Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

This Quarterly Report on Form 10-Q contains 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. Reference is made in particular to our statements about changing stakeholder expectations, product development, possible acquisitions, future dividends, future share repurchases, future growth rates, operating income and cash from operations, future tax rates, future remittance of unremitted earnings, future deferred revenue, future compliance with financial covenants under our credit facility, future interest expense, anticipated increases in, and productivity of, our sales force and headcount, the adequacy of our cash, and cash flows to satisfy our working capital and capital expenditures, the anticipated impact of accounting standards, ongoing renovations of our Cambridge, Massachusetts office space and anticipated capital expenditures, any future impairment charges we may incur, and anticipated future declines in consulting revenue. These statements are based on our current plans and expectations and involve risks and uncertainties. Important factors that could cause actual future activities and results to differ include, among others, our ability to retain and enrich subscriptions to, and licenses of, our Research products and services, our ability to fulfill existing or generate new consulting engagements and advisory services, any adverse economic conditions, including from trade policies and tariffs, that result in a reduction in technology spending or demand for our products and services, our international operations expose us to a variety of operational risks which could negatively impact us, our ability to offer new products and services, the use of Generative AI in our business and by our clients and competitors, our dependence on key personnel, our ability to attract and retain qualified professional staff, our ability to respond to business and economic conditions and market trends, our business with the U.S. Government, the impact of our outstanding debt, competition and industry consolidation, possible variations in our quarterly operating results, the actual cost of capital expenditures that we undertake, concentration of our stock ownership, the possibility of network disruptions and security breaches, our ability to enforce and protect our intellectual property rights, compliance with privacy laws, taxation risks, any weakness identified in our system of internal controls, and any future impairment charge we incur. These risks are described more completely in our Annual Report on Form 10-K for the year ended December 31, 2025 and in this Quarterly Report on Form 10-Q. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.

We derive revenues from subscriptions to our Research products and services, subscriptions to, and individual licenses of, electronic "reprints" of our Research, performing consulting projects and advisory services, and hosting events. We offer contracts for our products as either multi-year contracts or annual contracts, which are typically payable in advance on an annual basis. For certain contracts, we offer to invoice the contract price in multiple invoices throughout the year. Billings in excess of revenue recognized are recorded as deferred revenue. Subscription products are recognized as revenue over the term of the contract. Individual reprint licenses include an obligation to deliver a customer-selected research document and certain usage data provided through our platform, which represents two performance obligations. We recognize revenue for the performance obligation for the data portion of the reprint ratably over the license term. We recognize revenue for the performance obligation for the research document at the time of providing access to the document. Clients purchase consulting projects and advisory services independently and/or to supplement their access to our subscription-based products. Consulting project revenues, which are based upon fixed-fee agreements, are recognized as the services are provided. Advisory service revenues, such as speeches and advisory days, are recognized when the service is complete. Events revenues consist of ticket and sponsorship sales for a Forrester-hosted event, and revenue is recognized upon completion of each event.

Our primary operating expenses consist of cost of services and fulfillment, selling and marketing expenses, and general and administrative expenses. Cost of services and fulfillment represents the costs associated with the production and delivery of our products and services, including salaries, bonuses, employee benefits, and stock-based compensation expense for all personnel that produce and deliver our products and services, including all associated editorial, travel, and support services. Selling and marketing expenses include salaries, sales commissions, bonuses, employee benefits, stock-based compensation expense, travel expenses, promotional costs, and other costs incurred in marketing and selling our products and services. General and administrative expenses include the costs of the technology, operations, finance, and human resources groups and our other administrative functions, including salaries, bonuses, employee benefits, and stock-based compensation expense. Overhead costs such as facilities, net of sublease income, and annual fees for cloud-based information technology systems are allocated to these categories according to the number of employees in each group.

Our key metrics focus on our contract value ("CV") products. We are focusing on CV products as these products are our most profitable products and historically our contracts for CV products have renewed at high rates (as measured by our client retention and wallet retention metrics). Our CV products make up essentially all our research revenues, and research revenues as a percentage of total revenues increased from approximately 74% for the nine months ended September 30, 2025 to approximately 77% for the nine months ended September 30, 2026.

