Forrester Research (FORR) 2 Nov 222022 Q3 Earnings call transcript

Good day, and thank you for standing by. Welcome to Forrester's Third Quarter Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. Please be advised that today's conference is being recorded.

to Relations, conference Tyson like President to now Investor of Seely. would turn over the Vice I Please go ahead.

press third Thank you, this our Earlier joining today's for and hello, everyone. afternoon, Thanks we of XXXX. quarter for call. release the issued

find a the website can section. on our If you you one need copy, in Investors

a the Chairman will this Chief Finn. Chris Financial our Board update. call afternoon, CEO, Chris of financial open and this joined with go I'm by George then and follow Officer, George the afternoon into Colony, Forrester's We'll will and Q&A.

Chief We Carrie today Officer; have of Chief also Interim Q&A Sales the Elizabeth Johnson, the us Product with and Adelsberger our call. portion Officer, for

remind Words estimates or Before believes, Securities the identify call that plans, Private this forward-looking such anticipates, statements. Reform intends, are meaning expressions we these like will of Act as forward-looking of begin, Litigation to expects, XXXX. you to intended statements I'd similar contain within the

expectations the of These risks operations statements results statements. those on materially that based to and and set are plans be company's the different and cause activities forward-looking in uncertainties from involve could future forth and current

and with Factors discussed in filings otherwise. a as differ information, that events to and new obligation future the publicly undertakes company are or Securities forward-looking cause Exchange and reports could statements whether no our actual Commission, to the any results update result of

on an which with calls, be basis, Lastly, our today, adjusted previous our performance items will consistent affecting we excludes comparability. discussing

for and basis adjusted basis a provides believe reporting this that While appropriate is basis in we GAAP, comparison meaningful numbers reporting not discussion. on an accordance adjusted with a on an

these list in of can press numbers You adjusted our a items excluded release. detailed from find

George. hand that, with it I'll And to over

the cover thanks to to topics; joining of our two Decisions I Thank our to want Forrester's research QX you, continued for in transition performance investor Forrester and platform. call. Today, QX Tyson you and all

to ability We macroeconomic the we a our confident commitments to investors annual good in remain results in deliver business, saw geopolitical on in our challenging environment. quarter. our Across and

grew two-point Margin which up revenue to value or per are X% overall, Forrester's compared quarter, and a share X% NCVI, third XX%, currency Net impacted headwind. the and Wallet year-over-year. contract XX% respectively. by three retention was increase, year-over-year, client XX% down In at percentage increased QX. is and is up earnings foreign points

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our are revenue for We guidance XXXX. reiterating

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software curtailed, will technology, be opportunity cloud and contracts. Tech optimize in productivity use innovation budgets sales their and outsourcing insight be this public While executives to spending should should generally protected. contracts, cybersecurity, tools agreements, customer digital

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was Overall for a the renewals the XXX% triple numbers. attendance MRC Event year. attendance level including year-over-year was grew and XXX% with strong coming up event for revenue up XX%, sponsorship

continue pandemic beat are from Events to and to recover on Forrester revenue. the XXXX track

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a now update. that, for turn with call financial Chris the Chris? And over to will I detailed

thank George, joining everyone, Thanks afternoon. you, and us for this

guidance line from with exceeding last the revenue call. we George guide in with financial EPS discussed, As had our quarter good and third our and margins results coming

in the are EPS manage I'll moments. P&L, to raising line more in and in beat margin a this quarter targets few continued ability costs margin the this discuss bottom we balance the year. our the Given and our of detail in for

across into future. drive business the quarter there the and to certainly While are end third was through focus execution our the performance to continue the of we on financial good, areas year

of laser-focused forward. a let quickly results at quarter, areas Before these touch me specifics level going getting the the what on on high we drove and the into remain

reiterate the are I George's quarter, up our positives. to into are with now $XXX of we very pleased want with transition Forrester over that third XX% seeing the start approaching Decisions CV I'll Through million Forrester makes we Decisions. the contribution. comments of

these hiring by Given on CV Forrester continue in to to the platform of numbers, Further, we make sales be having confident Decisions we one-third continue in progress the organization. within year-end.

headcount X% sales our quarter, basis. third year-over-year the up on a is Through

times, a terrific team done job the proactively Given management these uncertain managing the P&L. has of

our commitments entire our advisory their research, for the while team thank work on to to delivering top-tier and stakeholders, and also event clients. to all like experiences continued deliver services consulting Forrester our I'd financial to

our of and With we're some our facing said, we which business. of of are that addressing few which are headwinds, within some a control out

