Q3 2024 Forrester Research Inc Earnings Call
Good afternoon and thank you for standing by. Welcome to Forcers, start quarter 2024 Conference Call. At this time, all participants are not listening only mode. After the speaker's presentation, they'll be a question and answer session.
Please be advised that today's conference has been recorded.
I would not like to turn the conference over to Vice President of Corporate Development and Investor Relations at Brights Morris. Please go ahead.
Brights Morris: Thank you, and hello everyone, thanks for joining today's call. Early this afternoon we issued our press release for the third quarter, 2024. If you need a copy, you can find one on our website in the Investors section.
Brights Morris: Here with us today to discuss our results, our George Colony, Boris's chief executive officer and chairman, and Chris Finn, chief financial officer. Kerry Johnson, our chief product officer and Nate Swan, chief sales officer are also here for the Q&A section of the call.
Brights Morris: 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.
Brights Morris: Words such as expects, believes, anticipates, intends, plans, estimates, or similar expressions are intended to identify these forward-looking statements.
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 statements.
Brights Morris: 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 obligations to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise.
Brights Morris: Lastly, consistent with our previous calls, today we will be discussing our performance on an unadjusted basis, which excludes items affecting comparability.
Brights Morris: While reporting on an unadjusted basis is not in accordance with GAP, we believe that reporting numbers on this adjusted basis provides a meaningful comparison and an appropriate basis for our discussion.
Speaker Change: You can find a detailed list of items excluded from these adjusted results in our press release and with that I'll hand it over to George
George: Thank you, Ed. Good afternoon and thank you for joining Forrester's 2024 Q3 Investor Call.
George: Today I will be covering the following key topics. One, Forscher's third quarter performance.
George: 2. Enhancements to the Foreshore Decisions product and other research changes.
George: 3. An overview of our go-to-market strategy, and 4. The Forrester Board of Clients.
George: We showed progress on several fronts in the third quarter, while challenges in other parts of the business persisted.
Brights Morris: We are ahead of schedule on the FD migration with 78% of contract value or CV now in FD.
Brights Morris: We are projecting that we will finish the year with over 80% of CV in Forrester decisions.
Brights Morris: We will move into 2025 with the four-year migration journey substantially completed.
Brights Morris: Now that said, we continue to navigate through choppy economic waters, with revenue declining 10% in the quarter and CV declining 5%.
Brights Morris: We now expect full-year contract value to be flat to marginally down, a modest adjustment from our previous estimate of CV flat to slightly up by year-end.
Other metrics have continued to stabilize. Our wall retention is 89% flat from the previous quarter, and climb retention is up slightly, and Chris will go into more detail shortly.
Brights Morris: Despite the challenges, we saw good performance in premier high-tech, international, and government.
Brights Morris: Large wins of the quarter included a 2.5 million dollar two-year deal with a large multinational tech company in the Asia-Pacific region, our second largest international deal of the year.
Brights Morris: We also migrated an agency of the U.S. government from a legacy research contract to a 1.6 million dollar Forsure decisions portfolio.
Brights Morris: And what won these deals and continues to propel FT through the migration is the product's research and continuous guidance architecture.
Brights Morris: A model that provides clients with deep research to improve decision-making, plus periodic sessions with analysts to help companies achieve their goals.
Brights Morris: Unlike research libraries, Foreshore Decisions features direct access to analysts.
Brights Morris: And unlike consulting projects, we never leave our clients. We are there to consistently guide them through their evolving challenges.
Brights Morris: Forrester Decisions is unique in the market.
Brights Morris: and we continue to enhance the product.
Brights Morris: In response to the growing interest and demand in artificial intelligence, we launched the FD service for data, AI, and analytics leaders in the third quarter.
Brights Morris: This service will position executives, functional leaders, and their teams to pursue their most pressing priorities, including, one, activating effective data and AI strategies.
