Q4 2023 Forrester Research Inc Earnings Call
Operator: www.globalonenessproject.org Good afternoon, and thank you for standing by. Welcome to Forrester's fourth quarter and full year 2023 conference call. At this time, all participants are in a listen-only mode.
Okay.
Good afternoon, and thank you for standing by welcome to forest or its fourth quarter and full year 2023 conference call.
At this time all participants are in a listen only mode.
Operator: After the speaker's presentation, there will be a question and answer session. Please be advised that today's conference is being recorded. I would now like to turn the conference over to Vice President of Corporate Development and Investor Relations, Ed Rice-Morris. Please go ahead.
After the Speakers' presentation there'll be a question and answer session. Please.
Please be advised that today's conference is being recorded.
I would now like to turn the conference over to Vice President of corporate development and Investor Relations at Bryce Morris. Please go ahead.
Edward Morris: Thank you, and hello everybody. Thanks for joining today's call. Earlier this afternoon, we issued our press release for the fourth quarter and full year 2023. If you need a copy, you can find one on our website in the investor section.
Thank you and Hello, everybody. Thanks for joining today's call.
Earlier. This afternoon, we issued a press release for the fourth quarter and full year 2023.
If you need a copy you can find one on our website in the investors section.
Edward Morris: Here with us today to discuss our results are George Colony, Forrester's Chief Executive Officer and Chairman, Nate Swan, Chief Sales Officer, and Chris Finn, Chief Financial Officer. Carrie Johnson, our Chief Product Officer, is also 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.
Here with us today to discuss our results are George colony first as Chief Executive Officer, and Chairman, Nate Swan, Chief sales Officer, and Kristin Chief Financial Officer, Carrie Johnson, Our Chief product Officer is also 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 meanings 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.
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Edward Morris: 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 statement. Factors that could cause actual results to differ are discussed in our reports and filings with the Securities and Exchange Commission, and 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 our previous calls, today we will be discussing our performance on an unadjusted basis, which excludes items affecting comparability. While reporting on an unadjusted basis is not in accordance with GAP, we believe that reporting numbers on this adjusted basis provides meaningful comparison and an appropriate basis for our discussion. You will find a detailed list of items excluded for these adjusted results in our press release. And with that, I'll hand it over to George.
These statements are based on the company's current plans and expectations and involves risks 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 and 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 our previous calls today, we will be discussing our performance on an adjusted basis, which excludes items affecting comparability.
While reporting on an unadjusted basis is not in accordance with GAAP. We believe that reporting numbers on this adjusted basis provides meaningful comparison and an appropriate basis for discussion.
You will find a detailed list of items excluded for these adjusted results in our press release.
I'll hand, it over to George.
George F. Colony: Thank you for joining Forrester's Q4 and full year earnings call. Joining me today are Forrester's Chief Sales Officer, Nate Swan, and our Chief Financial Officer, Chris Finn. Following my remarks, Nate and Chris will provide sales and financial updates. 2023 was the penultimate year of our Forrester Decisions transition. This change, coupled with the uncertain macroeconomic environment and the technology market unevenness, contributed to a challenging year for the company, but one that we navigated and managed. In my remarks, I'd like to cover four key themes.
Thank you for joining foresters Q4, and full year earnings call.
Joining me today are Forrester as Chief sales Officer, Nate Swan, and our Chief Financial Officer, Chris Finn.
Following my remarks, Nate and Chris will provide sales and financial updates.
2023 was the penultimate year of our Forrester decisions transition.
This change coupled with the uncertain macroeconomic environment and technology market unevenness contributed to a challenging year for the company, but one that we navigated and managed.
In my remarks, I would like to cover four key themes number one the progress we made in 2023.
George F. Colony: Number one, the progress we made in 2023. Two, our Q4 and 2023 fiscal year financial performance. 3, Product and Technology Enhancements, and finally, number 4, 2024 Guidance and the Road Ahead. We entered 2024 having achieved a major milestone in our product transition. As I've stated in previous calls, our North Star for 2023 was migrating two-thirds of our contract value, or CV, into the Forrester Decisions platform. I'm happy to report that as of January 1, 2024, we have hit that goal. While our short-term performance has certainly been impacted by this journey, we are progressing on our long-term goal of consistent contract value growth based on the Forrester Decisions platform. With the exception of a small number of accounts, we will complete the final transitionary phase of this change in 2024.
To our Q4 and 2023 fiscal year financial performance.
Three product and technology enhancements and finally number four 2020 for guidance and the road ahead.
We entered 2024, having achieved a major milestone in our product transition.
As I've stated in previous calls our North Star for 2023 was migrating two thirds of our contract value or CV into the Forrester decisions platform.
I'm happy to report that as of January one 2024, we have hit that goal.
While our short term performance has certainly been impacted by this journey. We are progressing on our long term goal of consistent contract value growth based on the Forrester decisions platform.
With the exception of a small number of accounts, we will complete the final transition of every phase of this change in 'twenty 'twenty four.
George F. Colony: In 2023, we made two other strategic moves that are difficult in the short term but will serve us well in future years. The first was sharpening the target audience for Forrester decisions. The product was built to primarily serve C-level executives and their teams in large user organizations, and our sales force is successfully pivoting to these targets. Selling higher and focusing on user companies with more than $1 billion in revenue allows us to land and expand across functions, ultimately making our business more resilient and scalable. The second move was the refocusing of consulting and events to help drive contract value. These non-CV businesses are becoming a smaller fraction of our overall revenue mix.
In 2023, we made two other strategic moves that are difficult in the short term, but will service well in future years.
The first was sharpening the target audience for Forrester decisions.
The product was built to primarily serve C level executives and their teams in large user organizations and our sales force has successfully pivoting to these targets.
Selling higher and focusing on user companies with more than $1 billion of revenue allows us to land and expand across functions ultimately, making our business more resilient and scalable.
The second move was the refocusing of consulting and events to help drive the contract value.
These non television businesses are becoming a smaller fraction of our overall revenue mix in 2023, 70% of total revenue was in research services and we expect this share to increase in future years.
George F. Colony: In 2023, 70% of total revenue was in research services, and we expect this share to increase in future years. Our contract value portfolio is more predictable, scalable, and profitable, so over time, the changing mix will improve the overall quality of our business. Turning now to our fourth quarter and full year performance, CV declined 4% in 2023.
Our contract value portfolio is more predictable scalable and profitable so over time, the changing mix will improve the overall quality of our business.
Turning now to our fourth quarter and full year performance.
CV declined 4% in 2023.
George F. Colony: While we are not pleased with our CV growth, we did exceed consensus estimates on revenue for both Q4 and the full year, and we hit the full year consensus for operating margin and EPS. In another bright spot, Q4 demonstrated the ongoing stabilization of our non-CV businesses, led by content marketing. Our events business saw an annual growth in attendance, with a record number of C-level executives attending our Q4 events.
While we are not pleased with our CV growth, we did exceed consensus estimates on revenue for both Q4 and the full year and we hit the full year consensus for operating margin and EPS.
