Good afternoon. Thank you for joining today's call. With me today are George Colony, Forrester's Chairman of the Board and CEO; Kelley Hippler, Forrester's Chief Sales Officer; and Mike Doyle, Forrester's Chief Financial Officer. George will open the call, Kelley will follow George to discuss sales and Mike Doyle will discuss our financials. We'll then open the call to Q&A. A replay of this call will be available until March 14, 2020 and can be accessed by dialing 1 (888) 843-7419 or internationally 1-630-652-3042. Please reference the passcode 6135978, pound. 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 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.

Thank you for joining the Forrester Q4 2019 call. Following my remarks, Kelley Hippler, Forrester’s CSO will update on sales and then Mike Doyle will conclude with a financial review for the quarter. We will then take questions. On many levels. 2019 was a watershed year for Forrester. We successfully integrated SiriusDecisions. We grew our legacy research business and we continue to enhance and extend new products. And we did all of this while executing on our financial plans. Finishing the year at the upper end of revenue guidance and exceeding EPS targets. This marks two consecutive years of double digit EPS growth, and we are expecting a third year in 2020. Client retention was at 72% one point above Q4 for 2018 and client enrichment, that's the average growth of client accounts remained at healthy levels at 106%. In its first year, the SiriusDecisions acquisition was accretive to earnings. We are now a full year into the acquisition of SiriusDecisions and are excited about the opportunities that the deal is unlocking. As with all acquisitions, this one had its challenges highlighted by the changes we've made in sales in May, when we brought the SiriusDecisions sales force under the leadership of Forrester's global sales team. While this created short term bookings gaps at mid-year and higher-than planned attrition in the Sirius salesforce, it has set the company up to achieve its 2020 plan. We chose to address our challenges earlier rather than later and I believe that that strategy will pay off. With the structural integration complete, we are now operating as one company. In 2020 we are focused on three imperatives as an integrated operation. Number one, cross-sell. The Forrester and SiriusDecisions salesforces were fully integrated as of January 1, with all sales people selling both portfolios, what…

Thank you George. Our original plan for 2019 was to run the SiriusDecisions sales team separately from the Forrester sales organization. As George mentioned, in May we accelerated the integration and moved the SiriusDecisions teams under Forrester sales leaders, while SiriusDecisions attrition remained in the mid-thirties through year-end, Legacy Forrester attrition was down 3% over prior year. Our ramped rep productivity on the Legacy Forrester side increased for the 12th consecutive quarter. We also saw a double-digit improvement in sales productivity for our rep selling the SiriusDecisions portfolio. In the quarter, our 12 months rolling client retention improved over prior year and thanks to our strong new business efforts. We also saw an increase in total client count. Now turning to 2020, in mid-January we held a global sales kickoff in Boston, it was impressive to see the growth in our organization from 528 to just shy of 700 over the course of the past year. Sales kickoff marked a pivotal moment in our company's history as our sellers had an opportunity to meet as a fully integrated team and the customer engagement model. It's also provided a great chance to network and share best practices with colleagues from across the globe. There was a palpable excitement around the values that the new Forrester will bring to our clients across vision, strategy, and execution to help them drive growth. During the sales kickoff client panel, one of our largest healthcare clients expressed his excitement about working with the new Forrester in 2020, sharing that quote, “You have both sides that a modern organization need, operational and aspirational, helping us to get ahead in the market. I show up every day to solve business problems, some are strategic, some are operational. Having people that you trust in the trenches with you,…

Thanks, Kelley. And we'll now begin my review of Forrester's financial performance for the fourth quarter of 2019, 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 2020. Please note that the income statement numbers I'm reporting are pro forma and exclude the following items, impact on revenue from the acquisition related fair value adjustment to deferred revenue, stock based compensation expense, amortization of intangibles, acquisition and integration costs, and net gains and losses from investments. We continue to utilize an effective tax rate of 31% for pro forma purposes for 2019. In addition, we'll continue to highlight the impact of SiriusDecisions on our consolidated results by indicating year-over-year performance with and without the acquisition and the relevant sections of my comments. In the fourth quarter Forrester delivered pro forma revenue at the upper end of guidance and earnings per share that exceeded guidance. Revenue grew by 27% for the quarter and by 6% excluding SiriusDecisions. Expenses were favorable to expectations, driven by open sales headcount and bonus savings. Our full year earnings, exceeded guidance by $0.07 per share and increased 21% versus prior year, while we were integrating the largest acquisition in Forrester's history. We did experience some increased turnover and sales which impacted SiriusDecisions performance in 2019 and will impact our growth rate in the first half of 2020. We are, however very happy with the product performance and client satisfaction with SiriusDecisions product line and it's a big part of our growth plan for 2020. Now let me turn to a more detailed review of our fourth quarter results. Forrester’s fourth quarter revenue increased by 27% to $125.1 million from $98.6 million in the fourth quarter of 2018. SiriusDecisions…

