave a lot of color there, but just to try and kind of pinpoint on it, I guess, do you feel like the environment changed or are these changes that you are making proving to be more disruptive than you thought? Or are they proving to be harder than you thought, I guess? What kind of changed in the fourth quarter as you guys kind of approached it?

This is Mike Doyle. Are you talking about the changes in the marketplace or in what we're doing with the selling model itself?

The result, the -- my math, I guess, is the implication new bookings were probably down a decent amount and growth slowed and so I'm trying to understand, I guess. That wasn't, I guess, the outlook I would've thought three months ago or six months ago.

I think that, as you know, it's -- the bookings story has been historically a feet on the street kind of phenomenon, so when you look at it and you look at AV on a constant-currency basis up three points, with sales headcount being down, I would say that that's probably, frankly, where we expected to shake out as we rolled into the year. We were probably off a little bit versus what we had hoped in the fourth quarter. And I think that that's just a function of a little bit of sales attrition, as well as open headcount that occurred in the second half of the year that, frankly, we hope to get ahead of, but I think the more we got into the selling model and as we revised our profiles and Mike can talk more to that, I think that we basically held up hiring so that we'd get the hiring piece right. It's really important in this new model as we build out headcount, we build to fit, so to speak. So, Mike can probably give you more color there. So it was, I would say, a temporal effect, sort of short term, that we think, frankly, was the right call.

From a headcount perspective, Tim, we made the decision last summer to move to Nashville. We finalized a lot of those decisions around leadership and location in Q4 and instead of hiring in some of the other geographies, those headcounts were focused on Nashville and so we moved those reps down to Nashville. We started ramping in -- we started the hiring process in Q4, brought a lot of those folks on in January and continued to ramp every single month. So, that's part of it. The folks in the field, as we mentioned, some of the profiles of the different roles have changed the hiring profile and so we wanted to make sure that we were bringing in the right level and in some cases it's a more senior individual, to make sure that it effectively reflected the beta results. And so, we stalled a little bit on some of the reps to make sure that we weren't bringing in folks that weren't going to work out in the model.

I would close just to say -- Tim, it's Mike Doyle again -- that we liked what we saw and I'm glad we waited. We liked what we saw in the beta. We liked -- I think we built out the profiles we want. Now we're frankly bullish which is why we're getting aggressive in terms of our hiring, both in sales and in consulting, to go after it. So, yes, I look at it as, sure, I would like AV in bookings to have been higher, but, again, I view this as sort of temporal and that it's going to -- you are going to see good follow-through as we get into the year and as we build out these teams. Even if their performance is 75% of the beta, the betas are dramatically better than what we're getting right now, so we're pretty happy with that.

Okay. And then, just it seems the messaging here, I know you've always look at M&A, you are clearly -- the tone seems to be a stronger focus on that right now. Can you elaborate on why that is? Is it other moves by competitors? Is it a macro or is it just -- I guess, what would make you more aggressive at this point on that side?

I think that -- a couple things. One, clearly we still -- financing, we're in a great place to do it. I think the interest-rate environment, while it's changing, is still conducive to doing it. We could lever up for the right piece. I think you are aware of what's been happening in the marketplace, so there are some things that help us a little bit, gives us room to chase things. And I think we've had a good year of learning and refining about the strategy and I think George's direction also on M&A is much more targeted and I think we have a sense as to where we want to go chase it and I think -- that window, I think, exists for us over the next two to three years to pick up some interesting acquisitions that really will enhance what we're trying to do in this space. And I'll let George give more color.

Tim, it's not as if we were in neutral over the last three years. There was actually a lot of activity under the covers. But what's happened now is our cash is growing, our strategy is more clarified and the universe has really changed for us, given the strategic shift we've made over the last three years. So the pipeline we look at today is really very different than the pipeline we look at even a year and a half ago. So, I'd say more clarification there and a really interesting set of companies and a lot of them are in the $10 million to $20 million range, but also some larger companies. So I think it's just -- it's coming into focus now. That's why our effort is shifting that way. So we would like to do one deal a year. Of course, that's a very rough number, but that's our goal.

