Good afternoon, and thank you for standing by. Welcome to Forrester's Second Quarter 2024 Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to turn the conference over to Vice President of Corporate Development and Investor Relations, Ed Bryce Morris. Please go ahead.

Thank you. And hello, everyone. Thanks for joining today's call. Earlier this afternoon, we issued our press release for the second quarter 2024. If you need a copy, you can find one on our website in the Investors section. Here with us today to discuss our results are George Colony, Forrester's Chief Executive Officer and Chairman; and Chris Finn, Chief Financial Officer. Carrie Johnson, our Chief Product Officer; and Nate Swan, Chief Sales Officer, are also here with us for the Q&A section of the call. 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. Factors that could cause actual results to differ are discussed in our reports and filings with the Securities and Exchange Commission. And the company undertakes no obligation to publicly update any forward-looking statements whether as a result of new information, future events or otherwise. Lastly, consistent with our previous calls, today we will be discussing our performance on an unadjusted basis, which excludes items affecting comparability. While reporting on an unadjusted basis is not in accordance with GAAP, we believe that reporting numbers on this adjusted basis provides a meaningful comparison and an appropriate basis for our discussion. You can find a detailed list of items excluded from these adjusted results in our press release. And with that, I'll hand it over to George.

Thank you, Ed. And I'd like to welcome everyone to Forrester's second quarter 2024 investor call. I will cover the following four themes before turning the call over to Chris Finn for our financial update. Number one, Forrester's Q2 financial performance; two, Forrester Decisions and the enhancements we're making to the product; three, our second quarter events; and four, changes in Forrester's management team and Board. Turning first to second quarter performance. While total contract value or CV showed a decrease of 3%, we beat our CV bookings plan in the quarter, representing growth of 5% year-over-year. These results were driven by improved renewal rates of Forrester Decisions, a greater-than-expected volume of cross-sell deals, and improving new business flow from both vendor and enterprise user clients. As a result, wallet retention increased by one point to 89%. Despite positive movement in contract value bookings, Q2 revenue was down 10% year-over-year, primarily driven by underperformance in our Events and Consulting businesses. We continue to stay on track converting contract value over to Forrester Decisions. In Q2, 73% of our CV was in Forrester Decisions, up from 70% at the end of Q1. We remain on plan to hit our target of 80% of CV in Forrester Decisions by year-end. As contracts convert, we are seeing an increase in the percentage of deals that are multiyear. 68% of FD contract value is now two or more years in length. These longer terms make sense for clients as their initiatives and transformation projects span a series of years. For Forrester, multiyear deals are beneficial as they renew at higher rates and give the company a more predictable flow of revenue. Our long-term goal is to move 80% of our FD research contracts to multiyear. We are becoming increasingly confident that our research CV…

Thanks, George, and good afternoon, everyone. We saw positive signs in our CV business in the second quarter as CV bookings exceeded our plan, revenue performed in line with expectations, and retention metrics improved modestly from Q1. However, the non-CV portion of the business continues to be challenged. Our Events business underperformed in what is our largest Events quarter, and the headwinds we have seen in Consulting continue. Although we believe these headwinds are transitory in nature, the challenges of our non-CV businesses have led us to lower our financial guidance for the year. Despite the mixed results, we are encouraged by the continuation of positive trends in our CV business from Q1 into Q2, including reaching 73% of CV in Forrester Decisions, an ever-growing contribution of multiyear deals, and the ongoing improvements in our retention metrics. Our continued go-to market work involving sales, marketing and customer success is starting to pay dividends from a pipeline, new business and renewal perspective. This gives us renewed confidence in our ability to deliver flat to slightly positive CV performance by year-end. CV declined 3% in Q2, a slight improvement from the 4% decline in Q1. And overall revenue decreased 10%. For the total company, we generated $121.8 million in revenue, compared to $135.6 million in the prior-year period. In terms of our revenue breakdown for the quarter, research revenues decreased 5% compared to the second quarter of 2023, with revenue from our subscription research products down 1%, coupled with declines in our reprint and our other smaller and discontinued products. Overall client retention of 73% and wallet retention of 89% improved slightly compared to Q1, while Forrester Decisions specific client retention of 81% was down slightly and wallet retention of 90% improved versus the first quarter. As we complete the Forrester Decisions…

