Good afternoon. Thank you for joining today's call. With me today are George Colony, Forrester's Chairman of the Board and CEO; and Mike Doyle, Forrester's Chief Financial Officer. George will open the call. And Mike Doyle will discuss the financials. We'll then open the call to Q&A. A replay of this call will be available until March 9, 2018, and can be accessed by dialing 1-888-843-7419 or internationally, 1-630-652-3042. Please reference the passcode 5657678#. Before we begin, I'd like to remind you 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 the 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'll now hand the call over to George Colony.

Good afternoon and thank you for joining Forrester's Q4 and Full Year 2017 Conference Call. I will give an overview of the quarter and the year. Mike Doyle, our CFO, will give a financial review of the fourth quarter and full year and guidance for 2018. Kelley Hippler, Forrester's Chief Sales Officer who typically joins this call, is presently in Hong Kong at our Asian kickoff so she will not be with us. 2017 was the fourth year that Forrester is focused on its Age of the Customer strategy and it was the first year of our transition to the new selling model, what we call the Customer Engagement Model or CEM. We believe that the strategy and the new sales structure are having positive impact on our business results. The fourth quarter in particular showed improvement in our key metrics as we beat our financial guidance and sales targets in the quarter. Additionally, the Company exceeded its financial guidance for full-year 2017, turning in better-than-expected results in revenue and earnings per share. Now as you’ll remember, Forrester believes that the worldwide economy is being transformed by empowered demanding customers. In this edge, companies must create compelling experiences that deliver value and connect with B2C and B2B consumers on an emotional level. Forrester works with business and technology leaders to build customer obsessed strategies that drive growth. We are specialized to help companies do three things, one understand their customers; two, revolutionize marketing to win the new customers; and three, build business technology that serves and retains customers. When we began this journey four years ago, many large corporations had not yet recognized the sea change in the economy. And in previous calls I've said that we were in fact, ahead of many firms. But now, companies like Amazon, USAA…

Thanks, George. I'll now begin my review of Forrester's financial performance for the fourth quarter of 2017, 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 2018. 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 2017, we continue to utilize an effective tax rate of 40% for pro forma purposes. For the fourth quarter of 2017, Forrester delivered revenue and pro forma earnings per share that exceeded the top end of our guidance. We experienced solid revenue growth that was driven in part by double-digit growth in our non-syndicated offerings and some acceleration of onetime revenue from the first quarter of 2018. We did initiate investments in products and infrastructure in the fourth quarter, particularly for our data products, which we plan to continue throughout 2018. In addition, we absorbed some unplanned expenses and adverse currency impact. Despite these additional expenses, we achieved our margin guidance. I do want to make a comment regarding our Q4 2017 GAAP EPS performance. For Forrester, like many U.S. companies, the impact of the Tax Cuts and Jobs Act will have a positive effect on our tax rate for 2018 and beyond, which will result in meaningful tax savings. There was an adverse impact of $1.6 million to our Q4 2017 GAAP earnings as a result of revaluing our deferred tax assets at the new lower rate and a toll charge for deemed repatriation of earnings. Turning to sales performance for a moment, let me update you on our sales CEM initiative. We are happy with the way 2017 finished,…

Thank you. We will now begin the question-and-answer session. [Operator Instructions] And our first question comes from Tim McHugh from William Blair. Please go ahead.

Thanks. Just want to follow-up on the investment spending or the decision to reinvest part of the tax benefits. I guess, can you walk through why, I guess, just – I get that it's obviously, kind of windfall of cash flow, but you've also been investing the last few years. So were these things that were on a wish list that you just couldn't get to before? I guess, talk me through the thought process.

I think, from our standpoint, Tim, we looked at this – we have a running list of initiatives that we keep, strategic initiatives, as part of our broader five-year plan. And I think the combination of factors that enter into our decision to do more in 2018, certainly the tax rate helped. I think, more importantly, what George described in the beginning is we are beginning to see this resonate in a very real way. And I think we're trying to accelerate the investments in these key areas, frankly, to build growth at a much faster rate. So the tax rate reduction certainly helps because it helps to sort of fund that and still, the net result is a higher EPS year-over-year than we would've expected otherwise. But it did create the opportunity to invest in what we see is a very high growth potential for Forrester.