Our next question comes from Vincent Colicchio of Barrington Research. Go ahead, Vincent. Your line is now open.

George, I'm curious on the beta, how good of a control group is that in terms of the sales guys and the clients? Are they very similar to the broader profile?

It's Mike. With regards to the type of clients, they represented our Premier user type client. In the beta, we had the reps who were part of the beta manage those accounts prior to the beta, but the folks that were in the CSM role and the folks that were in the solution partner role were introduced primarily at the end of August or September, so they had very little time to ramp. So it's a good reflection of the sales organization as far as the types of clients. They were strong clients. We also had some very difficult clients in that group, so it was, I think, a good sample size. I think the biggest thing and I think I pointed this out, was the learning that we saw with an individual that is just focused on retention and engagement with the client had an enormous impact on our ability to find other opportunities within these client accounts, different business units, different contacts and so that freed up -- by having an individual focused on the servicing part of it and working closely with the client on getting value, it freed up the sales rep to do what they are supposed to do which is selling and prospecting within these accounts. And so, we're seeing it. We launched more teams at the beginning of January and we're seeing similar types of uptick, but it's still early stages. There's a training component to this and a hiring component to this, but we're feeling good about that.

In a simple sense, engagement by a client equals higher renewal rates and with the CSM in place, we saw much higher engagement just looking at activities, especially across the four areas that we measure really carefully, so that's one. The second is -- obviously, you know our business well -- retention is a critical component. If we can drive that five to six to seven points, it would make a huge difference in our financials. The second element is the SPs are really driving enrichment. The old account managers had to service and then look for enrichment. They tended to move really more towards servicing and not enrichment. So with the SPs in place, we saw really fast enrichment rates and I really don't think it was an unfair test.

We got good client feedback as well, both in the engagement part, but also clients that had come to us previously and want to gauge around customer experience or something and because of the way you had to work with our ecosystem, it was sometimes painful. They heard the solution presented in Forrester terms, not in client terms and now with a solution partner, we're getting back to them much more quickly with a statement of work, able to react to their needs in a much more seamless way and that resulted in some great results.

And one other question, your plan in terms of timing to roll out the new sales model, is there a good amount of slack in that? Do you think that's a conservative estimate?

It's a question of talent is a part of this, so when we were launching the beta, we had individuals who were in sales who were very, very good account managers who decided they would be better suited if they were in the customer success organization and we're still seeing that. And so, we have to thread the needle of moving them out of a quota-bearing role into the customer success organization, as an example, so we can't jeopardize one part of the business for another. So the staffing part of it, as I mentioned, where the profile -- the CE is a higher-level profile, so we had to make some adjustments of both what we're offering and where we're finding these people and we're also staffing up on the customer success organization. Some of those folks have come internally; some of those are externally. So we have contracted with a third party to help us source more effectively and ramp that, but we're launching about a quarter of the teams in January. We're going to be launching another quarter of the teams in the April time frame. If we see an opportunity to accelerate, trust me. We're going to accelerate. George is very focused on that as well.

At our Directors meeting yesterday, the Board was very -- we went very, very into the data and they were observing, I think rightly, that we have a very good solution here and so I think if anything it's not going to decelerate. It's going to accelerate.

Our next question comes from Allen Klee of Sidoti. Go ahead, Allen. Your line is now open.

If I look at your revenue guidance for 2017, I think it implies a decline of 0.6% to an increase of 1.8% and your non-GAAP operating margin guidance is 10.5% to 11.5% which is I think a decline from 16%, so I'm trying to understand a little of kind of what's happened with the sales model and the operating leverage that I think we might have been expecting. Maybe if you can just kind of drill into that a little bit.

