Good afternoon, and thank you for standing by. Welcome to Forrester's Fourth Quarter and Full Year 2025 Conference Call. [Operator Instructions] 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 Bryce Morris. Please go ahead.

Thank you, and hello, everyone. Thanks for joining today's call. Earlier this afternoon, we issued our press release for the fourth quarter and full year 2025. If you need a copy, you can find one on our website in the Investors section. Here with us today to discuss our results are George Colony, Forrester's Chief Executive Officer and Chairman; and Chris Finn, Chief Financial Officer. Carrie Johnson, our Chief Product Officer; and Christophe Favre, our Chief Sales Officer, are also here 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. 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. 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 are discussing our performance on an unadjusted 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 a meaningful comparison and an appropriate basis for our discussion. 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.

Good afternoon, and welcome to Forrester's Q4 2025 and Full Year Earnings Call. I'm joined by our Chief Financial Officer, Chris Finn, who will provide a detailed financial update after my remarks. I'll be covering the following key themes today: one, the progress we made in 2025; two, our financial performance in Q4 and 2025; three, our focus areas for 2026. As I look back at 2025, it is now clear that our clients are operating under a new paradigm shaped by AI. Large companies are confronted with complex buying decisions, disconnected CX journeys and quickly changing customer behavior. At the same time, they're dealing with new technology challenges, how to implement and scale generative AI, how to ensure safe data usage with Agentic AI and how to maximize IT investments amidst a changing buying landscape. Complexity is growing. Forrester is uniquely positioned to help large companies navigate these problems. As I've talked about on recent investor calls, we have strongly pivoted over the last 3 years to align our research with the AI changes, to build AI technology for our clients and to leverage AI technology to help us create research in new ways. Simply stated, we are guiding our clients to seize the AI opportunity to win, serve and retain their customers and to navigate the new risk landscape. True to our long-held positioning, we are researching at the intersection of business and technology where the battle for customers in the age of AI will be waged. Last week, we saw disruption in equity markets as investors feared that AI would destroy the software industry. Will it? No. But it will spawn new technology, what we call AI computing, that will rival, and in some cases, replace the old SaaS model. It is these types of market evolutions…

Thanks, George, and good afternoon, everyone. As George discussed, we're starting to see some meaningful areas of improvement in the business. This includes early success with our new AI Access product, which had over $5 million of bookings since its launch in September, along with an increase in the portion of CV on multiyear contracts in the prior year. We also saw client retention improve throughout the year and client count increased sequentially in the fourth quarter for the first time since late 2021. Furthermore, we delivered strong free cash flow of approximately $18 million for the year. We are looking to continue this momentum in 2026 with ongoing expansion of our product offering, and enhanced focus on creating actionable all-seasons data-centric research and expanding Forrester AI capabilities. Despite this momentum, we are disappointed with Q4 and full year 2025 results. Continued macro uncertainty, the impact of the U.S. government strategy consulting pullback, and the ongoing underperformance of our events business caused us to deliver full year 2025 results near the low end of our guidance. For the quarter, overall revenue was $101.1 million, representing a 6% decline from Q4 2024 revenues of $108 million. Overall revenue for the year came in at $396.9 million, representing an 8% decline from the $432.5 million we generated in 2024. As we've outlined earlier this week, we have taken action to focus the business on our higher-margin subscription research CV business and to better align our cost structure with our projected revenue. We believe these steps will help to accelerate our return to CV growth. I'll now provide some additional details regarding these actions, which are mainly focused on changing the way we operate our consulting and events businesses. In consulting, we plan to sunset the strategy consulting business line in early 2026.…

Thank you, Chris. To summarize, we are laser-focused on NCVI growth in 2026. Our 4 initiatives give us the best path to growth, and we will be diligently executing them throughout the year. The AI wave represents the biggest opportunity in the history of Forrester. We are on the side and by the side of our clients as they navigate these unchartered waters. It's a very exciting time at the company. Thank you for being on the call, and I'm going to hand it back to the operator for the Q&A session.