And another bright spot Q4 demonstrated the ongoing stabilization of our non CV businesses led by content marketing.
Our events business on annual growth in attendance with a record number of C level executives attending our Q4 events.
George F. Colony: In research, we saw Forrester Decision's wall of retention dip slightly in Q4, down to 87%. Expanding wall retention is one of our top priorities in 2024. Nate and Chris will provide more detail on the plans to increase renewals and enrichment during the year. Meanwhile, we continue to enhance and improve our research power platform, Forrester Decisions. To reiterate my remarks in previous calls, the product is successfully delivering on its value proposition of enabling business and technology executives to align, plan, and execute their most pressing initiatives to accelerate growth. And as an example, I was in Amsterdam in December visiting with the Chief Marketing Officer of a major European B2B health care company, and he recounted how he had used our research to build the demand marketing engine of his company.
In research, we saw Forrester decisions wallet retention dipped slightly in Q4 down to 87% <unk>.
Expanding wallet retention is one of our top priorities in 2024 needing Chris will provide more detail on the plans to increase renewals enrichment in the year.
We continue to enhance and improve our research power platform Forrester decisions.
To reiterate my remarks in previous calls the product is successfully delivering on its value proposition of enabling business and technology executives to align plan and execute their most pressing initiatives to accelerate growth.
And as an example, I was in Amsterdam in December visiting with the Chief marketing officer of a major European BTB Health care company.
And he recounted how he has used our research to build the demand marketing engine of this company.
George F. Colony: He and his team have used our demand marketing waterfall model to increase generated leads, convert leads to sales opportunities, and ultimately convert opportunities into closed business. In addition, he has used our B2B marketing models and frameworks to structure the company's marketing group and align it more closely with the sales and product organization. We remain on our clients' side and by their side. In 2023 alone, we conducted approximately 15,000 guidance sessions with clients.
He and team have used our domain marketing waterfall model to increase generated leads.
Convert leads to sales opportunities and ultimately convert opportunities into closed one business.
In addition, he has used our BTB marketing models and frameworks to structure, the company's marketing group and align it more closely with our sales and product organizations.
We remain on our client side and by their side in 2020 three alone we conducted approximately 15000 guidance sessions with clients.
George F. Colony: These sessions are now more precisely focused as we debuted what we call client initiatives and outcomes in 2023. When a Forrester Decisions client onboards, we document their critical priorities and what business objectives they are seeking to achieve from those priorities. These initiatives and outcomes become the fulcrum of the Forrester relationship, laser-focusing our customer success managers, analysts, and consultants on what our clients are trying to get done. Over 85% of our Forrester Decisions clients now work with us this way. Our goal is to reach 95% by year-end.
These sessions are now more precisely focused as we debuted what we call client initiatives and outcomes in 2023.
When a fortunate decisions client on boards, we document their critical priorities and what business objectives. They are seeking to achieve from those priorities.
These initiatives and outcomes become the fulcrum of the Forrester relationship laser focusing our customer success managers analysts and consultants of what our clients are trying to get done.
Over 85% of our Forrester decisions clients now work with US This way our goal is to reach 95% by year end.
George F. Colony: Improvements to our research platform are driven by our Voice of the Client program, a systematic means of testing proposed product changes with our customers. In 2023, this effort yielded 6,500 client inputs originating from survey data, user testing studies, and qualitative interviews. Two prominent new product features that derive from this system were our weekly client-only Forrester takes and the rollout of a new research theme focused on high-performance IT. This idea helps technology leaders better match their information technology with their business goals. Unsurprisingly, Gen AI was a major focus of our research in 2023, as we published more than 80 reports on the topic.
Improvements to our research platform are driven by our voice of the client program. A systematic means of testing proposed product changes with our customers.
In 2023 this effort yielded 6500 client inputs originating from our survey data user testing studies and qualitative interviews.
Two prominent new product features that derive from this system, where our weekly client only Forrester takes and the rollout of a new research team focused on high performance I T.
This idea helps technology leaders better match their information technology with their business goals.
Now one surprisingly Jenny and I was a major focus of our research in 2023, as we published more than 80 reports on the topic.
George F. Colony: Our analysts continue to look past the hype and noise in the market, providing clients with practical Gen-AI guidance. In 2024, we will launch new Forrester waves focused on the generative AI market. As I stated on the Q3 conference call, Forrester's client-facing generative AI tool, IZOLA, represents the most significant step forward in delivering content to our clients since we launched our website 30 years ago. We expanded the scope of our client beta in Q4 and plan a general release in Q1 for all Forrester Decisions clients. Clients describe iZola as useful and fast and appreciate the tool's direct link to relevant research.
Our analysts continue to look past, the hype and noise in the market, providing clients with practical Jenny I guidance.
In 'twenty 'twenty four we will launch new Forrester waves focused in the generative AI market.
As I stated on the Q3 conference call Foresters client facing generative AI tool Zola represents the most significant step forward delivering content to our clients since we launched our website 30 years ago.
We expanded the scope of our client beta in Q4 and plan a general release in Q1 for all Forrester decisions clients.
Clients described by solar as useful in fast and appreciate the tools direct link to relevant research.
George F. Colony: While IZOLA is focused on our clients, we are developing five other GenAI tools that are built to improve internal efficiency. Now, we turn to our 2024 guidance. Given the bookings challenges we encountered in 2023, we anticipate declining revenue in the upcoming year. We will continue to be diligent in controlling costs to maintain margins, laying a foundation for sustainable growth in 2025. Accordingly, the company reduced its workforce today by 3%, a move that we do not take lightly but which is necessary to keep expenses aligned with revenue. Chris will provide more details on 2024 guidance in his remarks. So, to summarize...
Well as always focused on our clients. We are developing five other generic tools that are built to improve internal efficiency.
I'd now like to turn to our 'twenty 'twenty four guidance.
Given the bookies challenges we encountered in 2023, we anticipate declining revenue in the upcoming year.
We will continue to be diligent in controlling costs to maintain margins laying a foundation for sustainable growth in 2025.
Accordingly, the company reduced its workforce today by 3% and moves that we do not take lightly, but which is necessary to keep expenses aligned with revenue.
Chris will provide more details on 'twenty 'twenty four guidance in his remarks.
So to summarize I believe the 'twenty 'twenty four we remembered as an inflection point for Forrester as we complete our product migration and our go to market strategy overhaul.
George F. Colony: I believe that 2024 will be remembered as an inflection point for Forrester as we complete our product migration and our go-to-market strategy overhaul. Technology has never been more challenging for large companies to manage, and a new tech era is dawning, driven by generative artificial intelligence. Forrester was built for just these types of moments.
Technology has never been more challenging for large companies to manage in a new Tech era is dawning driven by generative artificial intelligence.
Forrester was built for just these types of moments when new technology arrives our clients look to us to help them understand the future make complex decisions operate efficiently and win and serve their customers in new ways.
Nate Swan: When new technology arrives, our clients look to us to help them understand the future, make complex decisions, operate efficiently, and win and serve their customers in new ways. I will now turn the call over to Nate Swan, our Chief Sales Officer. Nate,
I will now turn the call over to Nate Swan, our Chief sales officer.