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clients transitioned, in those enrichment For spend. that have we're stronger their seeing account

continue within and selling combat longer issues. constraints to difficult sales environment, cycles budgetary the given we are implement these to initiatives we where clients, seeing However,

and sales These marketing include customer success, the sales alignment within force. resources and tighter within additional

are to year, out do team putting I'm Forrester today. to in work confident commitments the out but and the close have we We the

results some me for the Let to of specific third the turn quarter. now

of the GV of X% and driven Research mentioned, businesses. and As growth previously delivered in overall we quarter by X%, growth our revenue Events

as company, increase, year total compared just I the period, year-over-year in to for million in the Specifically, $XXX.X an we X% prior generated revenue $XXX.X million mentioned.

to the includes This approximate as FX. two an increased a quarter X% third CV. of XXXX point result the headwind in of from percentage Research growth compared revenues

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the declined was points down and one versus point two quarter prior to XX% wallet retention client to XX%. Specifically, retention

in declines, these term, short areas which specific to out. Regarding three may continue there are the call

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exited we our the highest last with quarter, whom of we number of As some quarter. reps ramp over continue ramping mentioned to third QX

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on period up same in XXXX. quarter, compared the for Specifically, headcount third we to the XX% were

for XX.X% in revenue of by outstanding of Interest in increased XXXX. This Operating third lower as was $XX.X the XX.X% of to was million third quarter million to $X.X quarter of the compared expense compared reduction in the million income by revenue to XXXX. XX% or current million quarter $X.X the quarter $XX.X or driven debt.

year share and per with compared compared $X.X to income increased net share at and income at of $XX.X income of XX% quarter net third the increased with EPS net the $X.XX earnings of Finally, per $X.XX of QX last in XXXX. earnings million XX% current quarter for and million

capital million operating quarter. as the $XXX.X million, exited million our cash were and we investments and in Looking structure, flow capital cash $XX.X activities $X.X resulting expenditures at of third year-to-date was and

stock or outstanding approximately There debt repurchase buybacks debt and of were million stock leaving quarter, no our million with of authorization intact. this $XX $XX payments us

final are I'll well the to look thoughts as now XXXX. through start as some as the what we expecting over at we you high-level of walk year quarter

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expect business, and flat Consulting to full be both year. the in we our fourth growth the quarter For for essentially revenue

approximately the we the quarter by expect business, increase increase to full we fourth expect to XX% XXX% Event our revenues Finally, year previous XXXX. year, by revenues to and Events approximately to to XXX% XX% for to compared compared for

year, approximately those to to the for the full the to $XXX fourth $XXX And of million $XXX $XXX quarter. revenue all continue million we expect full Putting be to total revenue million. factors expect business, together, we million for in total

to X% X% full In terms have of ongoing XX% we XXXX, basis quarter other to XX raised cost guidance, controls. in our our and by fourth be margin points of given margin the operating operating XX% expect year be to to

of expect year. $X.X the We continue to expense for interest million

In fourth XXXX, for full tax year continue of we and to quarter XX%. expect of the an rate the effective

the fourth the $X.XX. to to quarter, EPS for Finally, expect be range of $X.XX our we adjusted in

our on which be guide. third upside to our bottom both manage on to we the the EPS the previous full adjusted EPS of the end top in to now $X.XX, our the increase P&L, of expect compared range and Given range to in and is the an year $X.XX quarter ability $X.XX of

in months, Looking beyond of about winter and we headwinds we as These the COVID's headwinds. an expect impact ongoing to XXXX, macroeconomic continue rate remain. into concerns include many head continued currency war to increased the interest environment QX into Europe, and the

seeing these headcount believe sales our recession we growth a Forrester in of and challenges, in the Despite the expectations. strong likelihood Decisions there our are platform increase with the a success is factors, gives these optimism us Given we in all XXXX. long-term

the confidence in us value our help to led Forrester our legacy Decisions. plans clients. for product products We and accelerate for This Decisions our migration can have drive has the Forrester to

announced metrics pressure And as key in acceleration additional for coming George our on we cause of dates the mentioned, end legacy the may some have quarters. our This sale products.

Forrester the strongly we faster our our to a of transition enhance However, platform long-term. client growth will Decisions in the that believe base

clients we uneven our will remain combination see to while to of platform, the long-term summarize, likely shareholders. product in are to customers environment drive due our value new of in macroeconomic and our the and we to To confident we P&L transition our the performance accelerated

on our provide QX on XXXX call. earnings commentary will more our outlook We for

that With will XXXX, our anything report quarters. that this affect match may the quarterly on to Finally, we meant we to some provide focus business. a yearly last our doing so. provided on on while we're pivot results running quarter we only have guidance will time, upcoming for be we our is commentary said, guidance basis. to and long-term will This that QX seeing continue providing outlook When our for

George I'll With closing that, the for call over to remarks. hand back

Thanks Chris.