Thank you, Chris. Before we go to Q&A, I'd like to reiterate the main themes. Number one, our CV business is stabilizing. Number two, the Forrester Decisions transition is on track, and we expect it to be complete by year-end. Three, there were a number of product innovations, led by Izola. Four, Events in Q2 scored well in content but fell short in sponsorships. And five, two excellent new members have joined the Forrester Board. Thank you for listening, and I will now hand the call over to the operator for Q&A.

[Operator Instructions] And I show our first question comes from the line of Anja Soderstrom from Sidoti. Please go ahead.

Hi. Thank you for taking my questions. You have a lot of internal transitions going on this year. So how dependent are you in the macro environment to improve to show some revenue growth in 2025?

Your question was, are we looking for macro to change?

Yes. How dependent are you for that to change, given you're transitioning and the expansion you have with existing clients -- seems like you have a lot of internal things going on that could help you in 2025. So how dependent are you on also the macro environment improving?

I think somewhat, I mean, this is going through a transition like this, Anja, has been -- it's always difficult, but doing it in this economic environment has made it much more challenging. That being said, I think there are glimmers around the edges. I know on our Board meeting there was talk about the U.S. looking better, Europe looking maybe a little bit worse. But I think we're going to see some rate cuts here in the second half of the year, and I know Chris has stronger views than I do on this. But some rate cuts in the second half of the year and early in 2025. And that's going to -- I think that's going to help the general economy. It's going to help us. That's my...

Yes. I agree with that, George. I would think, in general, though, look, given this challenging environment, I don't think it's really changed significantly. I think it's still tough out there. But to your point, we're making a lot of addressing, a lot of issues on our end, and the work that the go-to market team and Nate and the sales organization has made, I think, are helping tremendously. We're starting to see some of that positive result and positive results from a CV perspective. But it's early yet, and so -- but nothing that we're doing right now from a forecast perspective is relying on anything changing in the macro environment. I mean this is just continuing to delve into the issues and try to find growth where we can.

And the tech economy, Anja, is still recovering, no doubt about that, even the large -- for the large vendors.

Yes. And how is the government clearance coming along?

We feel very -- Anja, it's Nate. We feel very confident in our plan with the government. We're seeing, not just U.S. but around the world, we have opportunity to earn that business. It's obviously a big quarter in the U.S. for the federal government in Q3. Feel like we're well positioned and are expecting big things from that team this quarter. So really excited, and excited about what we're seeing across government around the world.

We're hearing from government teams, Anja, that they want an alternative in the research space. And so we've been engaging on that.

Okay. Sounds exciting. And then in terms of the Events business, it seems like that was a bit of surprise maybe, mostly on the sponsorship side. What are you hearing there? And what do you think the reason is for that? And what kind of initiatives are you taking for next year to improve that?

I'll take that. Anja, it's Carrie. The sponsorship business, as you can imagine, is 100% tied to the high-tech industry. And as we saw companies look to get more value out of, obviously, what we talked about as already a very good event, I think we struggled a bit to react to a more challenging sales environment there, more of a solution sell on that event, similar to what we've seen in the sort of core Forrester business. We do have new leadership in our event sales sponsorship business that has -- this leader has an outstanding track record of elevating the skills needed of a sponsorship team. So we're confident that we can adjust to the changing market, and the new leadership will help us get there, especially based off the strengths of the events experience that we're offering.

And I show our next question comes from the line of Vincent Colicchio from Barrington Research. Please go ahead.

Yes. Nate, I'd like an update on how you're feeling about the sales force. There's was a drop in the number of -- total number of salespeople in the quarter. Wondering if that's involuntary and then just wondering if you feel like you've got a strong, balanced sales force, or if the strength there is more concentrated in a few members.