Nate Swan: Thank you, George, and good afternoon, everyone. I'd like to spend a few minutes outlining the progress made in the last 12 months since I joined Forrester and share what's ahead. We have laid the foundation to build a high-performance sales culture and are rallying around NCBI, Net Contract Value Increase, as a continuous motion to improve retention and growth. I'd like to expand on four areas.
Nate.
Thank you George and good afternoon, everyone I'd like to spend a few minutes outlining the progress made in the last 12 months since I joined Forrester and share what's ahead.
We put in the foundation to build a high performing sales culture and are rallying around N CVI.
Net contract value increase as it continuous motion to improve retention and growth.
I'd like to expand on four areas one building a strong sales leadership team to sell into C level decision makers in our ideal customer profile three standardizing the Forrester engagement model to drive renewals and four widening our reach within client and prospect organization.
Nate Swan: Building a strong sales leadership team. 2. Selling to C-level decision makers in our ideal customer profile. 3. Standardizing the Forrester engagement model to drive renewals. 4.
Nate Swan: Widening our reach within client and prospect organizations to drive growth. Going deeper on my first point of sales leadership, throughout last year, I revamped key functions within the sales organization to improve structure, efficiency, execution, and accountability. These changes include the addition of a new VP of Sales Operations and Enablement, new VP of Customer Success, new VP of New Business, and lastly, a new SVP of North American Account Management. With the exception of international leadership, every one of my direct reports is new in 2023.
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Going deeper on my first point of sales leadership throughout last year I revamped key functions within the sales organization to improve structure <unk>.
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These changes include the addition of a new VP of sales operations and enablement, new VP of customer success, New V. P of new business and lastly, a new SVP of North American account management.
With the exception of the International leadership every one of my direct reports as new from 'twenty to 'twenty three.
Nate Swan: They all bring proven experience building high-performance sales and service organizations, and I'm excited by the strong caliber and energy of this leadership team. Secondly, we are focused on selling higher into the C-suite at client and prospect organizations. This is where customer-focused decisions are made.
All bring proven experience building high performance sales and service organizations and I'm excited by the strong caliber and energy of this leadership team.
Secondly, we are focused on selling higher into the C suite at client and prospect organizations. This is where a customer obsessed decisions are made this is where Forrester research has the biggest impact on clients.
Nate Swan: This is where Forrester's research has the biggest impact on clients. We help business and technology leaders align and grow their businesses. And we've made good progress this year with coaching, training, and enablement support for our salespeople calling on more senior executives. Approximately 70% of Forrester Decision seat holders are at the director level and above, which is significantly higher than our heritage product.
We help business and technology leaders online and grow their businesses and we've made good progress this year with coaching training and enablement support of our salespeople, calling on more senior executives approximately 70% of Forrester decisions seat holders are at the director level and above which is significantly <unk>.
Higher than our heritage product.
Nate Swan: Thirdly, we are maturing and standardizing our approach to retention across all products and delivering a world-class customer experience. The ongoing client engagement with sales, customer success, and research teams includes mutually valuable cadence of meetings with clients. These help both parties stay aligned and ensure Forrester is focused on delivering high-value outcomes that support clients' most critical business initiatives. Finally, sales is focused on growth and client enrichment.
Thirdly, we are maturing and standardizing our approach to retention across all products and delivering world class customer experience.
The ongoing client engagement with sales customer success and research teams includes mutually valuable cadence of meetings with clients.
These help both parties stay align an insurer Forrester is focused on delivering high value outcomes that support clients most critical business initiatives.
Finally sales is focused on growth and client enrichment in 'twenty 'twenty four we will continue to realize the land and expand promise of Forrester decisions by expanding relationships deeper within teams and cross selling to multiple functions.
Nate Swan: In 2024, we will continue to realize the land and expand the promise of Forrester decisions by expanding relationships deeper within teams and cross-selling to multiple functions. Our research, tools, and frameworks are built to not only help executives align with their function but across all strategic functions. We had some great wins in Q4 that demonstrate we're on the right track with our strategy of winning the leader and their teams. For example, an IT department with a large local city government in the U.S. doubled the size of their FD renewal, which is now valued at over $1.2 million in contract value. A SEAC function at a large U.S. insurer renewed its long-time relationship with Forrester into a $1.2 million contract with lots of growth.
Our research tools and frameworks are built to not only help executives online with their function, but across all strategic functions.
We had some great wins in Q4 that demonstrate we're on the right track with our strategy of winning leader and their teams and I T Department with a large local city government in the U S doubled the size of their F D renewal.
Which is now valued at over $1.2 million of contract value.
T X function at a large U S insurer renewed its longtime relationship with Forrester into a 1.2 million dollar contract with lots of growth.
Nate Swan: A global consultancy renewed its relationship with Forrester across multiple geographies, growing the Forrester Decisions contract to $1.4 million, an increase of 40%. And on the new business side of the house, we have secured several new Forrester Decisions relationships for over $300,000 each. We've seen momentum in particular with CIOs and CISOs who need Forrester's help in navigating the Gen AI landscape, as well as supporting high-performance IT strategies that align with their tech and business strategies for growth. In summary, the last year has been foundational in building high-performance sales at Forrester. I am immensely proud of the strides that we have made in the sales organization, and I look forward to executing in 2024. Thank you very much.
Our global consultancy renewed its relationship with Forrester across multiple geographies growing the forrester decisions contract to $1.4 million an increase of 40%.
And on the new business side of the house, we have secured several new forester decisions relationships over $300000. Each we've seen momentum in particular with Cio's and see soes, who need foresters help in navigating the gen AI landscape as well as supporting high performance I T strategies that align with their tech and busy.
Ms strategies for growth.
In summary, the last year has been foundational in building high performance sales at Forrester I'm immensely proud of the strides that we have made in the sales organization and I look forward to executing in 2024. Thank.
Thank you very much and with that I'll hand, the call over to Chris.
Chris Finn: And with that, I'll hand the call over to Chris. Thanks, Nate. And good afternoon, everyone.
Thanks, Dave and good afternoon, everyone.
Chris Finn: As George outlined, our fourth quarter results were challenging. However, I'm happy with the progress the company made on a number of fronts, including the evolution of the sales organization that Nate outlined, the continual improvements that we made to the Forrester Decisions platform, and the launch of our AI tool, iZola, along with the achievement of our migration goal of 66% of CV in Forrester Decisions as of January 1. In addition, our financial results were in line with the midpoint of our guidance and consensus estimates. However, at the same time, we continue to see some of our key metrics negatively impacted by the ongoing migration and the uncertain underlying business environment. On the topic of metrics, we want to highlight a small modification to the calculation methodology of our CV metrics.
As George outlined our fourth quarter results were challenging however, I am happy with the progress the company made on a number of fronts, including the evolution of the sales organization that made outlined the continual improvements that we've made to the forest and Decisioning platform and the launch of our AI tool is ola along with the treatment of our migration goal.
Of 66% of C V in farsi decisions as of January 1st.