Brights Morris: 2. Architecting AI and modern data platforms and applications 3. Developing safe governance for AI and data
Brights Morris: 4. Driving decisions with business intelligence and data science, and finally, 5. Building an adaptive data organization and culture.
Speaker Change: On previous calls, I've talked about Izola, Forrester's generative AI research portal, and I wanna give you a quick update here.
Speaker Change: IZOLA has been under development for the last year. It won a debated test with a select group of clients late in 2023, and it was made available to all Forrester Decisions clients in Q3 of 2024.
Brights Morris: IZOLA is a proprietary language model encompassing the full corpus of Forrester's research database.
Brights Morris: It enables clients to converse with our research, with answers generated from our reports, graphics, and waves.
Brights Morris: Unlike search, which yields access to specific reports, iZola generates synthetic answers, drawing from all Forrester research sources.
Brights Morris: IZOLA has now become the third most used feature of the FD platform and we expect it to pass search in the near future.
Brights Morris: Now since the public launch, we've focused on ongoing improvements to iZola to make it even more useful to clients.
Brights Morris: We've improved vendor recommendations by grounding answers in the results of our forestry wave and landscape research. And this was a top use case for our clients and it has led to improved feedback scores.
Brights Morris: Other enhancements include in-line citations to link IZOLA answers to our source research and improvements to usability and customization.
Brights Morris: In Q3, on a unique user basis, IZOLA prompts increased by 40% quarter over quarter.
Brights Morris: Now I want to switch topics and say a few words about our go-to-market strategy.
Brights Morris: In very simple terms, our selling motion is driven by four elements. One, selling to C-level executives who have the budget and authority to apply our research.
Brights Morris: 2. Ensuring that our sales activities are standardized and consistently followed.
Brights Morris: 3. Applying our sales methodology, what we call FAST, to reduce the time to close business. And 4. Running our retention life cycle, a standard process for periodically checking in with the economic buyer of our research to ensure that value is being delivered.
Brights Morris: Forsher's head of sales, Nate Swan, is fond of saying that these four elements of Forsher's sales are set and we do not expect to change them next year or the year after.
Brights Morris: They are the fundamental building blocks of returning forest to growth and to scale research contract value at double digits on a consistent basis.
Brights Morris: Dave will be in the Q&A portion of this call, so you can go deeper with him if you have questions.
Brights Morris: Two weeks ago, Forrester's Board of Clients convened in Cambridge.
Brights Morris: This is the 26th year of the board, and it has had enormous impact on the company's strategy, products, acquisitions, and operations over many years.
Brights Morris: Clients serve on the board for three years, and it is currently represented by a distinguished group of companies, including Bank of America, Prudential, Citgo, Lexmark, Bridgestone, Travelers, and a number of other organizations.
Brights Morris: These clients represent our future as they have all made the transition to forester decisions and we work with them at the sea level.
Brights Morris: I'm not going to go into great depth here on the findings of the meeting but I thought that one set of comments could be helpful.
Brights Morris: I know that it is sometimes difficult for investors to grasp Forrester's value for its clients. What we sell is not software or tangible product, but rather better decision making, operational excellence, and vision of the future.
Brights Morris: So at the Board of Clients meeting, we asked the board members a simple question.
Brights Morris: If your CFO came to you and wanted to cut the forester contract, what would you say? Here are a few of the responses.
Speaker Change: If you cut Forrester, I will have to bring in an additional headcount to get the work done. Forrester augments my team.
Brights Morris: Another commented on the ROI benefits of Forrester, saying, Compared to McKinsey, Bain, and other consultants, Forrester is affordable. The return on investment is very high.
Brights Morris: and another emphasized the value of Forrester's continuous guidance saying Forrester helps us get from here to there. They are geniuses at that.
Brights Morris: And finally, a large U.S. federal government CIO said, We need Forrester to look out into the next five years and prepare us for that future. No one else in our organization can do that, and it's something that we desperately need so we can serve citizens better.
Brights Morris: To end my remarks, I continue to be confident about our future.
