Forrester Research, Inc. (FORR) - Q1 2026 10-Q Summary
Business Context and Reporting Period
This summary covers the quarterly period ended March 31, 2026. Forrester Research, Inc. operates in three segments: Research, Consulting, and Events. The company provides research products, consulting services, and hosts events for enterprise clients. As of May 4, 2026, there were 19,412,000 shares of common stock outstanding.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Total Revenues | $85.5 million | $89.9 million |
| Net Loss | $(21.8) million | $(87.3) million |
| Loss Per Share (Diluted) | $(1.14) | $(4.62) |
| Operating Cash Flow | $25.6 million | $26.7 million |
| Cash & Marketable Investments | $145.5 million | $139.9 million (approx.) |
| Total Debt | $35.0 million | $35.0 million |
| Goodwill Impairment | $10.8 million | $83.9 million |
Material Changes vs. Prior Period
- Revenue Decline: Total revenues decreased 5% year-over-year. Research revenues fell 2% to $66.9 million, while Consulting revenues dropped 13% to $18.6 million due to lower bookings and the discontinuation of strategy consulting sales.
- Improved Profitability: Net loss narrowed significantly to $21.8 million from $87.3 million in Q1 2025. This improvement is primarily driven by a substantial reduction in goodwill impairment charges ($10.8 million vs. $83.9 million).
- Restructuring: The company implemented an 8% workforce reduction in February 2026, recording $2.1 million in restructuring costs for the quarter (including severance and contract terminations).
- Debt Restructuring: On March 12, 2026, the company amended its credit facility, extending the maturity to March 2029 and reducing the facility size from $150 million to $50 million to lower costs.
Outlook, Risks, and Management Commentary
- Guidance: Management anticipates 2026 consulting revenues will decline in the low 20% range year-over-year due to the cessation of strategy consulting. The full-year 2026 effective tax rate is expected to be between negative 5% and negative 10%.
- Capital Expenditures: The company is renovating its Cambridge headquarters (floors 4-6) and expects to incur $21.0 million to $22.0 million in capital expenditures for the remainder of 2026, partially offset by a $17.2 million tenant improvement allowance.
- Key Metrics: Contract Value (CV) decreased 3% to $285.3 million. However, Client Retention improved to 78% (up 5 points) and Wallet Retention increased to 89% (up 3 points), attributed to retention initiatives and the launch of the AI Access product.
- Risks: Risks include potential future goodwill impairments if stock price declines continue, credit risk associated with a $9.9 million note receivable from a prior divestiture (currently in non-accrual status), and macroeconomic factors affecting technology spending.
Investor Verification Checklist
- Goodwill Impairment Risk: Verify the stability of the stock price and market capitalization, as further declines could trigger additional impairment charges.
- Note Receivable Status: Monitor the collectability of the $9.9 million note receivable from the FeedbackNow divestiture, which remains in non-accrual status with a carrying value of $2.6 million.
- Consulting Transition: Assess the impact of discontinuing strategy consulting on long-term revenue growth and the success of the shift to content marketing consulting.
- Capital Expenditure Execution: Track the $21M-$22M renovation spend against the $17.2M landlord allowance to ensure cash flow projections remain accurate.
- Debt Covenants: Confirm continued compliance with the new minimum liquidity covenant and other financial ratios under the amended credit facility.