In addition, our financial results were in line with the midpoint of our guidance and consensus estimates at the same time, we continue to see some of our key metrics negatively impacted by the ongoing migration and the uncertain underlying business environment.
On the topic of metrics, we want to highlight a small modification to the calculation methodology of our CV metric.
Chris Finn: This change is driven by a desire to better align contract value with trends in the business. As we complete the migration of Forrester decisions, the larger makeup of multi-year contracts is driving the change in methodology. In our historical calculations, while the routable portion of our subscription products has been annualized, the entitlements included in the subscriptions, representing approximately 10% of the subscription, have been included in CV at their total value, as all entitlements in the contract are available for use during an annual period. The revised calculation analyzes the entitlements for contracts greater than one year.
This change is driven by a desire to better align contract value with trends in the business as we complete the migration of forest. The decisions. The larger makeup of multiyear contracts is driving the change in methodology.
And our historical calculations, while the ratable portion of our subscription products have been annualized the entitlements included in the subscriptions representing approximately 10% of the subscription have been included in C. V. At their total value as all entitlements under contract are available for use Varian annual period.
The revised calculation annualized is the entitlement for contracts greater than one year.
Chris Finn: This change will create a more precise view of the trends impacting CV, bookings, and revenue. In addition, although we typically update our CV metrics in the first quarter of the year for the current year's plan FX rates, we made that update this quarter in order to avoid a second change to the metric next quarter. Please note, we have recast prior quarters to reflect this revised metric, and further information on the change can be seen in the investor deck on our investor relations website. For the quarter, overall revenue was $118.1 million, representing a 14% decline from Q4'22 revenues of $136.9 million.
This change will create a more precise view of the trends impacting C V bookings and revenue in.
In addition, although we typically update our CV metrics in the first quarter of the year for the current year's plan FX rates, we made that update this quarter in order to avoid a second change to the metric next quarter. Please note we have recast prior quarters to reflect this revised metric and further information on the change can be seen in the investor deck on our Investor Relations website.
For the quarter overall revenue was $118 $1 million, representing a 14% decline from Q4 'twenty two revenues of $136 $9 million overall revenue for the year came in at $487 million, representing an 11% decline from the $537.8 million regenerate in 2022.
Chris Finn: Overall revenue for the year came in at $480.7 million, representing an 11% decline from the $537.8 million we generated in 2022. The revenue declines for both the fourth quarter and full year were primarily driven by declines in our consulting business and declines in our research business, largely due to our legacy research and reprint products. In terms of segment results for the quarter, for the research segment, CV came in at $332.1 million at December 31, 2023, and this is a 4% decline from December 2022. The decrease in CV was largely due to a combination of lower enrichment of retained accounts, along with additional churn in our vendor base. We continue to analyze why certain buyers are new and are rich at lower than expected rates, and this is tied to a combination of the ongoing migration, the current buyer profile, and the ongoing tech recession.
The revenue declines for both the fourth quarter and full year were primarily driven by declines in our consulting business and declines in our research business largely from our legacy research and refined products.
In terms of segment results for the quarter for the research segment CV came in at $332.1 million at December 31, 2023, and this is a 4% decline from December 2022. The decrease in C. V was largely due to a combination of lower enrichment of retained accounts along with additional churn in our vendor base we continue.
To analyze why certain buyers are new and enrich at lower than expected rates and this is tied to a combination of the ongoing migration. The current buyer profile and the ongoing tech recession as Nate mentioned in his remarks. The sales organization is very focused on expanding our reach within client organizations and I'm confident in the team and processes that he has put in place.
Chris Finn: As Nate mentioned in his remarks, the sales organization is very focused on expanding our reach within client organizations, and I'm confident in the team and processes that he has put in place. However, we expect both CV and wallet retention to be under pressure in 2024 as we work through the final year of the product transition in what is still a difficult economic and technological environment. We expect CV trends to turn flat to positive as we exit 2024. And although overall client count is down from the prior quarter, Forrester Decisions' client count continues to grow, and Forrester Decisions' client retention remains well above overall client retention by approximately 10 points. We also achieved our migration goal as we had $215 million, or 66% of CV contracts, on the Forrester Decisions platform as of January 1st, 2024. From a revenue standpoint, research revenues decreased 8% in the fourth quarter and 6% for the full year. For the full year, revenue from our subscription research products was down approximately 1%, as growth in Forrester decisions was offset by declines in our legacy research products. In addition, we experienced declines in reprints and our other smaller and discontinued products.
Yes.
However, we expect both T V and wallet retention can be under pressure in 2024, as we work through the final year of the product transition in what is still a difficult economic and technology environment, We expect CV trends to turn flat to positive as we exit 2024.
And although overall client count is down from the prior quarter Forrester decisions client count continues to grow and foster decisions client retention remains well above overall client retention by approximately 10 points. We also achieved our migration goal as we had $215 million or 66% of C V contracts on the forest the decisions platform.
As of January one 2024.
From a revenue standpoint research revenues decreased 8% in the fourth quarter and 6% for the full year for the full year revenue from our subscription research products was down approximately 1% as growth in forest. The decisions was offset by declines in our legacy research products. In addition, we experienced declines in reprints and our other smaller than <unk>.
Discontinued products.
Chris Finn: Our consulting business posted revenues of $28.3 million for the fourth quarter and $118.2 million for the full year, representing declines of 25% and 23%, respectively, versus the prior year periods. These declines were driven by similar factors we have seen all year. One, the external environment in which discretionary spending on consulting projects is meaningfully curtailed, and two, our internal decision, except in limited circumstances, to only sell consulting to customers who have a strong relationship with Forrester. And finally, our events business posted revenues of $4.6 million, representing a decline of 36% compared to the fourth quarter of 2022. This decrease was driven by a shift in event timing. In Q4 of this year, Forrester hosted four events compared to five events in the prior year quarter. For the full year, the segment declined by 8% to $28.2 million, driven by lower sponsorship revenue.
Our consulting business posted revenues of $28 $3 million for the fourth quarter and $118.2 million for the full year, representing declines of 25% and 23% respectively versus the prior year periods. These declines were driven by similar factors, we have seen all year, one the external environment in which discretionary.
Pending a consulting projects is meaningfully curtailed and to our internal decision except in limited circumstances to only sell consulting to customers whoever CV relationship with Forrester.
And finally, our events business posted revenues of $4.6 million, representing a decline of 36% compared to the fourth quarter of 2022. This decrease was driven by a shift in event timing in Q4 of this year Forrester hosted four events compared to five events in the prior year quarter for the full year the segment declined by eight.
Sent to $28 $2 million driven by lower sponsorship revenue.
Continuing down our P&L on an adjusted basis operating expenses for the fourth quarter decreased by 10%, primarily driven by the restructuring plan, we announced during our Q1 call specifically on head count for the fourth quarter, we were down 14% compared to the same period in 2022 on a full year basis operating expenses decreased by 8%.
Chris Finn: Continuing down our P&L on an adjusted basis, operating expenses for the fourth quarter decreased by 10% primarily driven by the restructuring plan we announced during our Q1 call. Specifically, on headcount for the fourth quarter, we were down 14% compared to the same period in 2022. On a four-year basis, operating expenses decreased by 8%, also largely driven by labor reductions, with additional savings from other categories, including facilities and professional services fees.