Brights Morris: Our transition to forester decisions is nearing completion. Our sales system has been built.
Brights Morris: Generative and predictive AI represent new challenges for our clients and therefore opportunity for Forrester.
Brights Morris: and technology change remains fast and challenging.
Brights Morris: As a company, we are clear in our priorities and the team is laser focused on execution. We know the way forward.
Brights Morris: Thank you very much for being with us this afternoon. I will now turn the call over to Chris Finn, Forrester's CFO. Chris?
Chris Finn: Thanks, George, and good afternoon, everyone. Our third quarter delivered mixed results.
Brights Morris: Although our CV bookings perform below plan, the Forrester Decisions migration remains on track. Retention metrics are stable.
Brights Morris: and we are maintaining our revenue margin and EPS guidance for the year. The fourth quarter is our largest bookings period, and we believe CV is continuing to stabilize and could end in a range of flat to slightly down.
Brights Morris: In addition, we divested our FeedbackNow product line in the third quarter. FeedbackNow was a real-time customer feedback product that we acquired six years ago and was considered non-core to our focus on driving growth in the Forrester Decisions platform.
Brights Morris: We received $6 million in cash from the sale during the quarter and a note for $9 million that is due in 2025.
Brights Morris: Furthermore, we retained a small equity stake in the new standalone business. Although this product line was not a material portion of the CV business, we have recast our historical CV, retention metrics, and client count for better comparability going forward, and the metrics discussed today reflect this update.
Brights Morris: CV declined 5% in Q3 to $315.2 million.
Brights Morris: compared to the 4% decline in Q2.
Brights Morris: Overall, revenue decreased 10%, on par with the prior quarter. For the total company, we generated $102.5 million in revenue, compared to $113.4 million in the prior year period.
Brights Morris: In terms of our revenue breakdown for the quarter, research revenues decreased 4% compared to the third quarter of 2023, with revenue from our subscription research products down 1%, coupled with declines in our reprint and other smaller and discontinued products.
Brights Morris: Overall client retention was 73%, up slightly compared to Q2, and Watt retention was 89%, flat to Q2. While Forrester Decision's specific client retention of 81% and Watt retention of 89% were flat and down slightly, respectively, versus the second quarter.
Brights Morris: As we complete the forest and decision migration in 2024, we expect retention metrics to slowly improve into 2025.
Brights Morris: 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 8 points.
Brights Morris: We remain on track for a Forrester Decisions migration plan, and we now have approximately $246 million of CV, or 78% of total CV, on the platform. We are targeting being greater than 80% of total CV on Forrester Decisions at year-end.
Brights Morris: The remaining CV primarily represents our reprint products, along with approximately 5% of CV remaining in our legacy research products.
Brights Morris: Our consulting business posted revenues of $23.4 million, which was down 17% compared to the prior year. However, we did see signs of stabilization with our bookings performance this quarter for both consulting and advisory.
Brights Morris: specifically seeing positive growth in our strategy consulting business with increased engagement across clients. Although performance has been uneven overall for consulting this year, we're encouraged by these early signs.
Brights Morris: The decline in revenue was driven in part by the decision to merge two of our events into a single event, as well as push another event into Q4. However, we continue to see softness with event sponsorship and attendance, which we are working to mitigate.
Brights Morris: continuing down our P&L on an adjusted basis.
Brights Morris: Operating expenses for the third quarter decreased by 7%, primarily driven by lower compensation and related costs. Specifically on headcount, for the third quarter we were down 8% compared to the same period in 2023. We continue to monitor headcount, hiring, and attrition very closely.
Brights Morris: Operating income decreased by 33% to $8.2 million or 8% of revenue in the current quarter, compared to $12.3 million or 10.8% of revenue in the third quarter of 2023.
Brights Morris: Lower operating income and margin were primarily driven by the revenue declines in our consulting and events businesses.
Brights Morris: Interest expense for the quarter was $0.8 million, consistent with the third quarter of 2023.
