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Introduction & Market Context
Forrester Research Inc (NASDAQ:FORR) presented its Q2 2025 investor slides on July 31, 2025, revealing continued revenue challenges across all business segments while emphasizing its strategic transformation and long-term market opportunity. The research and advisory firm, which serves 61% of Fortune 100 companies, is navigating a challenging business environment while positioning itself as a leader in AI research.
As shown in the following overview of Forrester’s business profile:
The company maintains a global presence with approximately 1,500 employees across Asia Pacific, Europe, and North America. In 2024, research accounted for approximately 73% of total revenue, while consulting and events made up the remaining 27%. The company reported that about 80% of its contract value is now in its flagship Forrester Decisions platform, with adjusted EBITDA of $46.1 million for 2024.
Quarterly Performance Highlights
Forrester’s Q2 2025 financial results showed declines across all key metrics compared to the previous year. Consolidated revenue fell 8% year-over-year to $111.7 million, with research revenue declining 7%, consulting revenue down 5%, and event revenue dropping 23%. The company’s adjusted operating margin contracted by 250 basis points to 12.2%, while adjusted EPS decreased 25% to $0.51.
The financial summary for Q2 2025 is illustrated in the following slide:
These results align with the trend observed in Q1 2025, where the company reported an EPS of $0.11 (beating forecasts of $0.08) but missed revenue expectations with $89.9 million against a forecast of $90.27 million.
Contract value (CV), a key metric for Forrester’s business, continued its downward trend, reaching $288.7 million in Q2 2025 compared to $311.9 million in Q2 2024 and $325.1 million in Q2 2023. Wallet retention, which measures the proportion of contract value retained from existing clients, declined to 85% from 88% a year earlier.
The following chart illustrates the CV and wallet retention trends over the past nine quarters:
Similarly, Forrester’s client count has been steadily decreasing, from 2,052 clients in Q2 2024 to 1,806 in Q2 2025, representing a 12% year-over-year decline. However, client retention has remained relatively stable at 74%, suggesting that while the company is losing clients, it’s maintaining relationships with its core customer base.
Strategic Initiatives
Despite the challenging financial results, Forrester continues to emphasize its strategic transformation centered around the Forrester Decisions platform. The company has been on a multi-year journey to pivot its business model, as illustrated in this transformation timeline:
The transformation began with the acquisition of SiriusDecisions in 2019 and has progressed through the development and rollout of the Forrester Decisions platform, which now represents approximately 80% of the company’s contract value. The company has established a customer experience function, invested in product management and digital delivery, and put new sales leadership in place to drive contract value growth.
Forrester positions its continuous guidance model as a unique alternative to traditional library and consulting models, focusing on customer-centricity and expert guidance:
The company highlights the substantial market opportunity available, estimating the total addressable research market at $115 billion:
Detailed Financial Analysis
Looking at Forrester’s research revenue trends, which represent the largest portion of the company’s business, there has been a general downward trajectory over the past nine quarters, with Q2 2025 research revenue of $77.9 million representing a 7% decline from the $83.7 million reported in Q2 2024:
Consulting and event revenues have also shown declining trends. Consulting revenue in Q2 2025 was $23.5 million, down 5% from $24.8 million in Q2 2024, while event revenue fell 23% to $10.2 million from $13.4 million in the same period last year.
Forrester’s full-year 2024 financial results, shown below, provide context for the company’s current performance trajectory:
The 2024 results showed a 10% year-over-year decline in consolidated revenue to $432.5 million, with research revenue down 5%, consulting revenue down 18%, and event revenue down 34%. Adjusted operating margin contracted by 197 basis points to 8.9%, and adjusted EPS fell 23% to $1.47.
Forward-Looking Statements
For the full year 2025, Forrester provided the following guidance:
The company expects revenue between $400 million and $410 million, representing a decline of 5% to 8% compared to 2024. Adjusted operating margin is projected to be between 8.0% and 9.0%, which could represent a slight improvement from the 8.9% reported in 2024. Adjusted EPS is expected to be between $1.20 and $1.35, down 8% to 18% year-over-year.
This guidance is slightly more conservative than what was mentioned in the Q1 2025 earnings report, which projected revenue between $400 million and $415 million, suggesting a modest downward adjustment in expectations.
Despite the financial challenges, Forrester emphasizes the value proposition of its Forrester Decisions platform, citing impressive ROI metrics from a Total (EPA:TTEF) Economic Impact study:
According to this study, a composite organization investing $710,000 in Forrester Decisions experienced $2.54 million in benefits over three years, resulting in a net present value of $1.83 million and an ROI of 259%.
The company also showcases specific client success stories to demonstrate the tangible impact of its services:
These case studies highlight significant business outcomes, including a 12% increase in digitally active banking clients, revenue 140% over target projections for an insurance company, and $1.5 billion in total opportunity value for a printing and imaging company.
As Forrester navigates its ongoing transformation in a challenging market environment, the company’s stock has remained under pressure, trading near $9.70, well below its 52-week high of $20.28. The company’s leadership team, led by CEO George Colony, continues to position Forrester as a leader in AI research while implementing strategic initiatives to return to growth.
Full presentation:
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