Also largely driven by labor reductions with additional savings from other categories, including facilities and professional services fees.
Operating income decreased by 47% to $6 $8 million or five 8% of revenue in the current quarter compared to $12.9 million or nine 4% of revenue in the fourth quarter of 2022 on a full year basis operating income decreased by 25% to $52 $3 million or 10.9% of revenue compared with <unk>.
$69 $7 million or 13% of revenue in 2022, we continue to be committed to aligning our cost structure with our revenue outlook.
Chris Finn: Operating income decreased by 47% to $6.8 million, or 5.8% of revenue, in the current quarter, compared to $12.9 million, or 9.4% of revenue, in the fourth quarter of 2022. On a full-year basis, operating income decreased by 25% to $52.3 million, or 10.9% of revenue, compared with $69.7 million, or 13% of revenue, in 2022. We continue to be committed to aligning our cost structure with our revenue outlook. Interest expense for the quarter was $0.8 million, as compared to $0.7 million in the fourth quarter of 2022.
Interest expense for the quarter was point $8 million as compared to point $7 million in the fourth quarter of 2022 on a four year basis interest expense was $3 $1 million compared to two and a half million dollars. In 2022. This increase was driven by higher interest rates compared to a year ago.
Finally, net income and earnings per share decreased 44% compared to Q4 of last year with net income at $4.8 million and earnings per share at 25 cents for the current quarter compared with net income of $8 $5 million and earnings per share of <unk> 45 in the fourth quarter of 2022.
On a full year basis, net income decreased 22% to $36.6 million and E. P. S decreased 23% to $1 90.
Chris Finn: On a four-year basis, interest expense was $3.1 million, compared to $2.5 million in 2022. This increase was driven by higher interest rates compared to a year ago. Finally, net income and earnings per share decreased 44% compared to Q4 of last year, with net income at $4.8 million and earnings per share at $0.25 for the current quarter, compared with net income of $8.5 million and earnings per share of $0.45 in the fourth quarter of 2022. On a full-year basis, net income decreased 22% to $36.6 million, and EPS decreased 23% to $1.90.
Looking at our capital structure and year to date cash flow from operating activities was $21 $7 million and capital expenditure was $5 $5 million and we had $124 $5 million of cash and investments as we exited the fourth quarter.
There were no debt payments or stock buyback this quarter, leaving us with $35 million of outstanding debt and approximately $71 million of our stock repurchase authorization intact.
As we've outlined today, we have taken actions to better align our cost structure with the ongoing declines in our revenue forecast.
I'll now provide some additional details regarding the restructuring.
We have reduced our workforce by approximately 3%.
And we expect to incur approximately 7.3 million to $7 $7 million of costs with these actions, including $700000 that was recognized during the fourth quarter approximately $3.8 million of the charge is noncash and we plan to use a portion of the cost savings to fund focused investments across sales and customer success.
Chris Finn: Looking at our capital structure, year-to-date cash flow from operating activities was $21.7 million, and capital expenditures were $5.5 million, and we had $124.5 million of cash and investments as we exited the fourth quarter. There were no debt payments or stock buyback this quarter, leaving us with $35 million of upstanding debt and approximately $71 million of our stock repurchase authorization intact. As we've outlined today, we have taken actions to better align our cost structure with the ongoing declines in our revenue forecast. I'll now provide some additional details regarding the restructuring. We have reduced our workforce by approximately 3%, and we expect to incur approximately $7.3 million to $7.7 million of costs for these actions, including $700,000 that was recognized during the fourth quarter. Approximately $3.8 million of the charge is not cash.
Turning to guidance starting with the top line for 2024, we expect revenue to be $430 million to $450 million or down 6% to 11% versus 2023.
This guidance assumes the outlook for the research business to be a mid to high single digit decline the decline in our consulting business in the low to mid teens and a decline in our events business in the mid single digits for the year.
Given the actions we've taken to control costs and our ongoing focus on costs, we would expect our operating margins to be in the range of nine and a half to 10, 5% for 2024.
A portion of the cost savings this year are coming from non head count related reductions for example, a pause on non sales related variable compensation components.
Interest expense is expected to be $3 million for the year and we are guiding to a full year tax rate of 29%.
Chris Finn: And we plan to use a portion of the cost savings to fund focused investments across sales and customer success. Turning to guidance, starting with the top line, for 2024, we expect revenue to be $430 to $450 million, or down 6 to 11 percent versus 2023. This guidance assumes the outlook for the research business to be a mid to high single-digit decline, a decline in our consulting business of the low to mid-teens, and a decline in our events business of the mid single-digits for the year. Given the actions we have taken to control costs and our ongoing focus on costs, we would expect our operating margins to be in the range of 9.5% to 10.5% for 2024. A portion of the cost savings this year are coming from non-headcount-related reductions, for example, a pause on non-sales-related variable compensation components. Interest expense is expected to be $3 million for the year, and we are guiding to a full-year tax rate of 29%.
Taking all this into account, we would expect EPS to be in the range of $1 50 to $1 70 for the full year.
In summary, we continue to believe that 2024 will be another challenging year as it marks the final transition and the FRC decisions migration in our go to market refinements as Nate outlined we are laser focus on far so decisions retention with improvements in the engagement model the retention lifecycle and targeted investments in customer success and sales.
We believe these actions will pay dividends as we progress through 2024 and into 2000 and twenty-five. Thank you all for taking the time today and with that I'll hand, the call back to George.
Thank you Chris.
To summarize 2023 was a challenging year with internal and external factors impacting our financial performance.
However, we believe in the Forrester decisions product our evolution into a high performance sales organization.
The impact of generative AI and the research market opportunity driven by massive technology disruption.
We believe 'twenty 'twenty four will be remembered as an inflection point for Forrester.
Chris Finn: Taking all this into account, we would expect EPS to be in the range of $1.50 to $1.70 for the full year. In summary, we continue to believe that 2024 will be another challenging year as it marks the final transition in the Forrester Decisions migration and our go-to-market refinement. As Nate outlined, we are laser-focused on Forrester Decisions retention with improvements in the engagement model, the retention lifecycle, and targeted investments in customer success and sales. We believe these actions will pay dividends as we progress through 2024 and into 2025. Thank you all for taking the time today, and with that, I will hand the call back to George. Thank you, Chris.
The foundational work of the year will enable us to capture a growing share of our substantial total addressable market in 2025 and beyond.
I'm going to hand, the call back to the operator, and we will now take questions.
Thank you Sir.
As a reminder to ask a question you will need to press star one one on your telephone.
To withdraw your question. Please press star one again.
Please standby, while we compile the Q&A roster.
And I show our first question comes from the line of Andrea.
So to sum from Sidoti. Please go ahead.
Hi, and thank you for taking my questions.
I'm just curious.
This is Dan.
Decline.
This year, there's surplus for 2024.