We calculate CV at the foreign currency rates used for internal planning purposes each year. For comparative purposes, we have recast historical CV and wallet retention at the planned 2026 foreign currency rates. We have included the recast metrics below for the nine months ended September 30, 2025, and we have also provided recast metrics dating back to the third quarter of 2024, on the investor relations section of our website.

Contract value, client retention, wallet retention, and number of clients are metrics that we believe are important to understanding our research business. We define these metrics as follows:

Client retention and wallet retention are not necessarily indicative of the rate of future retention of our revenue base. A summary of our key metrics is as follows (dollars in millions):

Contract value at September 30, 2026 decreased by 4% compared to the prior year period due to wallet retention, which represents retention and enrichment of the prior year CV base, being at 89% for the period. New client acquisition contributed approximately 8 percentage points of new CV during the period. Client retention increased by 4 percentage points at September 30, 2026 compared to the prior year period, and increased 1 percentage point compared to the prior quarter. The increase in client retention compared to prior year period was primarily due to our ongoing retention initiatives and to the launch of our AI Access product in the third quarter of 2025. Wallet retention increased by 3 percentage points at September 30, 2026 compared to the prior year period, and was consistent compared to the prior quarter. The increase in wallet retention compared to the prior year period was primarily due to improved client retention.

Management's discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP"). The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including but not limited to, those related to our revenue recognition, credit losses on the note receivable, and goodwill. Management bases its estimates on historical experience, data available at the time the estimates are made, and various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Our critical accounting estimates are described in our Annual Report on Form 10-K for the year ended December 31, 2025.

Results of Operations

The following table sets forth our statement of operations as a percentage of total revenues for the periods indicated:

Three and Nine Months Ended September 30, 2026 and 2025

Revenues

Research revenues are recognized as revenue primarily on a ratable basis over the term of the contracts, which are generally 12 or 24-month periods. Research revenues decreased 3% and 5% during the three and nine months ended September 30, 2026, respectively, compared to the prior year periods, primarily due to the decrease in CV, as discussed above. From a product perspective, the decrease in revenues during the three and nine months ended September 30, 2026 was primarily due to a decline in revenue from subscriptions to our research as well as a decrease in reprint revenue.

Consulting revenues decreased 31% and 20% during the three and nine months ended September 30, 2026, respectively, compared to the prior year periods. The decrease in revenues during the three and nine months ended September 30, 2026 was due to a decrease in delivery of consulting services due to lower client bookings for both strategy consulting and content marketing. In February 2026, we announced that we would discontinue selling strategy consulting engagements and would fulfill our backlog of

strategy consulting engagements during 2026. Our ongoing consulting business will consist of content marketing consulting and advisory. We anticipate that, on a year over year basis, our 2026 consulting revenues will decline in the low 20 percent range due primarily to the cessation of strategy consulting in 2026.

Events revenues increased 629% and decreased 7% during the three and nine months ended September 30, 2026, respectively, compared to the prior year periods. The increase in revenues during the three months ended September 30, 2026 was due to holding two events in the third quarter of 2026 that were held in the fourth quarter of the prior year. The decrease in revenues during the nine months ended September 30, 2026 was due to a decrease in event ticket revenue, due primarily to a decrease in the pricing of tickets.

Refer to the "Segments Results" section below for a discussion of revenues and expenses by segment.

Cost of Services and Fulfillment

Cost of services and fulfillment expenses decreased 9% during the three months ended September 30, 2026 compared to the prior year period. The decrease was primarily due (1) a $2.3 million decrease in compensation and benefits costs due to a decrease in headcount, partially offset by an increase in incentive bonus costs, (2) a $0.7 million decrease in professional services costs related to the decrease in consulting revenues, (3) a $0.6 million decrease in stock compensation expense, and (4) a $0.5 million decrease in facilities costs primarily due to a decrease in lease expense. These decreases were partially offset by a $0.8 million increase in event costs due to holding two events in the third quarter of 2026 that were held in fourth quarter of the prior year.