Tim, George here. I think it's enabled us to grow faster.

Yes.

These investments, we would have maybe delayed if we hadn't had the – if the windfall hadn't been there. But we're just glad to be able to accelerate – as an example, the real-time customer experience platform, we could get to that faster than we would have. So it's just speeding us up, which we like.

Okay. And can you talk into bookings. It seems like it was obviously nice to see some improvement in the quarter. How much of that is coming in from the traditional research business versus the kind of the consulting or advisory types of – parts of the business? And, I guess, how does that impact how you think about the margins over the next few years and the predictability of what you expect for next year or this year?

I mean, I think, look, we had healthy bookings in our consulting and advisory, but we've been happy with the performance of – with their core research business. So I think that part has been good and been very encouraging. I think we've made meaningful progress there, I think we've been very encouraged by what happened, to George's point, this year-end. As we look at our product set, year-over-year, we've got, frankly, the bulk of our products growing at a meaningful way, whereas, a year ago it was probably less than half. And so we feel really good about it, and core research being one of them.

I think digital is helping us here, Tim, especially in the data space, and the work that we're doing around – the new forms and the new ways to deliver the research. As I said, we've doubled the iPad and Android use and also the iPhone use, so it's – we're feeling good about the syndicated side of our business as well.

Okay, thank you.

Thanks, Tim.

And our next question comes from Vincent Colicchio from Barrington Research. Please go ahead.

Yes. Mike, you've mentioned that five of the six teams had healthy growth. Was that – the one that did not, was that Europe? Can you give us help with that?

Actually, no. Europe, we had a good quarter in Europe. We were pretty happy Europe rebounded nicely. And so we're hoping this is the beginning of a real trend. I think they're getting some benefits from CEM. But also, I think, some leadership stabilization, things are starting to happen that we're feeling good about.

I think the economy is improving.

Yes it is. So we’ve got that going. I think it was really the West team, which was the last North American team to go into the market, has struggled a bit. They've made some – in addition to the CEM change, they're making some leadership changes and transition. And we think that's temporal. But no, we're actually happy with what's going on in Europe right now and feel really good. I mean, we've got five of the six teams really moving well and showing good numbers, it was very, very encouraging. And more importantly, I think the notion that teams that have been in this model the longest have performed consistently better and had a really good year is very encouraging. Because as the rest of the teams continue to sort of ramp up, if you will, and come down the learning curve, we're going to see this performance will continue to accelerate.

And then, as you rightsize the sales territories, are you seeing any meaningful pushback in terms of the culture?

No, I actually think the sales teams are frankly very excited about the rightsizing because I think they felt, in the past, that we put them out in territories that weren't necessarily target rich. I think the old model of just higher sales headcount, put them in the field and they'll find sales opportunities, frankly, it wasn't that effective, I think. This notion of taking a step back, looking at the territories and try and match them appropriately with the resources, the sales folks are happy with that because it's a much better opportunity. And I think what they've done is balance more existing AV so that they start with an existing book of business to work from and a list of target candidates that fit nicely with the target verticals that are in our space. I actually think this is good all-around for everybody. If you look at the new selling model, Vince, we're going to be asking for growth in those territories over time, with the AV growth – we're getting net driven value increase in each of those territories. To do that, Kelley really had to give them – and a very legitimate group of clients in a territory, which is well-endowed with opportunities. So it's really a precursor to the growth of those territories over time.

And then with the momentum improving in the quarter, your accounts receivable, your DSOs ticked up quite a bit. Do you see that normalizing in the first half?

Yeah, I wasn’t too concerned with that. I mean we did notice that. But I think I'm not too concerned. I think we will have our Q1 numbers may be a little bit impacted. We’ve rolled out with the new revenue model, we're also in the midst of changing systems. So we finished up 2017 with a systems changeover and moving everything out of Siebel into Salesforce. So what we'll probably see is a little slower cash collection in Q1. So we may see some impact in Q1. But I think by the end of the first half, we'll be back to normal. I'm not concerned about the quality of receivables. I'm very comfortable with our collection process.

Thanks guys.

Thank you, Vince.

Thanks Vince.

And our next question comes from Allen Klee from Sidoti & Company. Please go ahead.