George F. Colony: To summarize, 2023 was a challenging year with internal and external factors impacting our financial performance. However, we believe in the Forrester Decisions product, our evolution into a high-performance sales organization, the impact of generative AI, and the research market opportunity driven by massive technological disruption. We believe 2024 will be remembered as an inflection point for Forrester. The foundational work of the year will enable us to capture a growing share of our substantial total addressable market in 2025 and beyond. I'm going to hand the call back to the operator, and we will now take questions. Thank you, sir. As a reminder, to ask a question, you will need to press star 1-1 on your telephone. To withdraw your question, please press star 1 again.
Do you actually get to suggest internal initiatives in terms of that switching to say his decision.
The appliance and how much is due to the general macro environment that maybe sales cycles being longer.
Yeah. Thanks, Anthony this is Chris.
So this is the last.
Phase in last year of the FTE transformation for US you know we've been on this journey.
Really August of 'twenty, one when we launched the product and show during this time, obviously we've made.
Some decisions along the way.
We feel would benefit us in the long term and we knew would hurt frankly in the short term and so combine that with the fact that we've had.
Serious tech recession here over the past couple of years with a lot of layoffs at large.
Tech companies.
Operator: Standby while we compile the Q&A. And I'll show our first question comes from the line of Anja Söderström from Spidoti. Please go ahead. Hi, and thank you for taking my questions. I'm just curious.
Vendors and users and so you know.
I think you know it is.
Hard to really peg that percentages.
I would think that look a lot of this has been kind of external environment.
Anja Söderström: How much of this sort of... decline for this year, the softness for 2024 do you attribute to just internal initiatives in terms of switching to serious decisions and new clients, and how much is due to the general macro environment and maybe sales cycles being longer? Yeah, thanks, Ina. This is Chris.
Given frankly.
And but I'd say, a smaller percentage of it really is things that we've made decisions on ourselves.
Frankly have elongated the transformation that we're going through.
With that said I am very confident there.
Chris Finn: So, you know, this is the last phase and the last year of the FD transformation for us. You know, we've been on this journey since really August 21, when we launched the product. And so, you know, during this time, obviously, we've made some decisions along the way that we feel would benefit us in the long term but that we knew would hurt, frankly, in the short term. And so, combine that with the fact that we've had, you know, a serious tech recession here over the past couple of years with a lot of layoffs, large, you know, tech companies, both vendors and users. And so, you know, I think, you know, it's hard to really peg the percentages.
This is the final year, we do know that.
Just on where we are today at 66% of CV in FTE, we're confident that we're going to get to approximately 80% by the end of the air really be done with this transformation at this point in the remaining part of CV is really going to be.
In our non subscription.
Areas around <unk> so.
You know, we feel confident about the direction that were going anyway. I mean do you feel confident that you know.
We're going to see probably a little bit more of a decline as we go through the beginning of this year, but we're going to exit 'twenty four.
With television starting to turn around and get some growth here.
Chris Finn: I would think that, look, a lot of this has been kind of externally driven, frankly. And, you know, but, you know, I'd say a smaller percentage of it really is things that we've made decisions on ourselves and that, frankly, have elongated the transformation that we're going through. With that said, I'm very confident that, you know, this is the final year.
I think the George here.
Surprise one of the biggest surprises has been the the weakness in tech over the last two years and that it has impacted us with small vendors. It's also affect us with large vendors.
I think it's a very been very interest rate driven actually venture has dried up and.
Many of these smaller vendors are they've just cut budgets and got people and so that.
George F. Colony: We do know that, based on where we are today at 66% of CV and FD, we're confident that we're going to get to approximately 80% by the end of the year and really be done with this transformation at this point. And the remaining part of CV is really going to be in our non-subscription areas around reprint. So, you know, we feel confident about the direction that we're going in, and we do feel confident that, you know, we're probably going to see a little bit more of a decline as we go through the beginning of this year, but we're going to edge at 24 with CV starting to turn around and get some growth. I think the biggest surprise, one of the biggest surprises, has been the weakness in tech over the last two years, and it I think it's been very interest rate driven, actually.
That is definitely.
It is one of the major factors here, yes, yes.
Yeah.
Yes, I know the slot vendor side as well.
A lot of those companies are literally just gone away.
And I'd say on the larger vendor side, it's not so much churn as it is as they've made the migration over to ft.
They've had budget constraints as well.
Reduced some of their overall spend with us, but they have not churned out unlike some of the small vendors.
One of the disciplines, we've developed through this period is where.
We're being very very <unk>.
Selective is who we will take from those that small vendor group. So generally we are we're turning away from vendors under $50 million in size.
But that's something you've been doing well, but again right in March.
And move from the company. That's it that's intended to do anyway, right, it's not just macroeconomic and like that.
George F. Colony: Ventures dried up, and many of these smaller vendors had just cut budgets and cut people. And so that is definitely, it is one of the major factors here. Yeah, on the small vendor side as well. I mean, a lot of those companies have literally just gone away. And I'd say on the larger vendor side, it's not so much churn as it is as they've made the migration over to FD. And they've had budget constraints as well.
So do we think of that yes.
Yes, yes.
And then.
And then in terms of a generative AI since like that's on fire.
And how much of that is going to be driving it well do you think can pick up here.
Sort of reassess.
Yes.
Yes, there are approximately 100 analysts now who are who are spending a great deal of their time in generative generally generate high for us.
George F. Colony: They've reduced some of their overall spend with us, but they have not churned out, unlike some of the small. One of the disciplines we've developed through this period is we are being very, very selective as to who we will take from that small vendor group. So, generally, we are turning away from vendors under $50 million in size. But that's something you've been doing over the year, right?
Talked about 80 reports.
I'll just I'll take I'll estimate this would have been and it will get pretty close that it's going to be an area of 15% to 20% of our research focused agenda of AI in 2024.
And it is it's on the minds of all of our clients with their vendors users all board boards of directors.
And it's been in the.
How are you going the organizations.
The more.
Greater magnitude of questions here on you. So this is.
George F. Colony: It's been more satiric, and move from the company that you intended to do anyway, right? It's not just the macroeconomic environment that's sort of weeding those out. Yes, yep, and In terms of generative AI, it seems like that's on fire now, and how much of that is going to be driving your growth, do you think, and taking up your sort of research resources? Yeah, there are approximately 100 analysts now who are spending a great deal of their time on generative AI for us. I talked about 80 reports.
But as I said in my remarks. This what Forrester was built to do when when Theres Big technology change clients are need need decision, making they need context, they need vision to the future and so this is a great opportunity for us.
Okay. Thank you and in terms of the competitive landscape is there anything to call out there that's been changing.
And looking at Nate here, but.
From a competitive landscape no I mean I think we've.
We've got.
We feel very confident in our in our research and our value proposition our clients are really reacting well to high performance.
George F. Colony: I'll estimate this, but I bet I'll get pretty close, that it's going to be in the area of 15 to 20% of our research focused on generative AI in 2024. And it's on the minds of all of our clients, whether they're vendors, users, all boards of directors, and the higher you go in the organizations, the greater magnitude of questions here on you. So this is what, as I said in my remarks, this is what Forrester was built to do. When there's big technology change, clients need decision making, they need context, they need vision for the future. And so this is a great opportunity for us. Okay, thank you. And in terms of the competitive landscape, is there anything to call out there that's been changing, or not? I'm looking at Nate here.