Cost of services and fulfillment expenses decreased 8% during the nine months ended September 30, 2026 compared to the prior year period. The decrease was primarily due (1) a $3.5 million decrease in compensation and benefits costs due to a decrease in headcount, partially offset by an increase in incentive bonus costs and benefit costs, (2) a $2.4 million decrease in facilities costs primarily due to a decrease in lease expense, (3) a $1.8 million decrease in professional services costs related to the decrease in consulting revenues, (4) a $1.4 million decrease in stock compensation expense, and (5) a $1.1 million decrease in event costs due primarily to the reformatting of certain of our events to smaller regional venues.

Selling and Marketing

Selling and marketing expenses decreased 7% during the three months ended September 30, 2026 compared to the prior year period. The decrease was primarily due to (1) a $1.2 million decrease in compensation and benefits costs due to a decrease in headcount and commissions expense and (2) a $0.4 million decrease in facilities costs primarily due to a decrease in lease expense.

Selling and marketing expenses decreased 6% during the nine months ended September 30, 2026 compared to the prior year period. The decrease was primarily due to (1) a $2.9 million decrease in compensation and benefits costs due to a decrease in headcount and commissions expense, partially offset by an increase in incentive bonus costs and benefit costs, (2) a $1.9 million decrease in facilities costs primarily due to a decrease in lease expense, and (3) a $1.2 million decrease in professional services costs.

General and Administrative

General and administrative expenses were consistent during the three months ended September 30, 2026 compared to the prior year period.

General and administrative expenses increased 3% during the nine months ended September 30, 2026 compared to the prior year period. The increase was primarily due to (1) a $1.3 million increase in legal costs and (2) a $0.5 million increase in professional services costs. These increases were partially offset by a $0.7 million decrease in facilities costs primarily due to a decrease in lease expense.

Depreciation

Depreciation expense was consistent during the three months ended September 30, 2026 compared to the prior year period. Depreciation expense decreased by $0.5 million during the nine months ended September 30, 2026 compared to the prior year period due to certain software and leasehold improvement assets becoming fully depreciated.

Amortization of Intangible Assets

The fluctuation for amortization expense was immaterial during the three and nine months ended September 30, 2026 compared to the prior year periods.

Goodwill Impairment

As a result of the substantial and sustained decline in our stock price and our overall market capitalization from December 31, 2025 through March 31, 2026, it was determined that a triggering event occurred as of March 31, 2026, indicating goodwill may be impaired. Accordingly, we conducted a quantitative impairment test of our goodwill as of March 31, 2026 for our two reporting units (Research and Consulting) that have goodwill. As a result of the quantitative impairment test performed, we determined goodwill was impaired for our Research reporting unit and recorded a goodwill impairment charge of $10.8 million during the period ended March 31, 2026, which is not deductible for tax purposes.

We concluded that a triggering event did not occur during the three months ended June 30, 2026 and September 30, 2026 and as such, a quantitative impairment test of goodwill was not required during the periods. We will continue to monitor relevant facts and circumstances, including future changes in our stock price. We may be required to record additional goodwill impairment charges. While we cannot predict if or when additional goodwill impairments may occur, future goodwill impairments could have material adverse effects on our results of operations and financial condition.

As a result of the substantial and sustained decline in our stock price and our overall market capitalization from mid-February 2025 through March 31, 2025, along with other qualitative considerations, including the impact from conditions in the macroeconomic environment, uncertainty created by changes in the United States' trade policies, and the larger than expected decline in contract bookings during the first quarter of 2025, it was determined that a triggering event occurred as of March 31, 2025, indicating goodwill

may be impaired. Accordingly, we conducted a quantitative impairment test of our goodwill as of March 31, 2025 for our Research and Consulting reporting units. As a result of the quantitative impairment test, we determined goodwill was impaired for our Research reporting unit and recorded a goodwill impairment charge of $83.9 million during the three-month period ended March 31, 2025, which is not deductible for tax purposes.

