Forrester Research, Inc. (FORR) - Q2 2026 10-Q Summary
Business Context and Reporting Period
This summary covers the quarterly report (Form 10-Q) for Forrester Research, Inc. for the period ended June 30, 2026. Forrester is a market research and advisory firm operating through three segments: Research, Consulting, and Events. The company is classified as an accelerated filer and a smaller reporting company.
Key Financial Metrics
| Metric | Three Months Ended June 30, 2026 | Six Months Ended June 30, 2026 |
|---|---|---|
| Total Revenues | $100.2 million | $185.7 million |
| Net Income (Loss) | $15.3 million | $(6.6) million |
| Operating Income (Loss) | $3.4 million | $(15.2) million |
| Diluted EPS | $0.78 | $(0.34) |
| Cash from Operations (6mo) | $25.0 million | |
| Cash & Marketable Investments | $130.8 million (as of June 30, 2026) | |
| Total Debt | $35.0 million (Revolving Credit Facility) | |
| Effective Tax Rate (6mo) | 58.4% (Benefit recorded due to non-deductible impairment) |
Material Changes vs. Prior Period
- Revenue Decline: Total revenues decreased 10% year-over-year (YoY) for the quarter and 8% for the six-month period. Research revenues fell 8% (QoQ) and 5% (6mo), while Consulting revenues dropped 15% (QoQ) and 14% (6mo) due to the discontinuation of strategy consulting sales.
- Profitability Volatility: The company reported a net income of $15.3 million for the quarter, driven by a significant income tax benefit of $12.3 million. However, the six-month period resulted in a net loss of $6.6 million, heavily impacted by a $10.8 million goodwill impairment charge recorded in Q1 2026.
- Restructuring: The company implemented an 8% workforce reduction in February 2026. Restructuring costs for the six months ended June 30, 2026, totaled $4.2 million.
- Debt Restructuring: In March 2026, the company amended its credit facility, extending the maturity to March 2029 and reducing the facility size from $150 million to $50 million.
Guidance, Outlook, and Risks
- Consulting Outlook: Management anticipates consulting revenues will decline in the low 20% range for the full year 2026 due to the cessation of strategy consulting engagements.
- Key Metrics: Contract Value (CV) decreased 3% to $283.2 million. However, Client Retention improved to 77% and Wallet Retention to 89% compared to the prior year.
- Capital Expenditures: Significant cash outflows were directed toward the renovation of the Cambridge headquarters ($18.2 million in the first six months). An additional $10.0 million to $11.0 million is expected to be spent in Q3 2026.
- Risks:
- Goodwill Impairment: The company recorded a $10.8 million impairment in Q1 2026 due to a decline in stock price. Management warns that further impairments could occur if stock price or market conditions deteriorate.
- Credit Risk: A note receivable from the 2024 divestiture of FeedbackNow remains in non-accrual status. An additional $0.9 million credit loss was recorded in Q2 2026, with the carrying value net of allowance at $1.8 million.
- Tax Rate: The effective tax rate for the full year is forecasted to be negative (10% to 20%) due to the non-deductible goodwill impairment, which created a temporary tax asset.
Investor Verification Checklist
- Verify the sustainability of the Q2 net income, which was significantly boosted by a non-cash tax benefit related to the Q1 goodwill impairment.
- Monitor the status of the $10.0 million note receivable from the FeedbackNow divestiture, which is currently in non-accrual status.
- Assess the impact of the discontinued strategy consulting business on the long-term revenue mix and the success of the transition to content marketing consulting.
- Track the completion of the Cambridge headquarters renovation and the associated capital expenditure burn rate in Q3 2026.
- Review future stock price performance to determine if additional goodwill impairment charges are necessary.