Yes, Vince. Great question. Thanks very much. Feel very good about the progress that we're making with the sales force. So we really focused in Q2, we had three specific messages that we were working on with the sales organization, building pipeline, number one. Rolling out our retention process across the organization, so lots of great work across the Forrester ecosystem, including customer success, the sales organization and the analyst community, to make sure we were delivering for our clients and get an operational retention system in place and structured. And then finally, we've rolled out our Forrester sales process to make sure that we are consistently working with more senior-level executives and connecting with them on the issues and initiatives that they're working on. All three of those, it was a lot of work, across the sales and sales operations, customer success, and really across Forrester, are operating really well. Very pleased with the progress that we've made. Pipelines are improving. We saw a 30% improvement in-quarter of our pipelines. We need to just convert that to growth. But the first step is actually getting it into the pipeline. So feel really good about that. The sales headcount is just normal attrition. We are stepping into our performance management. We hire really good people into the sales organization. We're trying to bring them back into the organization if they're not performing. And then some people will choose to opt out if it's not the place that they want to be. But our intention with our performance management program is to manage people back into the business and help them be successful. So we've been doing that. We're seeing a little bit higher attrition than we did in 2023, but that was expected going into this year. So, nothing outside of the plan. And we'll continue to bring in head count where we see a really good opportunity. So the plan is staying steady with that single-digit headcount growth throughout this year. So anything else I can clarify?

Good candidates on the street though, right?

That's a great point, George. We have seen some really good candidates. I know several of my regions have been commenting about the high quality that we're seeing coming into the organization, which is a big change from a couple of years ago where it was really difficult to find high-end talent.

Very helpful color. It was nice to see CV stabilize. And Chris, you had mentioned the outlook for CV in the next two quarters. I missed that. Did you say flat to up slightly?

Yes. Well, for the full year, Vince, we expect CV to be flat to slightly up as we continue through the migration. We're confident in getting to 80% plus of our CV to be in FD by the end of the year. And from a heritage perspective, I mean, we're less than 12% at this point on heritage, and we're continuing to drive migration pretty significantly. And then for the high-risk portion, that sub-50, I mean, we're less than 4% at this point. And we expect overall heritage in general by the end of the year to be less than 5%. So we are really on track to be fully through the migration effort by the end of the year.

Yes. And Vince, the sub-50 is small vendors, below $50 million in revenue.

Yes.

And George, are you seeing the effectiveness of Izola, it sounds impressive, helping spur additional sales of seats?

I'll jump in on this, Vince. I wouldn't say we can say there is a quantified number based on what we see with Izola, but our clients like it. We have a lot of valuable research, so to be able to cut through to exactly what they're looking for, it helps. We want people to access, use and come back. So the quicker they can get that, the more likely they are to engage with Forrester. Our sales people love to be prepared with it. So they go out to a meeting with a client and they use Izola to help prep on some of the issues and show how it can help them. And then, frankly, we've gotten a lot of clients that have come back to us and said, "Hey, we really like how you've done this within your business. We'd actually like to talk to your product tech team as to how did they actually make that happen so quickly." So we're seeing some really good signs from our clients and prospects that this is helping them. They're really interested in how we did this and made it work so quickly.

One thing I'll add, Vince, it's Carrie, is, as a reminder, Izola is only available to customers in Forrester Decisions and Forrester Market Insights, so the new portfolio. So it's also helping our sales discussions from a migration perspective. It's not available to our heritage clients.

I think what's interesting, Vince, is that some of the heritage clients are saying, "Hey, can we get Izola with the heritage product?" And we're saying, no, you cannot. But the fact that they're even asking for it is a great sign.

And one last one. Chris, should we expect you to be proactive on the buyback activity in the second half?

Yes. We're going to absolutely continue to look to be opportunistic about buybacks for the rest of the year as we watch performance closely, and that hasn't changed.

I'm showing no further questions in the queue. At this time, I would like to turn the conference back to Chris Finn, CFO, for closing remarks.

Yes. I'd like to just thank everybody for joining us today. Any follow-up questions, please contact Ed and myself. Thank you very much.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.