Restructuring Costs (Credits)

In January 2025, we implemented a reduction in our workforce of approximately 6% across various geographies and functions to better align our cost structure with the revenue outlook for the year. We recorded $4.2 million of severance and related costs for this action during the fourth quarter of 2024, $1.5 million during the first quarter of 2025, $0.4 million during the second quarter of 2025, and $(0.1) million during the third quarter of 2025.

In February 2026, we implemented a reduction in our workforce of approximately 8% across various geographies and functions to better align our cost structure with the revenue outlook for the year. We recorded $8.8 million of severance and related costs for this action during the fourth quarter of 2025, $1.2 million during the first quarter of 2026, and $2.0 million during the second quarter of 2026. During the third quarter of 2026, we recorded a reversal of severance and related costs of $0.6 million to reflect changes to the cost expectations regarding the reduction in our workforce. In addition, we incurred approximately $1.1 million for contract termination costs during the fourth quarter of 2025, $0.6 million during the first quarter of 2026, and $0.1 million during the third quarter of 2026. We also approved plans to close certain of our smaller offices both inside and outside the United States, resulting in a non-cash charge of $0.4 million for accelerated ROU asset amortization in the first quarter of 2026.

Interest Expense

Interest expense consists of interest on our borrowings. The fluctuation in interest expense was immaterial during the three and nine months ended September 30, 2026 compared to the prior year periods.

Loss on Investments, Net

Loss on investments, net primarily represents our share of equity method investment gains and losses from our technology-related investment funds. The fluctuation for loss on investments, net was immaterial during the three and nine months ended September 30, 2026 compared to the prior year periods. We received our final payout from the funds during the three months ended September 30, 2026 and the funds were fully liquidated as of September 30, 2026.

Credit Loss Expense on Note Receivable

Credit loss expense on note receivable recorded in the quarters ending June 30, 2026, September 30, 2025 and March 31, 2025 consist of an allowance for credit losses on a note receivable from the divestiture of FeedbackNow during the third quarter of 2024 (see Note 2 - Divestiture).

Other Income, Net

Other income, net primarily consists of interest income, gains and losses on foreign currency, and gains and losses on foreign currency forward contracts. The fluctuation for other income, net was immaterial during the three months ended September 30, 2026 compared to the prior year period. Other income, net decreased by $0.6 million during the nine months ended September 30, 2026 compared to the prior year period primarily due to a decrease in interest income.

Income Tax Expense (Benefit)

The effective tax rate of 17.6% for the nine months ended September 30, 2026 differs from the statutory tax rate of 21% primarily due to the impact of nondeductible expenses on the forecasted effective tax rate offset by the impact of the non-deductible goodwill impairment, which is recorded as a discrete item during the period. The recognition of the $2.3 million tax benefit for the nine months ended September 30, 2026 resulted in an approximate $12.2 million tax asset (in prepaid and other current assets) and an approximate $8.6 million deferred tax liability (in other non-current liabilities) being recorded in the Consolidated Balance Sheets. We are forecasting tax expense to be recorded in the remaining three months of the year, resulting in an effective tax rate in the range of negative 10% to negative 20% for the full year, which is expected to significantly reduce these balances by December 31, 2026.

Segment Results

We operate in three segments: Research, Consulting, and Events. These segments, which are also our reportable segments, are based on our management structure and how management uses financial information to evaluate performance and determine how to allocate resources. Our products and services are delivered through each segment as described below.

The Research segment includes the revenues from all of our research products as well as consulting revenues from advisory services (such as speeches and advisory days) delivered by our research organization. Research segment costs include the cost of the organizations responsible for developing and delivering these products in addition to the costs of the product management organization that is responsible for product pricing and packaging, and the launch of new products.

The Consulting segment includes the revenues and the related costs of our project consulting organization. The project consulting organization delivers a majority of our project consulting revenue.

The Events segment includes the revenues and the costs of the organization responsible for developing and hosting our events.

We evaluate reportable segment performance and allocate resources based on segment operating income (loss). Segment expenses include the direct expenses of each segment organization and exclude selling and marketing expenses, general and administrative expenses, stock-based compensation expense, depreciation expense, adjustments to incentive bonus compensation from target amounts, amortization of intangible assets, goodwill impairment, restructuring costs (credits), interest expense, credit loss expense on note receivable, other income, and losses on investments. The accounting policies used by the segments are the same as those used in the consolidated financial statements.