Sure, Allen. It's Mike Doyle. So I think a couple things. I'll start with revenue first. So you've got a little bit of a drag with FX, somewhere between one and two points, but we're low single digit. I think that's primarily a function of -- we ended the year down in sales headcount and modest bookings growth for 2016. So, essentially we're rolling into the year with, what I would say, low momentum in that area. So that's the primary driver of where we're from a revenue standpoint now. Actually, to some degree, some of this gets to how quickly can we start filling gaps in hiring, but right now our revenue numbers reflect where we sit today with staffing and what I would call normal ramp and normal hire patterns and if that changes for the better, then ideally that will help us bump up the revenue numbers. But I think we wanted to sort of give what we think was realistic based on existing. And in terms of the operating leverage, I think the biggest change is we liked what we saw and we're making significant investments in both selling and consulting and on the product side and that's, frankly, creating a little bit of a real drag on the earnings side. So, we're taking marching down a little bit in the near term and our pattern in our business is you add sales headcount in the beginning in particular, they ramp and then as they start booking business, the syndicated business, you get revenue over time. So, year one is typically one where expenses are a bigger drag and then you get the big benefit sort of late in the year and into the following year and right now that's our expectation. And to the point…

Okay. And how do you think about buybacks now compared to how you have historically? Is there any reasons why you would think that you might want to be more aggressive on that now?

I think -- look, we're going to be proactive based on where we see the stock going. We're going to look to be opportunistic. If we believe the shares pull back to a certain level that we deem inappropriate and a value, we'll move accordingly. We have $60 million in our authorization from the Board and obviously enough cash to do that, so we're comfortable moving as aggressively and opportunistically as we see in the moment. So, last year, because of the run-up in the stock, I think we were -- we didn't have much in the way of any activity during the course of the year and we'll see what the first half of this year brings.

The buybacks are also correlated -- or cross-correlated with acquisitions, Allen, obviously, so it really depends -- and the way acquisitions often work is that we can get all the way down to the last day of the deal and it doesn't happen, so it's a complex algorithm, let's put it that way.

I'm not sure if I understood, though. Do you imply that you think there's value in buying back the stock at the levels of that now or you don't think there is?

I don't want to get into the particulars of when we will buy back. We clearly didn't think in the second half of last year that there was value for us at that point in time. I think when the market had a run-up that, frankly, we thought was a little bit frothy for probably every company, we didn't feel the need to jump in at that point. So we'll look and evaluate, to George's point, as we'll see what happens in the marketplace over the next 60 days and make a determination at that point in the marketplace. If it dips and we think the pricing is right, we'll be opportunistic. So we'll just have to see.

But it is complex because often we're reserving cash for potential acquisitions.

Okay. And in your press release, you talk about anticipating double-digit growth in 2018. When you say -- does that mean topline or bottom line? How do you define that?

I would say that it's probably topline on bookings and probably high single-digit in revenue and we'll get double-digit EPS growth at those kind of rates. That shouldn't be off of where our current EPS range is. That double-digit growth EPS growth in 2018 is not, certainly -- that would be -- given how our model leverages, that's very doable, even with mid to high single-digit revenue numbers. But we expect double-digit bookings and probably high single-digit revenue and double-digit EPS growth.

Okay. And how should we think about seasonality of quarters in 2017?

We haven't put out guidance for each of the quarters. I would say that --

It's all driven by events.

Events will be a piece of the story and then the other element from a revenue perspective will be how quickly we hire and ramp consulting heads because that will add -- it could push a little bit more revenue towards the back half, based on how we're thinking about it relative to year ago. So that's how I would think about it at this point, Allen.

Just Europe, any comment on how that did?

We saw strong performance in the first half of the year from Europe and due to some headcount issues, we actually were down from a sales headcount perspective going into Q4, so no real particular area. We saw it somewhat on the vendor side in the UK, but some of the headcount really took a while to get on board. As I mentioned in my comments, Europe was the place where we went and contracted with a third party to provide us with better sourcing of candidates. So we went into the fourth quarter with low headcount numbers. By the end of the fourth quarter, we were essentially fully staffed which was great, but it was a bit of a headcount story in Europe in the second half.