Yes, I wanted to go back to the question on your first quarter guidance. Help me understand, if you're going to reinvest back half of the tax savings, wouldn't your bottom line results be better? Why are you modeling it that EPS is going to be down year-over-year?

You can see from our full year obviously, the EPS is growing nicely. And I think what's happening, there's a couple of things going on. The change in accounting rules meaningfully impact how we treat event ticket revenues. So effectively, we would normally have a block of event revenue, ticket revenue that would fall in Q1 happened every year. And that's now going to follow when the events occur, which our events really begin in Q2 of this year. So

And no event in Q1.

So that goes away, there’s an impact in terms of the way data survey costs are being treated. We used to spread them over the course of 12-months, as people use the survey. The Regs basically push for that cost impact to hit as you spend, so essentially almost like a cash basis. So that has driven up costs. So those two things are meaningful impacts. In addition, we had strong performances, as you can see both on reprints and consulting revenue in the fourth quarter. Some of that is frankly backlog that we expected to hit the first quarter. And it's meaningful. So that, that's definitely coming out. So those things impacting us in first quarter, clearly you can see from our full year guidance, we expect all of those things to stabilize. They are truly temporal in terms of the impact and it falls primarily in Q1. So it creates sort of an odd situation for us in Q1. Lower revenues due to the backlog effect and the effect of the event ticket revenue, which is – all that's meaningful. And then more costs coming in, plus initiative costs coming in during the first quarter so the combination of those two things compresses margin. And historically our first quarter has always been our lowest earnings quarter because we have no events. We typically see sort of consulting revenue, other things come down. So it's normally a low quarter. But you all have – all your normal expenses, as a matter of fact, some expenses sort of come up in the first quarter. All of your tax related to comp comes up. So we're seeing a little bit more compression than normal due to some of these changes that I mentioned. But again, for the full year, we feel pretty confident. This is just I think a Q1 aberration.

Okay. And then sort of following up on that, for your full year guidance, I think you're not really modeling – I don't believe operating margin expansion. Is that – would that be due to accounting reasons or any other reason?

No. It's really due to investment. It's not due to accounting. It's due to our desire to invest back in the business. So what we've looked at is – and this gets to the question Tim was asking, and I think we look at tax saves that we had and decided to put an additional $2 million of expense back onto the books in the form of investment to go – continue to double down on product digitization. And so that's had an impact. To your point, that's correct that we've seen basically, on a percentage basis, margins that are approximately flat year-over-year. Obviously, the EPS guidance shows growth of 13% to 19%. So we – clearly, earnings per share's going up or opting to push back in and spend money to drive additional growth.

Okay, thank you. And how much cash did you say, if any, you were planning to repatriate or you did?

We're not, at this point, planning to repatriate any cash. I think what we're – we're continuing to look at our M&A pipeline and look at investment opportunities overseas. And so we've made, at this point, we made a conscious decision that the cash will stay there. Until we determine that in fact we needed either, back here to George's point, I think you referenced if there was, in fact, a large M&A opportunity in the U.S. and we obviously have to consider bringing it back. So we'll look at those things as the year progresses, but for now, we were opting to keep the cash right where it is.

Okay. And finally, I don't think you bought back any shares in the quarter. Just any thoughts or maybe what your authorization is and any thoughts on how you're thinking about that going forward?

I mean, we – in our release today, we announced that we increased our authorization by an additional $50 million. And I think that was – our authorization have dropped about $20 million. And last year, we spent $40 million. So I think the board felt it appropriate to replenish. And as always, we'll be opportunistic when we think it's appropriate and we think that the stock is at a reasonable price. I'll reiterate the point George made that our primary uses for cash are: internal investment, number one; acquisition opportunities, if we believe they're appropriate for the company; and then third being essentially returning cash to shareholders in the form of the dividend, which we announce we'll increase that to $0.20 per share per quarter. And share repurchase will be opportunistic as it always has been for us.

Thank you very much.

You bet.

Thanks Allen.

Thanks Allen.

And we have no further questions at this time. Thank you, ladies and gentlemen. Okay, go ahead.

Thanks very much everyone. I appreciate you joining the call. And we will be out visiting with investors during the course of the quarter, so we look forward to seeing you soon. Thank you.

Thank you.

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