Good afternoon and thank you for joining today's call. With me today are George Colony, Forrester's Chairman of the Board and CEO; Carrie Johnson, Forrester's Chief Research Officer; and Mike Doyle, Forrester's Chief Financial Officer. George will open the call, Carrie will follow George to discuss the research and Mike Doyle will discuss our financials. Kelley Hippler, Forrester's Chief Sales Officer, will join the presenters, and we will then open the call for Q&A. A replay of this call will be available until June 7, 2020 and can be accessed by dialing (855) 859-2056, (440) 453-73406. Please reference the conference ID 7788755. 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 expect, believe, anticipate, intend, 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 obligations to update publicly any forward-looking statement, whether as a result of new information, future events or otherwise. I'll now hand the call over to George Colony.

Thank you for listening in on the Forrester Q1 2020 call. We're going to switch it up for this call. I've invited Carrie Johnson, Forrester's Chief Research Officer to update investors on our product strategy. So I'm going to kick-it-off, then hand the call over to Carrie for her remarks, and then we're going to hear from CFO, Mike Doyle, who will give a financial review for the quarter. Carrie, myself and Mike will be joined by Kelley Hippler, Chief Sales Officer for questions and answers. Now a few points to start. Number one, Forrester will manage its way through this economic moment, whatever it may bring. Two, the pandemic will accelerate the need for all companies to build customer-obsessed digital capabilities and that's Forester's focus. And finally, three, Forrester will emerge stronger from this recession given its expertise in customer experience, employee experience, digital transformation and building high-performing revenue engine. Now much has changed since our last quarterly call in February. At that time, I reported that the year was launching as planned however, the pandemic began to impact the economy in early March, changing the vector of Forrester's business for the quarter and for the year. We concluded the first quarter slightly below revenue guidance while still growing by 2% year-over-year. We dramatically exceeded our EPS target, but this was due primarily to cost reductions in March. Forrester has been working remotely since mid-March, and I'm happy to report that we have made the transition quickly and seamlessly. Our technology stack has performed admirably and our collaboration across the company and with clients has moved forward unimpeded. We feel very fortunate to be a company that can operate at near-peak levels while still being remote. Now that said, the pandemic and the economic downturn will impact Forrester in…

Thank you, George, and good afternoon, everyone. As a quick introduction to me, I'm coming up on 22 years at Forrester, where I've served nearly every role in the research organization, including 10 years as an analyst covering digital retailing. I then went on to lead research teams and the content portfolio for all of our research. I've been part of most strategic transformations of Forrester's business and I've led many clients through them as well, pivoting Forrester's research products and services in response to customers' needs. I'd like now to build on some of George's comments about engagement with our research. Although COVID-19 has negatively impacted businesses on a global scale, the pandemic has pushed many customers test transformations and initiatives into the spotlight for our clients. From remote employee and call center activation to digital transformation acceleration. Customer obsession right now is critical to survival for firms. Here are some examples of how our research and our events products are delivering high-value for clients and where we're seeing increased engagement levels. First, our research product. As George mentioned, this is truly proving to be a golden age for research. Our research teams have had a fast, coordinated response to COVID-19, publishing our first guide to pandemic planning back in early March. Our security and risk team first wrote this pandemic research 10 years ago. Our expertise and experience is very deep here. We also launched a first of its kind employee experience survey that we feel that every two weeks to take the pulse of business employees worldwide as they cope with this pandemic. We've used our new digital platform as a hub to publish short-form content daily that help our clients respond thoughtfully and quickly in critical areas like leadership, business continuity, customer experience, collaboration tech, virtual…

Thanks, Carrie. I'm now going to review Forrester's financial performance for the first quarter of 2020, including a look at our financial results, the balance sheet at March 31, our first quarter metrics, and the outlook for the second quarter and full year 2020. Please note that the income statement numbers are pro forma and exclude those items mentioned in our press release today. For the first quarter, Forrester delivered pro forma revenue below guidance. However, operating profit and earnings per share exceeded guidance. Though below expectations, revenue grew slightly for the quarter despite headwinds from the impact of COVID-19. Expenses were favorable expectations as we move quickly to contain costs, making reductions in bonuses and travel expense, which more than offset the revenue shortfall. As both George and Carrie mentioned, we are entering a very dynamic and changing business landscape as a result of the pandemic. Our clients are looking to us to help them navigate through these very challenging times. I do think this will create great opportunity for Forrester going forward. However, we will not be immune to the near-term macroeconomic impact of the pandemic. Many of our clients are feeling financial pressure on their businesses, and we see that in the form of deferred projects, reduced research due to the client layoffs and the impact of the pandemic on our Events business. Now let me turn to more detailed review of our first quarter results. First quarter revenue increased 2%, which was less than expected as we began to see the impact of COVID-19 on our business. We saw the impact begin earlier in the quarter in our Asia Pac business and later in the quarter in our North America and EMEA businesses. Despite that, research services grew 1% driven mainly by reprints, and our advisory…

[Operator Instructions] Your first question is from the line of Andrew Nicholas [William Blair & Company].

Hi good afternoon. Hope everyone's safe and healthy. Just wanted to start with a little bit more detail on the guidance. Just wondering what are you implying for the events business? I know that you said it was 25% of the guidance reduction, but are you expecting the rest of the year to be virtual? And if you could make any comment on what that profitability looks like, that would be helpful.

Yes. This is – Andrew, this is George. Kelley, you want to take that?

Yes. George, I'll tackle the profitability aspect of it and the guidance aspect of it, which may be better. Kelley?

Okay.