We think our view.
View of.
Customer obsession and how it plays across all different functions really makes us different. So there are great providers that are out there we have a unique perspective and our clients seem to like our perspective, and so we feel very confident in that so I don't think competition is any any more or less than it ever has been yes, I think the biggest change here.
Below us there are some smaller companies, who are kind of turning away from research toward toward generating leads for vendors.
So that's we like that because essentially taking a step outside of the research business and.
Nate Swan: From a competitive landscape, no. I mean, I think we feel very confident in our research and our value proposition. Our clients are really reacting well to high-performance IT. We think our view of customer obsession and how it plays across all different functions really makes us different. So there are great providers that are out there.
Further away from further away from us we like that.
Okay, and then testing globally is there anything to call out there any region that did better or worse there.
Yes, we did really well on from an international standpoint, one of our best performing groups, we did well in the government sector, we have been growing.
Nate Swan: We have a unique perspective, and our clients seem to like our perspective. And so we feel very confident. I don't think competition is any more or less than it ever has been, and further away from us, we'd like to. Okay, and in terms of globally, is there anything to call out? Any region that did better or worse?
Pretty well in that in that marketplace.
Saw some really good green shoots in Q4.
For the use of our new business team, we've got a new leader in that group and had some great focus there and that team.
Really delivered in Q4 and is off to a pretty good start actually in Q1 as well so.
Lots of consistency all teams are working really hard we just got some tougher markets in the.
Nate Swan: Yeah, we did really well from an international standpoint, one of our best performing groups, we did well in the government sector, we've been growing, you know, pretty well in that marketplace and saw some really good green shoots in q4. For the user new business team, we've got a new leader in that group and had some great focus there and on that team. You know, really delivered in q4 and is off to a pretty good start in q1 as well, so lots of consistency; all teams are working really hard. We just got some tougher markets in the. The high tech side of the House, and North America is a big focus for us, you know. He is going to be a great leader for us, really bringing structure and discipline to the organization, and I expect the North American team will really react well.
The high Tech side of the House and North America is a big focus for us.
Patrick.
Is it going to be a great leader for us really bringing structure and discipline to the to the organization and I expect the.
North American team will really react well to that.
Okay. Thank you and just one last one if I may in terms of the head count the 3% you expect.
You have been.
Cutting head count now for a couple of quarters is there more room to kind of where you're cutting and how can you do that without jeopardizing the quality of your work.
Yeah, that's a good question.
Yes.
We feel like at this point.
We're through the labor reductions that disproportionately impacted our consulting organization, which really what's necessary to bring in the resources in line with where the expectations are on the consulting business for 'twenty. Four we know there were some challenges there last year and we do expect some of those to continue into this year and so as a percentage of head count most of the other business units, we are really well below the 3%.
Nate Swan: Okay, thank you. And just one last one, if I may. In terms of the head count, the 3% you expect, you've been cutting headcounts now for a couple of quarters. Is there more room to cut, and where are you cutting, and how can you do that without jeopardizing the quality of your work?
Average for the company.
We really intend to preserve our resources to get back to growth later on this year.
Chris Finn: Yeah, that's a good question. Yeah, we feel like at this point, you know, we're through the labor reductions, and the rift disproportionately impacted our consulting organization, which really was necessary to bring the resources in line with where the expectations are on the consulting business for 24. We know there were some challenges there last year, and we do expect some of those to continue into this year. And so, as a percentage of headcount, most of the other business units were really well below the 3% average for the company, as we really intend to preserve resources to get back to growth later on. Okay, thank you. That was all for me.
Okay. Thank you and that will sell for me appreciate your time. Thanks.
Johnny.
Thank you.
And I show. Our next question comes from the line of Vincent Colicchio from Barrington Research. Please go ahead.
Yes, a question for Nate so.
70% of seat holders at director level and above sounds.
Sorry.
Yes go ahead, sorry event.
That's like a pretty good data point.
Did I hear you.
Not sure if I heard.
Is that in line with your objective did you mention that.
It is in line with where we are going so we are we look at really three roles as our as our target Roes to enter into a.
Anja Söderström: Appreciate your time. Thanks. Thanks, Ani. Thank you. And I show our next question comes from the line of Vincent Colicchio from Barrington Research. Please go ahead.
Into a company we want to be at the head of function generally at our CMO.
Vincent A. Colicchio: Yes, question for Nate. So the 70% of seat holders at director level and above sounds like, sorry? Yes, go ahead. Sorry, Vince. No, no, it sounds like a pretty good data point. Did I hear you?
CPO Chief Digital Officer, CSO type role, we look at the Vps and we look at the directors, we certainly have opportunities with managers and below generally that is going to be our team seat function that we can grow into what what we're looking to do as a strategy events as well.
Nate Swan: I'm not sure if I heard... Is that in line with your objective? Did you mention that? It is in line with where we are going, so we look at really three roles as our target roles to enter into a company. We want to be at the head of function, generally at a CMO, you know, CPO, Chief Digital Officer, or CISO type role. We look at the VPs, and we look at the directors.
We want to win the leader and then we want to capture the teams underneath them.
Organizations work in 2018 based function to accomplish their goals and I think the great thing about Forrester decisions and how we are aligned as a.
Nate Swan: We certainly have opportunities with managers and below. Generally, that is going to be our team seat function that we can grow in. So what we're looking to do as a strategy, Vince, is we want to win the leaders, and then we want to capture the teams underneath them.
As a company is the alignment we create across the organization. So if we happen to be in with the organization.
The next step might be to get over to the CX organization or the marketing organization. We can work with all of those organizations at once you don't tend to capture those deals all at one time you grow into those but the way you.
Nate Swan: Organizations work in a team-based function to accomplish their goals, and I think the great thing about Forrester Decisions and how we are aligned as a company is the alignment we create across the organization. So if we happen to be in the IT organization, the next step might be to get over to the CX organization or the marketing organization. We can work with all those organizations at once. You don't tend to capture those deals all at once. You will grow into those.
Capture opportunity grow the opportunities by being at the most senior level functions and by understanding what their initiatives are in delivering against those initiatives and when you do that clients.
Clients feel very comfortable expanding and growing the relationship. So we've seen some good success in doing that the sales organization is very excited about doing that we've got a new sales methodology that we are in process of rolling out for the organization.
Nate Swan: But the way you capture opportunity, and grow opportunity, is by being at the most senior levels in functions and by understanding what their initiatives are and delivering against those initiatives. And when you do that, clients feel very comfortable expanding and growing the relationship. So we've seen some good success in doing that. The sales organization is very excited about doing that.
And we're excited about what that's going to do for us.
Which is really understand and align on how our clients are trying to work.
So when you began this journey.