Thank you. [Operator Instructions] And we have a question from Andrew Nicholas, [William Blair & Company] You can go ahead with your question, Andrew.

Hi. This is actually Trevor Romeo in for Andrew. Thanks for taking my question. First of all, so very strong margin performance in the quarter relative to your guidance. Looked like G&A expense showed some good leverage as a percentage of revenue. Just wondering if you had any more details on what drove the upside there? And then given the strong margin improvement in 2019, could you see any upside to your margin guidance in 2020, which I think implies only about 20 basis points of improvement at the midpoint, if I'm looking at that correctly?

Yes, Trevor. This is Mike Doyle. So we did have good improvement in the fourth quarter. A couple of things, as I mentioned in my comments, one was open headcount. And then on the G&A side, I think it's – we had bonus savings. So essentially, we had an aggressive bonus target that we fell a little short of, so we made an adjustment to our bonus matrix in the fourth quarter. That brought favorability, if you will, into G&A. I think that's the primary reason for that. In terms of opportunity for margin expansion, I think the key is, for us, and it's a little bit – we had originally had an expectation, probably something a little higher. A lot depends on how quickly we can hire, train and ramp reps and book business. So I think that, as Kelley mentioned, we had attrition that sustained itself at a higher level on the SD side. I think that as we staff up, also as we train our existing Forrester legacy reps to be selling this SD product, those factors, if they move ahead of what we expect, will drive greater top line growth, which then will expand margins. That's where the energy is. It's really how do we grow both our bookings faster and then ultimately, revenue faster. So I think if it comes anywhere, it will be that we get out of the gate a little bit quicker than we anticipate, we can ramp quicker. And that will drive better top line growth.

Okay, great. That's helpful. And then, Mike, I think you had also said that all of the growth in the research revenue line came from SiriusDecisions in the quarter, which I guess implies that the legacy was kind of flat. Just, I guess, anything you'd call out there in the quarter? I know you saw a little acceleration in legacy Forrester Research last quarter. So just any thoughts on what drove the deceleration there?

Yes, it's interesting. In the legacy research, we actually had some growth. We actually had, for us, which is unusual, our reprint business, which typically grows at a pretty healthy rate, actually declined in the fourth quarter. So that's unusual. We think it's a onetime anomaly. And since that is bucketed with the broader legacy Forrester Research, that's what's driving it down. So no, we still – in the quarter, for legacy research, we feel like we had a good quarter, particularly on the user research that was good. We're pretty happy with that. And again, we're hoping that's going to compound itself as we go into the year. And I do think the reprint revenue will sort itself out. That was just, again, a onetime thing in the fourth quarter.

Okay. Got it. That’s very helpful. Thank you.

Thanks, Trevor.

Thanks, Trevor.

And our next question comes from Vincent Colicchio, [Barrington Research Associates]. Go ahead, Vincent.

Yes. Kelley, I apologize if I missed it. What was the SiriusDecisions attrition in this quarter versus the prior quarter?

So attrition on the SiriusDecisions side has been running between 35% and 37% the last couple of quarters.

Okay. So it was consistent this quarter with the prior quarter, is that right?

That is correct.

Okay. And is the level of seniority in terms of the turnover, was that consistent as well?

Yes, pretty much...

[Operator Instructions] We do have a question from Allen Klee, [National Securities Corporation]. If you want to go ahead with your question, Allen.

Yes, hi. So can you talk about like how you think about the overall demand environment, maybe now versus a year ago? And if you think that has any difference on your general longer-term thoughts of annual pricing power and any abilities to kind of lower cost of generating research, such as surveys? Thank you.