Research segment revenues decreased 6% and 5% during the three and nine months ended September 30, 2026, respectively, compared to the prior year periods. For the three and nine months ended September 30, 2026, research product revenues within this segment decreased 3% and 5%, respectively, primarily due to the decrease in CV. For the three and nine months ended September 30, 2026, consulting product revenues within this segment decreased 34% and 13%, respectively, primarily due to decreased delivery of consulting and advisory services by our research analysts.

Research segment expenses decreased 4% and 1% during the three and nine months ended September 30, 2026, respectively, compared to the prior year periods. The decrease in expenses during the three and nine months ended September 30, 2026 was primarily due to a $1.2 million decrease in compensation and benefit costs primarily due to a decrease in headcount.

Consulting segment revenues decreased 30% and 22% during the three and nine months ended September 30, 2026, respectively, compared to the prior year periods. The decrease in revenues during the three and nine months ended September 30, 2026 was due to a decrease in delivery of consulting services due to lower client bookings and due to the discontinuation of selling strategy consulting engagements.

Consulting segment expenses decreased 28% and 16% during the three and nine months ended September 30, 2026, respectively, compared to the prior year periods. The decrease in expenses during the three months ended September 30, 2026 was primarily due to (1) a $2.0 million decrease in compensation and benefit costs primarily due to a decrease in headcount and (2) a $0.5 million decrease in professional services costs. The decrease in expenses during the nine months ended September 30, 2026 was primarily due to (1) a $3.1 million decrease in compensation and benefit costs primarily due to a decrease in headcount, (2) a $0.8 million decrease in professional services costs, and (3) a $0.7 million decrease in billable fees.

Event segment revenues increased 629% and decreased 7% during the three and nine months ended September 30, 2026, respectively, compared to the prior year periods. The increase in revenues during the three months ended September 30, 2026 was due to holding two events in the third quarter of 2026 that were held in the fourth quarter of the prior year. The decrease in revenues during the nine months ended September 30, 2026 was due to a decrease in event ticket revenue, due primarily to a decrease in the pricing of tickets.

Event segment expenses increased 51% and decreased 8% during the three and nine months ended September 30, 2026, respectively, compared to the prior year periods. The increase in expenses for the three months ended September 30, 2026 was due primarily to a $0.8 million increase in event costs due to holding two events in the third quarter of 2026 that were held in the fourth quarter of the prior year. The decrease in expenses for the nine months ended September 30, 2026 was due primarily to a $1.1 million decrease in event costs due primarily to the reformatting of certain of our events to smaller regional venues.

Liquidity and Capital Resources

We have historically financed our operations primarily through funds generated from operations. Research revenues, which constituted approximately 77% of our revenues during the nine months ended September 30, 2026, are generally renewable and are

typically payable in advance. We generated cash from operating activities of $33.4 million and $24.3 million during the nine months ended September 30, 2026 and 2025, respectively. The $9.1 million increase in cash from operations for the nine months ended September 30, 2026 compared to the prior year period was primarily due to $17.1 million received for the tenant improvement allowance related to the new lease for our principal headquarters and a $3.8 million reduction in income taxes paid, partially offset by a reduction in pre-tax income, excluding non-cash items.

During the nine months ended September 30, 2026, we used cash in investing activities of $24.1 million primarily from $24.8 million of purchases of property and equipment, which included approximately $22.3 million of leasehold improvements and furniture and fixtures for the renovation of our headquarters, partially offset by a $0.5 million distribution received from an equity method investment and $0.4 million in net maturities and sales of marketable investments. The renovation of our headquarters is essentially complete and we anticipate making the final payments of approximately $2.5 million during the fourth quarter of 2026. During the nine months ended September 30, 2025, we used cash in investing activities of $15.7 million primarily from $15.4 million in net purchases of marketable investments and $1.9 million of purchases of property and equipment, primarily consisting of computer software, partially offset by a $1.4 million distribution received from an equity method investment.