Nate Swan: We've got a new sales methodology that we are in the process of rolling out for the organization. And we're excited about what that's going to do for us, which is really understand and align with how our clients are trying to grow. So when you began this journey, if you were to know that you'd be at this level of, you know, seat holders at the director level or above at this point in time, I assume you'd be content with that. Well, I don't think content might be, you know, a good word, I guess we always want to get higher, right?
If you were to know that you'd be at this level.
Shareholders at the director level around above at this point in time, I assume you'd be content with that.
Well I don't content might be.
A good word I guess, we always wanted to get it we always want to get higher right.
If you sell to the senior most function you can tell are our highest level offering.
Which will deliver the most value to the organization so I.
I think all of our salespeople want to try to get to the top level of the organization, it's where.
Nate Swan: Then, if you sell to the senior-most function, you can sell our highest-level offering, which will deliver the most value to the organization. So, I think all of our salespeople want to try to get to the top level of the organization. It's where impact happens, it's where revenue happens, and it's where they can be most successful, and it's where they can help their clients the most, working on those really big initiatives that they're going on.
It's where impact happens, it's where the revenue happens and it's where they can be most successful it's where they can help their clients. The most.
Working on those those really top initiatives that theyre going on so we are paying attention to it we are capturing data as to where people are going and we can see.
That we are improving it call it on more senior level. So we will continue to do that.
Nate Swan: So we are paying attention to it. We are capturing data as to where people are going, and we can see that we are improving at calling on more senior levels. So we'll continue to do that. We also know that when we call on more senior levels, we are able to sell multi-year contracts because initiatives go over multiple years.
We also know that when we call on more senior levels, we are able to sell multi year contracts because initiatives go over multiple years.
So it's.
Really.
Aligns really well with Forrester decisions, which we've been trying to sell more multi year, we want to really try and drive that number up as much as we can.
So I think the important point here is that.
Nate Swan: So it aligns really well with Forrester Decisions, which we've been trying to sell more multi-year. We want to really try and drive that number up as much as we can. I think the important point here is that we are selling at a higher level with Forrester Decisions than we did with Legacy. That's good, but we need to get to even higher levels. So I'd say we're feeling good, but we're not content. That's the wrong word to use there. Yeah, I think maybe I'm...
We are selling at a higher level with Forrester decisions than we did with legacy that's good but we need to get it even higher levels. Yes. So we're I'd say I'd say, we're feeling good but we're not content that's the wrong word to use there.
Yes, I think maybe.
Sounded a bit more exciting to me that maybe.
It shouldn't be too excited I mean, good progress but.
Our ways to go yes, yes exactly.
Chris Finn: The Small Client Side, are we nearing a point where there may be some stabilization in the client losses? What portion of small clients make up your total currently? Yeah, Vince. This is Chris.
The small client side.
Are we nearing a point, where there maybe some stabilization in the client losses.
And.
Also what portion of small clients makeup your total currently.
Yes, Vince this is Chris Yeah, we feel like I mean, it's certainly this year.
Chris Finn: Yeah, we feel like, I mean, certainly this year, we're going to be through most of that churn in the base from a CV perspective. Our expectation, in general, is that we're going to get CV from a legacy perspective down below 10% at that point. And so that's, that's a small number. We think we're through the majority of that. We don't really give guidance on the number, but I think based on the CV metric that I just gave you of it being below 10%, you get a... And also, I think Forrester Decisions has had a weeding effect here because it's built for larger organizations and it's a little bit more expensive.
We're going to be through most of that.
Churn in the base from a CV perspective, our expectation in general is that we're going to get.
From a legacy perspective down below 10% at that point and so that's a small portion we think we're through the majority of that we don't really give guidance on the number but I think based on the CV metric that I. Just gave you of it being below 10% you get a sense of kind of what it is.
I think for sure decisions has been it has been a weeding.
As I said, a waning effect here because it's built for larger organizations and.
There, it's a little bit more expensive. So that that has also helped take smaller.
George F. Colony: So that has also helped take the smaller, especially vendors, out of the mix. And, you know, I think most organizations, including yourselves, are expecting a better IT spending year this year than last year, and you're targeting larger enterprises. I just, how do you square your, you know, your expectation that CV doesn't pick up until later in the year versus a better IT spending year? I suppose it's just the vagaries of executing on a new product. What am I missing?
Especially vendors out of the mix.
And you know.
I think most.
Organizations, including yourselves are expecting a better it spending here this year than last year.
And youre targeting larger enterprises.
I just.
How do you square short of your expectation of CV doesn't pick up till later in the year.
First as a better it spending here I suppose is just.
The vagaries of executing on our new.
On the product.
Chris Finn: Yeah, no, I think that's right, Vince. I think, you know, we're probably being a little bit conservative here just because of what we came out of Q4 with and going into Q1. We are seeing some bright spots, certainly, but, you know, I don't want to get too excited yet. We have to show that, you know, we can execute. But certainly, the continued momentum around the growth of FD is certainly really important, and we're seeing that. And, you know, I'd love to see some moves. We're obviously on interest rates.
What am I missing.
Yeah, No I think Thats right, Vince I think we're probably being a little bit conservative here, just because of what we came out of Q4 and going into Q1, we are seeing some bright spots certainly but.
I don't want to get too excited yet we have to show that we can execute but certainly the continued momentum around the growth on FTE.
Certainly really important and we're seeing that.
And.
You know.
We see some moves are obviously on interest rates I think that'll help too.
Chris Finn: I think that'll help, too. But I think, you know, the tech recession is still very much here, but we're starting to see some green shoots around budgets opening up and having conversations. We're even having conversations with clients that, you know, on the big vendor side, may have reduced spend during the migration over to FD. But they're actually coming back now and having discussions about larger contracts, which is a bright spot. So we're definitely seeing it start to open up a little bit. But, you know, our expectation is that we will be a little bit conservative in the first half and expect to see some of that growth during the back half, especially as we exit.
But I think the tech recession is still very much here, but we're starting to see some green shoots around budgets opening up and having conversations we're even having conversations with clients at all.
The big vendor side may have reduced spend during the migration over FTE. They are actually coming back now and having discussions about larger contracts, which is a bright spot. So we're definitely seeing it start to open up a little bit but.
Our expectation is that in order to be conservative in the first half and expect to get.
Now we start to see some of that growth during the back half.
Specially as we exit the year.
Chris Finn: Okay. All right, thanks, guys. Thanks, friends. I appreciate it. Thank you. I'm sure there are no further questions in the queue.
Okay.
Thanks, guys.
Thanks, Vince per ship.
Thank you.
I'm showing no further questions in the queue at this time I would like to turn the call back to Mr. Chris Finn CFO for closing remarks.
Chris Finn: At this time, I'd like to turn the call back to Mr. Chris Finn, CFO, for closing remarks. Yeah, thanks everyone for joining the call today. We really appreciate it. If you have any questions or follow up, please contact Ed or myself. Thank you. Thank you. This concludes today's conference call. Thank you for attending. You may all disconnect.
Yes, thanks, everyone for joining the call today, we really appreciate it if you have any questions or follow up please contact Ed or myself. Thank you.
Thank you.
This concludes today's conference call. Thank you for attendance you may all disconnect.
Okay.
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