Yes, I'd say that this is just a general color about the economy. From our standpoint, Allan, all is moving very quickly, very fast, very healthy. I mean, coronavirus aside, we don't – our analysts and our economists here are trying to factor that all in. But generally, our demand is very strong. We will have a price increase in July, and we believe we can justify that price increase. Cost of surveys has not dropped. I would say that the fact that we now have a real-time source of survey material through FeedbackNow, that is a very low-cost way to gather survey and research information. So we see it in the real-time side, but not on the typical traditional survey side. So I would say cost staying flat. Nothing is increasing unexpectedly on us, and demand is strong for the company and our products.

And our numbers, Allen, do not reflect any sort of potential impact of, to George's point, things that may tip the economy, like the coronavirus, like Brexit. Our FX rates are pretty much roughly the same year-over-year in terms of our assumptions. So that obviously could change if there's a disruption in the economy. You probably didn't see a strengthening of the dollar, and that would impact, obviously, our businesses outside the U.S. But to George's point, we're not seeing anything yet. Therefore, our numbers don't reflect anything.

And by the way, our business in China is small. I don't have the number right in my head, did you guys have that number?

It is – yes, well, our Asia Pac business is decent in size, but China as a piece of business, well, is relatively small.

Maybe just following up on what you said with FeedbackNow. Could it seems like it can be very powerful. Could you maybe talk a little more, maybe give an example of like as this scales up of how you see customers using this? And what this can turn into?

Yes. So just to give you some context here, we're currently logging about 450,000 per day now through FeedbackNow. I would expect to go well over 100,000 next year, probably in the 600,000 range. But the entire – the value model here, Allen, is this is not survey-based customer experience. Where – and we've been doing this for many, many years where we would survey within a company, understand their – the level of their customer experience months later and then they would strategically change their customer experience. This is about giving our clients the ability to monitor experience in real time, and given them the ability to then improve experience in real time. So it's very different than the traditional model and very well received. I mean, we're starting – our presence is first in the physical side soon and with – I would – if I pick a number here, we're 85% physical, 15% digital. But as we go deeper into 2020, that digital is going to grow

I think the other piece that's happening now and in the fourth quarter, we landed the largest deal we've ever had. And that was sourced by one of Kelley's sales players. So we – prior to that, I've been working pretty much with the existing FeedbackNow sales reps. Their model has been lots of smaller deals, some maybe decent-sized deals, but a lot of small deals. We're going to shift to bigger deals, and that should help us accelerate, partnering with Kelley's sales organization, accelerate the growth of FeedbackNow both in 2020 and beyond.

That deal was north of $1 million.

That's great. And then maybe just something – one more thing on the SiriusDecisions sales force attrition. I'm trying to speculate that if I was a salesperson at SiriusDecisions, why would I be one of those people attritioning? And I would – first choice I would say is if I thought I was going to make less money, potentially, my accounts would go down or I'm getting a lower payout. Or is – can you respond to that? Or do you think that whatever that issue is that something is going on that maybe that won't be an issue going forward?

Sure, Allen. So to that point, I think one of the things that we learned after the acquisition was that rep success rates in the prior below industry standards. And anytime you have a sales force that is not by and large hitting its number, we're going to stop for attrition because people aren't getting to their goals and their objectives. So I think unfortunately we dealt with some of the ramifications of things that had happened before we stepped on the scene. With that said, we have actually just gone through a process right now to level all the SiriusDecisions reps to make sure that we have looked at their skill sets, looked at their quotas, location, et cetera, and making sure that they map appropriately to the same level at Forrester. So we've made quite a bit of investment there with that sales force to make sure that they're at the proper level with the Forrester sales organization. So unfortunately, a lot of it were driven by things that happened before the acquisition. And again, it's also unfortunate that a lot of the conversation has been about the folks that have left and not some of the individuals that have stayed. We have some fantastic folks that are now part of the Forrester organization who originated with SiriusDecisions who are going to be big contributors for us as we move forward here, including folks on my leadership team and our management ranks that we're really excited about.

Okay, thank you so much.

Thanks, Allen.

Thanks, Allen.

And we have a follow- up question from Vincent Colicchio, [Barrington Research Associates]. Go ahead, Vincent.

Yes. Kelly, when I got cut off, I was asking if the seniority level of the people leaving at SiriusDecisions was consistent with the prior quarter.