Brights Morris: Finally, net income and earnings per share decreased 35% and 34% respectively, compared to Q3 of last year, with net income at $5.6 million and earnings per share at $0.29 for the current quarter, compared with net income of $8.6 million and earnings per share of $0.44 in the third quarter of 2023.
Brights Morris: and the rest of us. Thank you. Thank you. Thank you. Thank you.
Brights Morris: Looking at our capital structure, year-to-date cash flow from operating activities was negative $2 million, and capital expenditures were $2.7 million. Cash flows were negatively impacted by the payment of the litigation settlement earlier in the year as well as severance payments incurred during the year. We had $114.9 million of cash and investments as we exited the quarter. We repurchased approximately $5 million worth of shares in the quarter. This leaves approximately $83 million of our stock repurchase authorization intact.
Brights Morris: As noted earlier, guidance for 2024 is unchanged, so let me provide some additional commentary on the remainder of the year.
Brights Morris: Revenue is still expected to be in the range of $425 million to $435 million. This guidance assumes the outlook for the research business to be a mid-single-digit decline, a decline in our consulting business in the low 20s, and a decline in our events business in the low 30s for the year.
Brights Morris: Operating margins are still expected to be in the range of 8.5% to 9.5%. Interest expense is expected to be approximately $3 million for the year, and we are continuing to guide to a full year tax rate of approximately 29%.
Brights Morris: Taking all of this into account, we are maintaining earnings per share in the range of $1.37 to $1.57.
Brights Morris: As expected, 2024 has proved to be a challenging year as we finish the multi-year journey of the Forrester decision's migration amid a troubled macroeconomic environment.
Brights Morris: We remain focused on finishing the year with a strong Q4 performance to set us up for a positive 2025.
Brights Morris: We continue to remain upbeat about the Forrester Decisions platform and its continuous guidance model, the ability of consulting events to support research, the importance of technology disruption as a demand driver, and the go-to-market improvements, all fueling the long-term outlook for the business.
Brights Morris: Thank you all for taking the time today. And with that, I will hand the call back to George.
Brights Morris: Thank you, Chris.
George Colony: As you know, Q4 is a very busy time at Forrester. We book close to 40% of our business in the quarter.
George Colony: I'm glad to report that the entire company is focused on using the quarter to build a strong platform for 2025 and to make the final push on transitioning our legacy clients over to Forrester Decisions.
Brights Morris: Thank you for being on the call and I will now turn the call back to the operator for questions and answers.
Speaker Change: Thank you, sir. As a reminder to ask a question, you will need to press star 1-1 on your telephone.
Speaker Change: To withdraw your question, please press Star-11 again.
Speaker Change: Please stand by while we compile the Q&A roster.
Speaker Change: And I assure our first question comes from the line of Andrew Nicholas from William Blair. Please go ahead.
Andrew Nicholas: Hi, good afternoon. Thank you for taking my questions. I wanted to start by asking kind of the end market health broadly. Sounds like CV bookings were a bit below plan. Just curious if that's primarily an end market issue, if there's anything from an execution standpoint that you'd point to. Maybe we start there.
Speaker Change: Thank you for watching!
Andrew Nicholas: Subs by www.zeoranger.co.uk
Brights Morris: Sure, Andrew. It's Nate Swan. How are you? Thanks for the question.
Nate Swan: So we saw really good performances across several sectors and we had some weakness in one particular group where we were not necessarily executing as well as we thought we should be. We've actually made some slight changes in that group and feel like we're on track and actually based on the forecast for Q4.
Nate Swan: from a booking standpoint. I think Chris and I are pretty comfortable with where we're headed to. So we're seeing some really good progress. It's just all progress doesn't happen at the exact same time. So we feel like we are still on track.
Speaker Change: Thank you for watching!
Speaker Change: Great, and then maybe just from a bigger picture level, do you have a sense or an early sense of what budgets of your clients kind of look like for 2025 compared to maybe what you've seen in the past couple years?