I and the track ready Decisions Chris transition manage As to call, and discussed the on remains company Forrester recession. in through to is this the

unparalleled a is as position. Officer side there interest in Chief note, And the Sales

are excited take and next you finding next won't We call company the to year, leader can I'd moment this growth. who its like earnings era Since families all you of of until about a your take to have another wish safe and happy holidays. into

to entire hard their passion. for work the thank team I Forrester also want and

are that Forrester that and are dedicated dedicated Forrester. rights our means clients to to our clients,

we questions. Thank you will to the now and take for listening call,

[Operator Instructions] Nicholas, first Andrew Blair. question comes Our from William

open. line Your is

slowing. a different you growth quarter, last you, for reasons quarter, Last afternoon. good CV cited Hi, few

new attrition bit I'm your it on-plan me of has abated it but seems that think it sales like was in some like, seems little quota-carrying a slowness wrong, in correct I headcount. hiring reps, and if terms in

also to wanted I other But ask just two. the on

all? You they about on normal they quarter? than they get any holder improved? hood than a worse trying aspects. rates moderated those for sense were at lower under Are three going to Have talked Just conversion what's turnover. last on seat a those bit higher Have the dynamics today and

the but XX near the short with mid-low of platform, retention It's term to issues key to a remarks, question. metrics, obviously base they're decline on retention, going of accelerated think terms those long-term the to along a in FD in term continue prepared that Chris. to retention It's of noted with transition the due to legacy wallet in remain expect XX-plus as the but you Andrew. the macroeconomic especially Thanks percent. Yes, in so we Yes. the target low the in we good slowdown and XXs, to client the

with to And the of through the enter issues the by we capacity the then end finally, our are front, as bulk two-thirds we XXXX, expect I product we hiring. on you're the right transition in with largest And think constraint of part CV of account platform through tie of the the least at XXXX. those FD sales

sales We force right ramped. are at about now our essentially XX% is of

So, we reps, sell some through we're the bulk of ramp but it.

with well cycles we've we've seen really as pressure so war the been the the here. issues it's some challenges as And Europe to of and around seen client just in macroeconomic over especially transition where market, in along some sales certainly and FD the elongated that internationally with

Thank Understood. you.

In maintaining full terms of results, and even like third quarter year guidance outlook. looks revenue obviously, despite

costs. coming You your talked think are in to like in manage higher seems margins. on I release, about your a you ability It bit

future cost Can growth quarter? cutting you of bit to you concerns and not want the whether primary a your impeding into about heading where savings years. speak or have expectations sense that you're relative get areas to just I in for any a to the back

question. good a that's Yes,

we some QX looking the started on key outlook of metrics. belt the then the at in economy since essentially here, have the our and are, We slowdown to tighten

around Obviously, investment long-term. was like we noncritical areas as headcount in to year making the we're still scale it's us, hiring. pull well, business including back on also been This investments for on areas an help the for T&E,

and and check certainly, to EPPS in in that have. margins been the profitability out areas develop a But throw few always be order in control to and continue to we've obviously, to able we able cash

going very is we'll with continue our the going monitor the and to in closely expense do continue on. forward economy, to move monitor outlook as topline that, look, the and on how And base conjunction to we're we to we're

and one queue. And question more if back the get I'll then in Great. could I add then you. Thank

of In are that underperforming industries, client even are in others any or retention, or standouts. that rest wallet terms particular, there retention are the

Just interested there.

helpful, that being Europe if would color terms provide And performance. then I could you. But be Thank too. of geographical drag think any dispersion mentioned in there primary you in you that there's the other

that I'll small we've retention rates around in obviously can pressure really But some where make attention. Carrie been chime Yes, tech the maybe well as and it's well. comment clients then seen of and Yes. around a

transitioned great there once But and just to seen improved larger are the FD. to enrichment obviously clients over rates emphasize, as well. as We've again, retention

So comment want do Carrie, us. that's been you to excellent working for on?

Andrew, just it's Yes, I'll say, Carrie.

sort tale would and see It want to sort growth Just a a expected. fueling of of higher that. is we front. of really echo the is retentions on what rates that They're two are customers running we convert, us. actually for to When than

And the economic see there. customers up tip then, we dries some funding product of single smaller tough type, on yes, and it's who kind maybe hamster some challenges of

private funding particular. of in Model and equity venture

lot. a Thanks Understood.

comes Our Sidoti. question from Anja Soderstrom next with

open. line Your is

Thank for quarter. the on taking you Hi. my Congratulations question.

follow-up you retaining tech as do you time ones? opportunity just client In and smaller terms are you the with seems like It higher, of, better that on larger a clients the and larger expansion the having an the retention. a clients have saw