[Operator Instructions] And I show our first question comes from the line of Andrew Nicholas from William Blair.

First one I had or first line of question is just on the consulting restructure here. It sounds like you expect revenue to be down a little bit over 20% in '26. Can you just kind of bucket the different pieces of the business in terms of size that you are exiting versus continuing? And is that kind of mid- to high $60s million number a good base to think of for '27 and beyond? Any more color on those decisions and those numbers would be great.

Yes. It's Chris. Good question. Yes. So on the sunsetting and strategy consulting, the revenue impact is going to be about approximately $6 million. And as we go forward in '26, we've got a pretty decent sized backlog of approximately $8 million that we'll be servicing throughout the year, probably going to tail off sometime end of Q3, maybe beginning of Q4. So that's really the size of that bucket. And I think the range that you have, high 50s into low 60s is about right.

Got it. And in terms of -- just for my follow-up, in terms of contract value growth year-over-year, down 6%, can you just give me a sense or maybe add some color as to where you are seeing lower wallet retention, maybe what the reasons for cancellation are or any kind of tracking that you're doing there to figure out how much of it is macro sensitivity versus lower seats at your customers or any other reason for exiting?

Yes, Christophe speaking. Yes, we still see some volatility and uncertainties in the area of the U.S. government as well as in the U.S. business on the user side of the business. But we see also pockets of momentum in the international markets where I come from as well as a clear turnaround as well on the high-tech side.

Andrew, government is still having an impact for us.

I show our next question comes from the line of Anja Soderstrom from Sidoti.

So first, can you just elaborate a bit on the product pipeline you mentioned for the year?

Can you repeat that?

Yes. Can you talk about the product pipeline?

Product pipelines for '26?

Yes.

Anja, it's Carrie. Sort of product development, upcoming product changes, etc?

Yes.

Sure. So George alluded to some of those primarily looking to provide our clients with more ways to buy from us and then also when they purchase from us, more ways that we can be embedded in where they work. So a lot of exciting offerings to come that we'll announce this year. I'm happy to talk in depth to you a little bit more about those. But primarily, like I said, looking to capitalize on this moment where clients need advice and trusted expertise from Forrester and making sure that we are offering them ways to work with Forrester and then embedded in their day-to-day work as well.

Anja, we have an AI -- we call it AI Surge, which is really scheduled for the first half of the year. So there's a good backlog here of product improvements and products.

Okay. And you talked about the conference changes to the conference schedule. What other initiatives are you taking to the conference business?

What was the second part of your question about conferences, Anja?

Yes. Yes, what other initiatives you're taking to improve the revenue stream from that.

I'm not sure we're getting the answer, but the question, but...

Yes. I think your question is around improvements that we've made to the conference and event -- the event strategy and also the performance. So there's 2 key areas where we've been focused. The first, as we discussed in prior calls, is about rebuilding the sponsorship sales organization, which is a major effort of ours, and we feel that we're in a really good place there. And the second is on a new event strategy. George and Chris both here talked about really aligning our events to -- better to align with sponsor and attendee needs. That primarily looks like smaller events closer to where our clients are. So -- and also smaller so that folks can interact with their peers with more engagement at those events. So smaller, more localized events essentially for the year.

I think the big innovation in 2025, Anja, was about workshops at the events, and that was -- they were massively successful in '25. You see a lot of that in 2026.

And I show our next question comes from the line of Vincent Colicchio from Barrington Research.

Yes, George, important question here, I think. So why the ongoing disconnect between the value of your research versus LLM models, and in terms of demand? And when do you think this may change?

Yes. So I'd like to give you some color here. I do not see churn as a result of AI replacements. Of course, it's come up into the sales process, but we spend a lot of time over the past months to train our sales organizations to demonstrate the value of Forrester AI Access against the large language model. And what we highlight is our Forrester AI solutions provide proprietary data, proprietary ideas supported by human experts. And when you train your sales organizations in this way, we do not see this churn as a result of that. On contrary, what we start to see on the marketplace is a mistrust of the content provided by some of the LLM. So we do see an opportunity for Forrester that we are going to size with our new product strategy.