Speaker Change: Thank you.
Speaker Change: https://www.youtube.com or the link in the description below.
Speaker Change: Hey Andrew, it's Carrie Johnson. Sure, we are actually both according to our research and from what we're seeing we know that tech budgets are increasing in 2025 which plays very nicely to of course Forrester's strategy and also you know our biggest opportunity here is with the technology executives and their teams which is where in fact we are seeing the most growth right now. So that's the early read.
Speaker Change: Also feels like the vendor world is stabilizing. As you know, there have been about a million layoffs in tech in the U.S. in the last 18 months. It feels like that world is stabilizing.
Speaker Change: Thank you for watching!
Speaker Change: Great, and then maybe if I could just ask one more...
Speaker Change: for Nate, or...
Speaker Change: I guess, George, feel free to answer as well. But there's all these different things that you've implemented. You feel very, sounds very confident about kind of all the different procedures in place and that these are multi-year kind of platforms for execution.
Speaker Change: I just wanted to ask about kind of how you measure traction of those go-to-market motions in an environment that's a little bit more challenging. Does it make it harder to know?
Speaker Change: you know, what's working and what's not. And if there's any other color you could give on, you know, maybe the top one or two metrics that are top of mind for you on a daily basis. Thank you.
Speaker Change: Yeah sure, great question. So we look at really our progress quarter over quarter in a variety of areas. We look at our pipelines, we look at our retention, we look at how we're executing various components of what George referred to as our retention lifecycle.
Speaker Change: So that's a newer motion for Forrester. And we are really involved in rolling that out across the sales organization. So I look at it in a couple of ways. Number one, are they happening? And they are happening. They're not as happening as frequently as we would like them to, but they are definitely happening. And we're getting.
Speaker Change: Really good anecdotal feedback from both our clients.
Speaker Change: as well as internal stakeholders at Forrester. Both our sales and our customer success teams like the way it is organized and how it helps them stay on track with the right task at the right time. And we're finding that
Speaker Change: While we may have some gaps in how we've been working with things, it's identifying those gaps really, really quickly.
Speaker Change: So, overall, I would say the message is
Speaker Change: These are new motions for a lot of Forrester folks.
Speaker Change: Um...
Speaker Change: new for our clients. Our clients and our Forrester stakeholders are responding really well. We're getting great ecosystem support from across the organization so our analyst community really leaning in to help us understand what's working at our clients.
Speaker Change: And so we'll look at retention and we'll look at the execution metrics and see where we're doing well and then see how the results fall from there.
Speaker Change: It's still early days, Andrew. I mean, we're looking for $500,000 of rolling pipe per quarter bearing headcount. And we got close to that in Q3, but then we looked a little bit closer at the opportunities and began to
Speaker Change: to analyze those opportunities, and they were just not as solid as we would have wanted. So that's the next turn of the crank, is to actually using a methodology called MedPIC to very closely examine all the opportunities to make sure the $500,000 a pipe is strong and is viable.
Speaker Change: So, the systems are in place and the systems are beginning to work, and we're feeling good with the progress. Yeah, and as George mentioned in the pre-recorded remarks, that we, this is not changing quarter over quarter, year over year, this is the plan going forward. We are following this plan.
Speaker Change: and the sales organization knows that the rest of the organization knows that this is what we're doing. We're not going to add on five new things at the beginning of next year and say we're going in a different direction.
Speaker Change: You know, we have our plan, we're expecting to execute, call high, make sure you have a lot of activities, use our sales methodology, and run the retention life cycle.
Speaker Change: Thank you for watching!
Speaker Change: Very helpful. Thank you.
Speaker Change: Thank you for watching!
Speaker Change: Thank you.
Speaker Change: And I assure our next question comes from the line of Anja Söderström from Stability. Please go ahead.
Anja Söderström: With the new guidance for the contract value bookings, how should we think about the revenue growth for next year?
