Forrester Research 2026 Q2 Earnings Call

Please go ahead. Thank you, hello, everyone.

Thanks for joining today's call. Earlier this afternoon, we issued our press release for the second quarter 2026. 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, Chris Finn, Chief Financial Officer. Carrie Johnson, our Chief Product Officer, and Christophe Favre, our 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, 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 previous calls, today we will be discussing our performance on an annual adjusted basis, which excludes items affecting comparability. While reporting on an annual adjusted 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. With that, I'll hand it over to George.

Thank you for joining Forrester's Q2 2026 investor call. I'll be covering the following themes before turning the call over to Chris Finn, our Chief Financial Officer. 1, Forrester's second quarter performance and our outlook for the second half of the year. 2, recent AI research from Forrester. 3, our flagship B2B and CX events, which were held in the second quarter. And 4, an update on Forrester AI, including adoption and usage. Trends from the first quarter continued into the second quarter as we hit our key metrics. CV decreased 3% and wallet retention was flat. Client retention was down 1%, but client count increased in the quarter. Total revenue decreased 10%, with research revenue down 8% and non-CV businesses down 15%. Market uncertainty drove the consulting and events declines, along with our exit of the strategy consulting business earlier in the year.

Overall, our Q2 performance was aligned with our expectations, with consensus beats on revenue, margin, and EPS. Despite headwinds in our consulting and events businesses, we have confidence in attaining our plan in the second half of the year. We continue to be laser-focused on achieving CV growth in 2026, and we are maintaining our revenue, margin, and EPS guidance for the full year. AI technology continues to evolve at fast rates, stimulating our clients' need for guidance. In the quarter, we produced hundreds of new AI research frameworks, models, benchmarks, and technology blueprints, and I wanted to quickly reference a few here to give investors a window into how we are helping our clients. Forrester is creating a series of reports outlining how high-level corporate roles will be changed in the AI era.

In Q2, we released three: the AI CIO, the AI CMO, and the AI Chief Information Security Officer. The AI CIO report envisions a world in which the CIO is managing a new way to develop software and a corporate environment where tasks are to be performed by autonomous agents overseen by human intelligence that will be continually curating and managing outputs. In this world, the CIO will have four new roles. 1, architecting enterprise decision-making. Agents will make decisions, and the CIO must guarantee 24-hour availability to the company. 2, governor of autonomous systems. Agents will fail. The CIO must navigate the risk and contain the damage. 3, economist of AI value. AI will be expensive to operate. The CIO must manage costs and calculate the trade-offs between agentic and human work. Finally, 4, teacher. Boards of directors are accustomed to deterministic reporting.

AI yields probabilistic outputs, and the CIO must be continually educating the corporation on the risks and opportunities afforded by this approach. A narrative has emerged that companies will not need CIOs and IT in the future. Our report rejects this view, asserting that agentic AI will present serious risks and vulnerabilities in large organizations. Firm but opportunistic centralized management of technology will be critical to maintain operations in companies as the Wild West of AI computing unfolds. Another fascinating report from the quarter revealed the state of artificial intelligence within marketing agencies in the U.S. AI is now pervasive across U.S. marketing agencies, with nine of the 10 top agencies using generative AI and 50% using agentic AI for marketing execution. AI is deployed to ideate creative concepts and prep for pitches, aggregate and assemble strategic insights, and summarize media insights and reporting.

Google is the number 1 AI provider to the agencies, with Adobe at number 2 in the generative AI space and Anthropic at number 2 for agentic. These three vendors have displaced OpenAI. As is typical in the early days of AI, the agency industry is deploying the technology to increase productivity and drive cost efficiency, not for increased market effectiveness, creativity, and long-term brand growth for their customers. Forrester's research remains ahead of the market, impervious to faddish narratives, and unafraid to pop bubbles and take iconoclastic stands. Our clients are making multimillion-dollar decisions. They rely on Forrester's objectivity and research-based analysis to ensure that they are making the right decisions. Turning now to events. At our B2B Summit North America in Phoenix, our largest yearly event, we explored the tectonic shifts underway in how B2B companies sell and promote their products. Forrester calls this the go-to-market singularity.

The event was a clearing call to B2B leaders across marketing, sales, customer success, and product functions to discard outmoded go-to-market practices and embrace a new, augmented, resilient, and collaborative GTM approach that will capture AI-centric customers and generate revenue growth. Despite years of volatility driven by changing customer behavior, most B2B firms have failed to change how they engage with buyers. They are clinging to ineffective marketing practices such as mass emailing, marketing qualified lead obsession, gated content, and siloed teams. AI is quickly destroying these practices as it transforms buyer journeys and continues to shift power away from sellers toward buyers. As the GTM singularity unfolds, B2B firms must augment sales and marketing efforts with agents, respond to customer shifts faster, and better align marketing, sales, and product groups to act in unison.

A singularity change that is happening right now is what Forrester calls the visibility vacuum. As SEO and search decline, customers are going dark, making it impossible to gather buying signals from customers and increasing the need to adopt some form of answer engine optimization. The B2B summit saw a 9% year-over-year increase of attendees. We had 1,400 attendees, 59 sponsors, and 110 sessions. We estimate the summit influenced approximately $3.5 million of contract value bookings. Customer experience forums were held in New York City, San Francisco, and Amsterdam in the second quarter. At the forums, we unveiled Forrester's updated Total Experience score. The TX score debuted in 2025, a unique metric that combines the customer experience and brand experience of large companies to accurately forecast the growth potential of those firms.

Added this year was a third component, employee experience, yielding a more complete view of where companies are tracking. The TX score places companies in four groups based on our data: leading, plateauing, lagging, and churning. Our 2026 global Total Experience score rankings of 375 brands evaluated companies across Asia-Pacific, Europe, and North America in 10 vertical markets. Looking at the U.S. automobile market, Honda was dominant in the leader category, Tesla was plateauing, Chrysler lagging, and GM churning. Overall, 41% of the organizations measured improved their scores from 2025, while only 3% declined. The Amsterdam and New York CX forums were sold out. Turning now to developments in Forrester AI. In Q2, we announced the Forrester AI agent for Microsoft Copilot, enabling clients to access trusted Forrester research and guidance directly from their Microsoft workflows.

This announcement follows Forrester's integration of Forrester AI into Microsoft Teams, continuing our efforts to make research available to our clients where they work. We are revolutionizing how clients engage with research and advisory firms. By the end of Q2, we had activated hundreds of accounts to access Forrester AI from Teams and Copilot. Forrester AI usage increased to new highs in the quarter, with total users up 33% in Q2 versus Q1 and up 69% year-over-year. Forrester AI prompts were up 58% in Q2 compared to Q1 and up 105% year-over-year. In Q2, Forrester AI eclipsed indexed search to become the dominant method used by Forrester Decisions clients to interact with our research database. We continue to work on integrating Forrester AI with other platforms, including Gemini, Claude, Slack, and others. Watch this space. I will now hand the call over to Chris Finn, our CFO, for more detailed financial analysis of the quarter.