On April 11, 2025, we entered into a third amendment of our lease, and a new lease, for our principal headquarters located in Cambridge, Massachusetts. The effect of these agreements was to early terminate the original lease with respect to the first, second and third floors of the facility by the end of the second quarter of 2026, while also extending the lease term with respect to the fourth, fifth and six floors of the facility through June 30, 2039. As a result of reducing the number of floors that we occupy, we renovated floors four to six of the facility.

During the nine months ended September 30, 2026, we used $16.8 million of cash in financing activities primarily due to $11.3 million for purchases of our common stock, $5.0 million in discretionary repayments of our revolving credit facility, and $1.2 million in taxes paid related to net share settlements of restricted stock units, partially offset by $1.0 million of net proceeds from the issuance of common stock under our stock-based incentive plans. During the nine months ended September 30, 2025, we used $2.4 million of cash in financing activities primarily due to $2.4 million for purchases of our common stock and $1.2 million in taxes paid related to net share settlements of restricted stock units, partially offset by $1.3 million of net proceeds from the issuance of common stock under our stock-based incentive plans. As of September 30, 2026, our remaining stock repurchase authorization was approximately $66.0 million. We anticipate purchasing additional shares of our common stock in the fourth quarter of 2026.

On March 12, 2026, we executed a third amendment of the credit facility in order to extend its maturity period and to reduce the size of the facility in order to decrease ongoing costs of the facility. The key terms of the amendment include (a) an extension of the maturity date from December 2026 until March 2029, (b) a reduction in the facility from $150.0 million to $50.0 million, (c) a reduction in the amount that we are permitted, subject to approval by the administrative agent, to increase commitments under the facility from $50.0 million to $15.0 million, and (d) the addition of a minimum liquidity covenant.

The credit facility contains certain customary restrictive loan covenants, including among others, financial covenants that apply a maximum leverage ratio, minimum interest coverage ratio, minimum liquidity amount, and maximum annual capital expenditures. The negative covenants limit, subject to various exceptions, our ability to incur additional indebtedness, create liens on assets, merge, consolidate, liquidate or dissolve any part of the company, sell assets, change fiscal year, or enter into certain transactions with affiliates and subsidiaries. We were in full compliance with the covenants as of September 30, 2026 and expect to continue to be in compliance through the next 12 months.

Additional future contractual cash obligations extending over the next 12 months and beyond primarily consist of operating lease payments. We lease office space under non-cancelable operating lease agreements. The remaining duration of non-cancelable office space leases ranges from less than 1 year to 13 years. Remaining lease payments within one year, within two to three years, within four to five years, and after five years from September 30, 2026, are $2.5 million, $15.4 million, $13.2 million, and $37.7 million respectively.

In addition to the contractual cash commitments included above, we have other payables and liabilities that may be legally enforceable but are not considered contractual commitments.

As of September 30, 2026, we had cash, cash equivalents, and marketable investments of $117.6 million. This balance includes $84.3 million held outside of the U.S. If the cash outside of the U.S. is needed for operations in the U.S., we would be required to accrue and pay U.S. state taxes and may be required to pay withholding taxes to foreign jurisdictions to repatriate these funds. However, our intent is to permanently reinvest these funds outside of the U.S. and our current plans do not demonstrate a need to repatriate these funds for our U.S. operations. We believe that our current cash balance and cash flows from operations will satisfy working capital, financing activities, and capital expenditure requirements for the next twelve months and to meet our known long-term cash requirements.

As of September 30, 2026, we did not have any significant unrecognized tax benefits for uncertain tax positions.

Recent Accounting Pronouncements

Refer to Note 1 - Interim Consolidated Financial Statements in the Notes to Consolidated Financial Statements for a full description of recent accounting pronouncements including the expected dates of adoption and effects on results of operations and financial condition. There have been no material changes to the critical accounting policies and estimates previously disclosed in that report.

Critical Accounting Policies and Estimates

For information regarding our critical accounting policies and estimates, please refer to Note 1, "Summary of Significant Accounting Policies" and Item 7, "Critical Accounting Estimates" contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. There have been no material changes to the critical accounting policies and estimates previously disclosed in that report.