Speaker Change: Hi, it's Chris. Sorry, do you say the on conferences?
Speaker Change: That is contract value.
Speaker Change: All contract value, yeah, yeah, for next year, sure. Yeah, so, so, um, we're not necessarily providing, you know, a 25-volt look on the call. I mean, as you know, fourth quarter, it's our largest bookings quarter of the year. Uh, December's by far the largest bookings month for us.
Speaker Change: So what I can say is we're encouraged by the ongoing stabilization in CV.
Speaker Change: and our retention metrics. We're very confident in the FT platform as we go forward here and all the go-to-market initiatives that we're implementing.
Speaker Change: I'd say we have to see where this election goes and where the economy goes in the next year But we do expect that, you know, based on the signs we're seeing, CV will continue to be stable and grow as we move through the year combined with improving consulting and events bookings performance Off of the lows that we've seen and we already talked a little bit about some of the bright spots in consulting So I'd say for 25 the results will certainly improve from the double-digit revenue declines That we're seeing in this year in 24 But I don't expect
Speaker Change: significant material growth on revenue, just based on how we're going to ramp bookings through the year. And then, obviously, we'll provide more detail on the call in February, but I think, you know, look, we're maintaining, you know, our positive outlook as far as stabilization is concerned. And then, you know, we have to get into next year and really get through this quarter. I mean, this is a big quarter for us. I can tell you that October looked well. We hit our plan in October, which was a great sign. And, you know, we've got a big November, December in front of us. We just talked about the pipeline building. I think, you know, Nate and the sales organization feel pretty confident about landing on the quarter. So we have to see how we get through the rest of the period. And then we'll give a more detailed guide for next year. But, in general, sort of that's what I see for...
Speaker Change: for CV performance next year as we ramp and then, you know, just a general sense of kind of revenue direction.
Speaker Change: Thank you for watching!
Speaker Change: Okay, thank you.
Speaker Change: sort of shedding the smaller clients. When do you think you will be done with that and we'll start seeing the client counts go up?
Speaker Change: Yeah, I'll start and maybe Carrie and Chris might want to jump in on you. It's Nate. So we're seeing a much smaller impact from that group and we expect in 2025 it will continue to be a smaller. We've gone through most of the, there's really two things. There's the migration journey and then there's the smaller client that we are no longer targeting as a specific buying opportunity for us. So we, we're seeing less and less impact. Our emerging tech team is actually performing pretty well this year with all things considered in the tech market, feel very confident in the leadership in that group and what that team is doing. So I feel like next year that team is going to be on a really good trajectory.
Speaker Change: are here to talk to you about the Emerging Tech Sales Group, and we're going to be through the roughest of seas that we've been with. Yeah, and as you know, Anya, the Emerging Tech Sales Group sells to vendors over $50 million in size. Yeah. So we're not playing below $50 million at this point.
Speaker Change: I was just going to add on the sub 50 I mean that at this juncture you know we're going to exit the year that's going to be less than six percent
Speaker Change: of the overall base.
Andrew Nicholas: Okay, thank you, that was helpful. And then in terms of the sales team, is that fully?
Speaker Change: up and running or are they still being trained or how, where do you feel like your sales team is so when it does pick up?
Speaker Change: Great question, Anya. So the sales organization spent a lot of time on
Speaker Change: on training and development upscaling. We're targeting our senior executives, as we mentioned, and to do that, we've worked on our sales methodology, trying to really understand how to work better with those senior executives and connect to their initiatives that they're looking for.
Speaker Change: Um...
Speaker Change: you know, we will continually do ongoing support for the sales organization to make sure that they can, that they can call high and that they can build out those team solutions as well as winning the organization solution. So, we can sell across the whole organization and make sure that we can penetrate. So that, that kind of change will never stop. It's a, it's a continuous development. But the heavy lift of a new sales methodology was rolled out really in from the April timeframe until the mid-June-July timeframe. Now it's refreshing, doing clinics and making sure that people are up to speed and that obviously you'll have new hires that will be joining the organization and that will be continuing to ramp them up.