So you said mistrust of the public models?

Yes. It's a fun narrative, Vince. It's an easy narrative. But your bank account is never going to end up in a public model. It's just never going to happen. And our proprietary research is never going to end up in a public model as well. And to get trusted data, to get trusted bank account, you're going to go to a private model. Like I said on the last call, but -- there's a very big misallocation of capital going on right now towards the public models. I believe 70%, when this is all done 10 years from now, you look back, 70% of all the revenue from these models will be made in private models, not in public models. So it's a fun native.

That's a helpful perspective. And with the new sales leadership, will there be any change in the sales process going forward?

Yes. So coming from the international sales organization where we had quite a strong H2 last year. I'm applying some of the learning we had over the -- in international to the North American sales organization. So the first thing what I'm doing is reorganize our go-to-market strategy in North America to be organized around 6 industries and focus on the high potential accounts. I want also to ensure that we develop a business development mindset, not only with the AE, but with the AM and then really sharpen on our execution on what we call the retention life cycle with my colleague of the customer success teams in order to improve our retention. We have a lot of opportunities in improving our gross productivity here in North America and returning back to growth with our new AI Access services.

You want to talk about the balanced scorecard as well?

Yes. So it's also the way we measure the sales organization. So I really believe that the sales organization needs to be measured on both sides from a quantitative side, on the pipeline, the activity that they have, but also balance with qualitative elements like pipeline conversions, velocity of the sales, the quality of the sales. So I'm implementing a new way of measuring the quality of our sales activity in order to drive faster growth in the North American business.

Okay. And George, how did AI Access perform versus expectations in Q4? And how is it trending in the new year?

We had a meeting in September where we -- I looked at Carrie and said how many -- how much of this are we going to sell in Q4? I think we were off by 90%. We were quite conservative about it, and it was really quite surprising in Q4, the speed here. So it's interesting, Vince, because what we're finding is that companies want their executives using AI that increases the AIQ, the artificial intelligence quotient of those executives. So that's something that I didn't -- maybe you did, Carrie, but I never really calculated that as a benefit of AI Access. But the fact that they're using AI to use us is, again, improving their AIQ. And obviously, they're able to find our data and research much faster and to create something new and original from that data. So Carrie wants to say something, maybe she...

No, no, you -- that's exactly it. We're really very pleased with the performance of the product, exceeded our expectations and a very strong pipeline coming in the year.

I think what's awesome about this, Vince, is that we've been working with this for now 2.5 years. I mean this is like -- this is version 11. So...

Yes. I'd add one other thing, Vince, this is Chris. It's helping on deal cycle time as well, literally cutting it by almost 50%, which is great to see. And then the client count increase that we saw coming out of the year, it was really in 2 areas. First and foremost, it was with AI Access. That was really all new clients. And we've got a big win-back campaign coming up in the first half of the year here, which we're excited about. And then the retention improvements in the core FD business from the retention life cycle work, the stuff that Julie is working on, we're already seeing it really start to take hold, which is also exciting and one of the other reasons we feel pretty good about the outlook for this year.

Why is the velocity so much faster, Christophe, for AI Access?

It's very simple. It's easier to buy and easier to sell. And I see it as an attractive value proposition, not only to grow within our existing customers, to win new customers, but we see also a very interesting change, which is winning back customers we lost over the last 3 years. And we win them against the competitions or against organizations, and also against organizations that want to build skills internally as opposed to outsourcing it to, for instance, consulting organizations.

Is it helping you win back some new old clients as you hoped?

Yes. And this is such -- and they are so happy when we come back with that type of value propositions, because what they are looking at is to get faster in the way they make decisions and to do it with more confidence. And this is the way we differentiate our large language model. So it's a very strong value proposition for Forrester.

And that concludes our Q&A session. At this time, I'd like to turn the conference back to Chris Finn, Chief Financial Officer, for closing remarks.

Yes. Thanks, everyone, for joining us today. Once again, any follow-up questions, please reach out to myself or Ed. Thank you.

Thank you.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.