Allen, one last thing. One element in Europe is encouraging on the analytic side, the data side in Q4, very good uptake on the customer experience index there.

Our next question comes from Bill Sutherland of Emerging Growth Equities. Go ahead, Bill. Your line is now open.

The questions that I had have mostly been asked. Curious, as I think about the makeup of your customer -- as you segment it into Premium and core, is the Premier group the larger? I assume it is the larger part of your customer base.

From a revenue perspective -- so it's made up of our largest vendors and user clients. Within that group, it ties to 12 particular types of verticals, -- the ones that you would expect, financial services, healthcare, those types of verticals. Within that group, there are also some smaller clients as far as the size that are underpenetrated and so it was a big lesson as we kind of went through this. There were certain territories that had, say, three or four of these ideal client profiles in Premier, but maybe three or four clients that don't necessarily match up with the ideal client profile, a mining company or a oil and gas company that traditionally doesn't buy all the things that Forrester sells. And so by giving that time back to the sales rep to have them focus on the ideal client profile and these are in many cases more expensive sales reps, we're seeing better penetration.

I get the logic of it, Mike, I was just kind of curious how this -- because you are not going to get -- the core client, that's not where you are going to get the big lift in retention and bookings.

We're actually -- so the clients that we moved from Premier, when we used to have a group called strategic, into core, some of these clients may not be in the ideal client profile, but they also are underpenetrated and they are also underserved. And so in the field, you might have a senior person who has a client like this that sort of renews for the $50,000 every year and they don't really explore other opportunities. As we moved it into core and specifically into an inside model, we saw the amount of contact and engagement that we had with an inside model in some cases tripled in a month and so we do expect retention to improve there. We're selling a limited product set specifically to the core client, but we do expect productivity enhancement through both technology and process, but also just the amount of contact that we're having with this group of clients is very different than what they experienced maybe in the field when they were part of a territory that had five very, very large ideal client profiles and not necessarily a priority for a field-based rep.

And so as I understand it on the vendor side, you've had less of a falloff, as far as this transition into where you've got the product set. It's the end user that has struggled more with understanding kind of how to get the most out of the product and --

I think on the vendor side it's a pretty straightforward value proposition. They buy us to obviously read our research in their market. We influence their business. They also buy us for lead generation and demand creation activities and it's a pretty straightforward value proposition with the vendor side. On the user side, as we've moved to Age of the Customer, we're targeting specific types of clients and that's the big piece that we keep coming back to. There are certain types of organizations that the Age of the Customer truly resonates with and so, yes, the user side in some cases, if we have an organization that really their core focus is on the data center and they're in oil and gas, they're not going to be a great client for us. And so, we did see some of those clients [indiscernible] and so -- but we're focused on those 12 verticals that can really make a difference, both from a client perspective and from a prospecting perspective, meaning our new business teams are also focused on ideal client profile prospects.

Bill, it's a little like the dialogue in my remarks that we were -- our Age of the Customer research was really oriented to the most advanced companies and that's why now the playbooks we've readjusted so there is a beginner, intermediate and advanced track for this company and that is now widening our aperture. Because Age of the Customer, look, we're going where the puck is going. We're ahead of the market, to an extent, here and by widening that aperture, we think we can bring more companies into the fold. So I think even three years later, I think we're still sorting through with some of these users and we were with the CIO of Lucent in London last week and this guy was completely BT, totally focused on CMO, completely into the Age of the Customer and completely gets it. So there's an element out there that it is -- we really resonating with. But I'd say that today that still is a minority; it's not the majority.

I am showing no further questions at this time. I would like to turn the call back over to Mike Doyle.

Okay. Thanks, everyone, for participating and George and I will be out in the marketplace in the first quarter and be talking about where we're headed and look forward to seeing everyone. Thanks.

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.