Speaker Change: to join. So the sales organization has been great really leaning into all these changes.
Speaker Change: around building pipelines, working on the sales methodology, and implementing this retention life cycle. Really happy with how they've responded to that. I think they see how it helps them do their job better, and they want to continually get better. People want to be successful in their roles, and so they're really leaning in to do that.
Speaker Change: Thank you for watching!
Speaker Change: Okay, thank you. That was helpful. That was all for me.
Speaker Change: Thank you, Andy. Thank you.
Speaker Change: Thank you.
Speaker Change: And I show our next question comes from the line of Vincent Calicchio from Barrington Research. Please go ahead
Vincent Calicchio: Yes, Nate, you had mentioned selling higher end organizations and a question I'd like to ask you is if you're hitting
Vincent Calicchio: if your ability to penetrate senior people in organizations is meeting your expectations.
Speaker Change: Thank you for watching!
Speaker Change: Well, Vince, I think we would all love to go faster in, you know, being able to get to more senior executives and make sure that we're selling Forrester to the most senior people that we can in every part of the organization. I think the progress that we've made is good progress.
Speaker Change: What I'd love to go faster, of course I'd love to go faster because I think that would mean we would be selling more, but the team has been very responsive. They really like
Speaker Change: the sales methodology that they that they're using, the managers are coaching it, we're using deal clinics that are that are working really well. So I think we're going to continue to see progress.
Speaker Change: We know that when we're at the most senior levels of organizations
Speaker Change: we get great buy-in from them, we get the great buy-in from their teams, and then we start to cross-sell in the organization. So people know that that is the key to being successful. It's not an overnight journey to be able to say, hey, now I'm going to start calling high. But that's the journey we're on right now. So feel good.
Speaker Change: And then to be clear, the decline in clients was relatively high this quarter. Was that small clients?
Speaker Change: Thank you for watching!
Speaker Change: So yeah, Vince, this is Chris. So I think you're seeing that it was a combination of both small clients, but also we restated the client numbers.
Speaker Change: for the removal of the divestiture feedback now and so we restated those client numbers so that's also part of the reason why you're seeing it come down. So 250 clients. Yeah, exactly.
Speaker Change: Does that make sense, Vince?
Vincent Calicchio: Yes, yes, yes.
Speaker Change: and you have to have something in there.
Speaker Change: Most of those feedback non-clients were small.
Speaker Change: Thanks for watching!
Speaker Change: Okay.
Speaker Change: And then, Nate, what's the most common pushback you're hearing from clients that are slow to expand FD seats?
Speaker Change: Thank you for watching!
Nate Swan: The most common pushback we hear, certainly we hear budget is a continual challenge, but we in sales know that when we hear budget as a challenge that we need to do a better job demonstrating value.
Speaker Change: So, budget is an easy way for a client to push back, but if we're connected to those...
Speaker Change: most important initiatives that our clients have. We are a small fraction of what it costs to work with the Baines and McKinsey's of the world that work on those same type of challenges and we know we can deliver against that. So when we do that...
Speaker Change: And we show the value and connect out to how we would help them solve on a continuous basis that continuous guidance that we provide.
Speaker Change: then we see that we do really well. And we've seen some great wins, some really good wins in the last quarter where we had some really big opportunities where we did build out those larger solutions for clients because we connected to their top initiatives of the top leaders.
Speaker Change: Thank you for watching!
Speaker Change: Okay, thank you.
Speaker Change: Thanks, folks.
Speaker Change: Thank you.
Speaker Change: That concludes our Q&A session. At this time, I'd like to turn the conference back to Chris Finn, CFO, for closing remarks.
Chris Finn: Yeah, thanks for joining us today, everyone. Any follow-up questions, please call myself or Edward Morris. Thank you. Thank you very much.
Speaker Change: Thank you. This concludes today's conference call. Thank you for attending. You may all disconnect.