Sure. Thank you, Andrew, and thank you, George. So we are prepared to make a pivot to digital if we need to. As of right now, we do still have our full roster of events on the calendar, and we're going to continue to monitor the situation, but having built out this capability, we do now have the option. So I know as Mike had alluded to, and I'll let him follow-up. We have a couple of different scenarios that we've modeled out. So I'll let him address specifically, which is built into the revised guidance. So Mike, I'll throw it over to you.

Thanks. And thanks for the question, Andrew. The low end of our guidance reflects all of our events going virtual for the full year. And to give you some perspective on that, from a revenue standpoint, that drops revenue, probably we get about 20% – $0.20 on the dollar from a revenue perspective on that when we go virtual. And again, we're still learning this. To the points that Carrie made, we had a very strong showing with our virtual event and summit, and we're seeing the same as we come up on CX New York. So low-end reflects all virtual profitability on that. It compresses a significant amount particularly the summit is a very high-margin piece of business for us. And I would say it probably shrinks our margins down to about maybe the 10% range on the virtual events. But again, still profitable, and more importantly, I think George made the point, it keeps the brand in front of our clients, and it continues to build and helps us build for 2021.

Great. Thank you. That's helpful. And then you mentioned it in your prepared remarks, but retention and enrichment metrics ticked down a bit year-over-year and sequentially. Just wondering if you could give a bit more color on what drove those declines? Basically how much you might attribute to the pandemic or a slowdown in March specifically? And then if I can squeeze one more on top of that, if there's any material change to those metrics in terms of how they're trending in April?

Well, I'll give you the – sort of the number side of it, I'll let Kelley give some more color to it. I think and this was – we saw this in the last recession, particularly with smaller vendors, both in our business, but in particular with the legacy SD business we inherit. That absolutely impacts client count. Small vendors and actually small business create – tend to move very quickly out of – out of contracts that they're in because, frankly they're getting squeezed. So I think we're seeing churn in small clients, and that's accounting for it. And we're going to see those retention metrics because they're trailing 12 months, probably come down more before they start moving back up. So that's my quick and dirty perspective. Kelley, I don't know if you have more to add there.

Yes. No. I would agree with that, Mike. Thank you. And I would say from a timing perspective, Andrew, a lot of it was the back end of March, so probably not much of a surprise that the bulk of it was COVID related, and pipeline had been trending up in late February. And then with the shelter in place across Europe and then into North America, about the middle of March that definitely impacted the renewal retention rate, specifically in March in particular.

Awesome. Thank you. And then if you wouldn't mind, just one more. I think George, you mentioned in terms of revenue impact, there are clients in certain sectors that have had to cut budget, perhaps in some cases, pretty significantly. Is there any way for us to kind of size up your industry exposure, particularly as it relates to industries that are more directly challenged in this environment, hospitality, travel, recreation, that sort of thing? Thank you.

Yes. And good question, Andrew. Yes, it's about 10%, Andrew, in the most vulnerable category. That would be – the list I gave you with air, hotel, et cetera, about 10%.

Got it. Thank you.

And Andrew, a little color there. The challenge and the opportunity here is how many of those are going to – because they're so distressed they're going to migrate away, how many because they are and who desperately need a digital model will stick with us and find the funds. And I think that's what we'll – as the year progresses, we look to see how that plays out.

Makes sense.

Thanks Andrew.

Your next question is from Anja Soderstrom [Sidoti & Company].

Hi, everyone. I hope you're all doing well. A lot of my questions were already asked. But you mentioned the headcount is up, but I noticed the sales force is shrinking. Could you give some context around that?

Kelley, you want to take?

Sure.

I'll let Kelley give – go ahead, Kelley, jump in.

Okay. Anja, I hope that you're doing well. I think what you're seeing in the Q1 numbers is the impact from the attrition that we had back in 2019. So yes, in Q1, the head count was down. What I'm pleased to say is given the active recruiting that we've been doing, we've actually added more capacity to the sales force, and that will start to ramp as we get further into the year here. So those numbers will be going up sequentially as we have individuals coming off of ramp. Right now we have 94% capacity on our open territories, which is the highest it's been in over a year.

Okay. And how, I’m sorry, yes.

Anji, one other thing on headcount, because yes it was up and I will say that we took a number of measures to reduce costs, some of which we've identified. We also froze a lot of open head count but we have consciously chosen to continue to invest in sales. And to some degree, the analyst headcount, in part because, frankly, we see that – we think there's going to be – we're going to come out of this, and we need to be prepared as the second half of the year starts getting better to be able to capitalize on that. So we've consciously not cut headcount in the sales organization, the analyst area.

Okay. Thank you. And in terms of the hiring salespeople, has the current environment sort of impacted that in either positive or negative way?

So I would say in the current environment, we have been able to fill positions a little bit more quickly than we have been throughout the course of 2019. And I'm glad to say that we're close to full capacity right now and are focused on ramping up our new hires.

Okay. Thank you. That was all from me.

Thank you.

I'm showing no further questions at this time. I will now turn the call back to Mr. Doyle.

George, do you want to have some closing comments here?

No. Go ahead.

Okay. First, thanks, everyone for joining the call. We do hope that you are safe and healthy. We plan to be out there in the markets virtually. And if I could reinforce our major points here, we're going to manage our way through this. We've been through this before. I've been through some of the recessions with George, not the entire pieces, but we're going to find our way through this. I think we know how to do this. We know how to move quickly. We've positioned ourselves to be ready as the economy bounces back. We think the pandemic has exposed a lot of very weak digital models, which we are frankly, we think, in the best position to maintain. And we're going to come out stronger. We've got a great and very talented employee base, all of whom we've retained, and we're pretty excited about that. So we're looking forward to working through these challenges with our clients. So thanks very much.

And I would say that – George here, guys. Anyone out there who wants to meet with us via Zoom or Webex, we'd love to meet with you. And thank you for being on the call and everyone stay safe. Thank you.