Thanks strategy results with platform into their That midyear base. to see teams and Hey pleased get here Decisions and again, seats start primary the contract around we a adding Carrie. Forrester of for customers XX it's enrichment already the for gives question. the for peers. Forrester as very the their us And is services enrich Decisions our Anja, that quickly new contract of

customers your answer where a have in that growth to once seeing new the the growth. there of question, of us And converted front So, yes, to lot platform. we is we're also, we've

as the of key $XXX CV designed areas plus cross-sell was of and remarks, million today. across is add was XX the to to the opportunities of and too. And way the upsell five FD contribution personas. product advantage the approaching with the take design just product done this the Anja, We've to, our of And in XX% we Yes. it, we're I'd talked on

happy very seeing we're that going base. that And the of with FD expectation as advantage move is and we forward our that to continue we're So, take grow we're there. to recent that

Andy, they XB+ you have all As billion than know, we companies, of because $X XX our are is go The reason executives we revenue. primary call what of staff. companies with clients more those on there

ratio where again, So, be. that's the will

Okay. do didn't of of that new do And brings also, Kelly how in sales, sort person positive that in you. opportunities that along? a might of that coming And what there for how hiring what is head terms a you maybe have, see Thank you, on you. be

Anja. Thanks, Yes. Yes.

in we've seen, has the remarks, So we focused specific as around in businesses interest CV spoken CSO are billion. noted market $X growing on of that in experience far from candidate doubling the George scale great that process so the the search, the good. we've to the models, We're are really in to deep ARR candidates and managing

marketplace Clearly, year. as and the by FD we get Forrester that full in platform us role it's of the for a organization look unlock of good in to end of CV our the two-thirds to for the the potential Decisions next

And announce to we'll QX do be we rather. soon it. in happy And QX by so we to role or there, news in have anticipate the as have as someone

driven cross-sell, understand And I model, think we're CV specifically how in they selling and understand well-disciplined market, insight. businesses on solution sales And who experience, they scaled do like understand by looking to metrics focused our upsell and for works, has our are a organization really they with how someone driving essentially models. ours

here. phase next excellent, take the just growth. she us force going four was double something We're in of the we're for next years. us But size Kelly of through looking And sales the got to

again, good have very from, for of going job new into is, lot some we the this So, candidates. a interest territory very, in we're And us. a and

very this. about we're So, excited

just in Okay. developed given the general, And has environment within how speed? how you that. you're hiring do

you're The asking? environment for hiring

Yes.

absolutely. Yes, I think,

Yes. Yes. Definitely.

approximately attrition down Our to rates are XX%.

seeing definitely our definitely and candidate are the actually hire And time better are well. to improving we is better We on as flow. front hiring getting

you. Thank Okay. all for me. That was

Anja. you, Thank

Colicchio next from with Our Barrington. comes question Vincent

line Your open. is

together, to exposure should side? clients. sense economy funding with clients, large there? I tech small at, new guys. quarter, clients your how we and any that Curious, on included concerned for new assume tech of some And look small sort we Yes. there's If exposure how about your economy is be issues Good overlap

You said small tech companies and what?

I'm economy exposure you saying how clients, to new small I overlap of companies. that type I'm VC-funded with assume some have tech. there's much curious

combine you those two together, So, your exposure? if large is groups how

Yes.

that as from So, small clients. wouldn't kind And the material some we any exposure as we're anything? perspective, it sales we're business. the certainly, there. characterize a stories organization in definitely exposure But they But certainly material. seeing, come losing have George, the I there. those way. are definitely of I I wouldn't in mean it there's where some tech VC characterize backed into

our large lot mean who fringe for Yes, we portfolio companies crypto don't of are fringe technology FinTechs. even or I is, in companies have corporations. these are a this building

again, the So small mainly are but there in tech short, companies. it's some few

XXXX? you maybe for at range this frame point, force growth sales Can a for expectations

Yes.

year. in with let's next So, growth won't of we're have expect to We're share. start but and the double-digit going that I for in static this would this scenarios, I it's that will our year, sales range. year into going planning And we doing guarantee the reps. grow that double-digits process

the through our be sales sure. situation definitely so have get how But see organization the we growing macroeconomic to and and for out issue We this quarter scenarios play see will is. how

the new I productivity. to lot a Head of of will think opportunity improve Yes. Sales, Vince, have

we good very that into. so could capacity some And there, tap which have we

year, We probably at next will definitely grow not rate. but the same

Yes, Yes. correct. that's

it's on change curious, versus meaningful a the worsen And slowing, quarter? quarter say by cycles it And the sales month? last as would I'm you progressed then did

I a It quarter up been that's been in three the really has year. throughout trends. pop just that's didn't long-term. ongoing think QX. This the Obviously,

gentlemen. thanks quarter. Okay. Nice

Vince. Thanks

questions time. at to further management turn remarks. any I'd like the I'm back closing this any to for call And not showing

call. evening Myself be Tyson, follow-up available Thanks calls. this is this and the on everyone, and team Chris for us for can joining the

today. Thank out calling to reach you. please So, for if you'd in me you like. Thank

today's gentlemen, Ladies conclude and presentation. this does

a have You wonderful day. now disconnect may and