Yes. I'm sorry, I thought it was something I had said, Vince. So I'm glad there was a technical glitch. So yes, with that, we've continued to see pretty much steady attrition numbers across different populations. Again, I think, typically, with the sales force, Q1 is – there's some seasonality to attrition. I think once we get through this quarter, things are definitely going to stabilize. But it's been pretty consistent across job levels and geographies as we worked our way through 2019, and we expect it to stabilize shortly here in 2020.

And I'm not sure who this one is for. But how conservative is the 5% growth rate for the sales force for 2020? May that increase a bit if we come in with better-than-expected performance in first half?

Sure, Vince. I'll take that one. So we are starting off with 5%. And then the work that we have ahead of us is to reevaluate and reassess the territory scoring model that we developed as part of our move into the customer engagement model to figure out what the optimal size territory is. So there is a possibility that we will add more as we go throughout the year once we do that work. But we also want to be thoughtful about making sure that we have adequate territories for our sellers to be able to get to their quotas. But I would not be surprised if by midyear, we are continuing to add to that number.

That’s it from me. Nice quarter guys.

Thanks, Vince.

Thanks, Vince.

And our next question comes from Anja Soderstrom, [Sidoti & Company].Go ahead, Anja.

Hi, everyone.

Hi, Ania.

So I just had a follow-up on Allen's question about the FeedbackNow. So you are monitoring the customer experience in real time. And then are you already now able to act on that? Or is that something that's coming in the future to respond to the..

Are you talking about the clients being able to act on that?

Yes. I mean when the customer are giving feedback, they are able to act on it in a real-time sort of?

Yes. The customers have real-time connection to that data through website, but also through mobile apps. And in fact, that's how – primarily how it's being used by our clients today. This is the current FeedbackNow. It is being used to respond quickly to problems, to dirty bathrooms, to any area that's being monitored that goes red. So yes, it is being used today to monitor in real-time and to improve in real time. Now there are some clients who are better at improving real time and some who are less better. So it's – this is a – I would say this is a growing muscle in the part of these clients. This concept, that experience can, in fact, be moved, can be improved in real time.

Okay, okay. That was helpful. And then in terms of the other certificates. You launched one in the third quarter. So you have two, three now, right?

Yes.

Yes. How do you see that portfolio building out in terms of the..

We actually are very happy with that business. I mean, we literally have just got going with that and we've had really healthy growth. And we inherited the business also from SiriusDecisions, but we've essentially – we're moving forward with that business, we expect it's also going to grow double digits again in 2020. We like the product. We've got a good team running it. And we're pretty bullish on what that can do for us. So we're feeling good about it, Anja.

Yes. And on the two primary certification spaces. The first, of course, is customer experience, and there are believed three levels of customer experience certifications. That's the first. And the second is B2B marketing. And that's coming directly from SiriusDecisions. There's lots of opportunity in certification to ride on the SiriusDecisions Research and to build, as an example, in demand marketing, in marketing operations, in sales operations. So lots of new areas to be launched in certification, primarily running off the execution research or SiriusDecisions Research.

Okay. And what sort of ramp do you foresee having on that like a set figure per year or?

From my perspective, I think those businesses are going to grow and accelerate. And the intent of talking about them both in this call and as it relates to the year was, in terms of dollars, they are not huge yet. But I think the point we were trying to make is we are continuing to invest in a broad array of products within Forrester in addition to managing through the SiriusDecisions acquisition integration. So – but I think that these are integral parts of our business and that they're going to grow at a pretty healthy clip over the next five years. I think FeedbackNow has a tremendous amount of upside. To George's point, we're really in, I would say, stage one in the physical form, but there's more to come. And certification, as George described, has a lot of opportunities to take this business into other areas in addition to the ones we currently service.

Okay. Thank you. That was all for me.

Thanks, Anja. I appreciate it.

Thank you.

We have no more questions in the queue at this time. Would you like to make some final statements?

Yes. First everyone thanks for the patience. I apologize to the minor technological glitch, it does periodically happen. We have already put some dates out there with folks we're looking forward to getting out on the road and talking about the story and look forward to a very exciting 2020 for Forrester. So thank you very much for joining.

Thank you.

Thank you.

And thank you. Ladies and gentlemen, this concludes today's conference. Thank you for participating. You may now disconnect.