Forrester Research (NASDAQ:FORR) executives said the company is leaning further into artificial intelligence as both a product opportunity and a differentiator for its research franchise, even as it works through contract value and revenue declines and restructures parts of its consulting and events businesses.
On the company’s fourth-quarter and full-year 2025 earnings call, CEO George Colony said clients are operating under “a new paradigm shaped by AI,” with growing complexity across buying decisions, customer experience journeys, and technology adoption. Colony emphasized that Forrester’s role is to guide large enterprises through AI-related opportunities and risks, and he argued the company’s research model benefits from disruption. CFO Chris Finn said there were “meaningful areas of improvement” exiting 2025, including early traction from a new AI product, higher multi-year contract mix, improved retention metrics, and approximately $18 million of free cash flow for the year.
AI strategy and product momentum
The company also announced a naming shift: as it expands beyond question-and-answer use cases and works toward embedding the tool in client systems and third-party workflows, Forrester plans to change the name of its flagship AI tool from Izola to “Forrester AI.” Carrie Johnson, chief product officer, said the company is focused on giving clients “more ways to buy from us” and more ways for Forrester to be “embedded in where they work.” Colony added that an “AI Surge” of improvements is scheduled for the first half of 2026.
Management repeatedly positioned Forrester’s AI offerings as differentiated from public large language models. Colony said the company brings three capabilities public models cannot deliver: proprietary data, original ideas and analysis, and access to human experts who created the work. He also highlighted “trust” as a core attribute, suggesting that executives turn to Forrester for trusted sources backed by experts.
During Q&A, Colony said he does not see churn driven by AI replacements, although the topic comes up in sales conversations. He said the company trained the sales organization to demonstrate the value of AI Access relative to large language models and cited marketplace “mistrust” of some public-model content as a potential opportunity for Forrester.
Fourth-quarter and full-year 2025 results
For the fourth quarter, Finn reported revenue of $101.1 million, down 6% from $108 million in the prior-year period. For the full year, revenue was $396.9 million, down 8% from $432.5 million in 2024. Colony said fourth-quarter CV (contract value) declined 6% and revenue declined 7% year-over-year, noting the declines improved compared with the prior quarter.
Segment results discussed on the call included:
- Research: Q4 revenue of $76.6 million and full-year revenue of $295.6 million, down 4% and 7%, respectively. Finn said subscription research products were down about 4% for the year, as growth in Forrester Decisions was offset by declines in remaining cohorts of legacy research products.
- Consulting: Q4 revenue of $21.8 million and full-year revenue of $88.2 million, down 16% and 9%, respectively. Finn said advisory and content marketing were consistent, but results were significantly impacted by strategy consulting declines.
- Events: Q4 revenue of $2.7 million, down 1%, with year-over-year comparison affected by the shift of an additional event into Q4 2025. Full-year events revenue fell 29% to $13.1 million, driven materially by lower sponsorship and ticket sales.
On profitability, Finn said adjusted operating income fell to $4.2 million in Q4, or 4.1% of revenue, versus $8.9 million, or 8.3%, in Q4 2024. Full-year operating income was $30.3 million, or 7.6% of revenue, down from $38.5 million, or 8.9%, in 2024. Net income in Q4 was $3.2 million ($0.17 per share), down from $6.8 million ($0.36 per share) a year earlier. Full-year net income was $22.2 million ($1.16 per share), down 21% year-over-year.
Finn reported 2025 cash flow from operations of $21.1 million and capital expenditures of $3 million, and he said free cash flow for the year was approximately $18 million. He attributed the positive cash flow to strong collections and improved vendor payment terms. The company ended the quarter with approximately $127.7 million of cash and $35 million of debt, and Finn said more than $77 million remained under its share repurchase authorization. The company did not pay down debt or repurchase shares in the quarter.
Retention, client count, and multi-year mix
Colony said retention reached 87%, up one point from the start of 2025, and client retention improved three points in Q4 and four points from the start of the year. He attributed improving client retention in part to the “positive impact” of AI Access. Colony also said client count increased in Q4, the first quarterly increase since Q4 2021, and he pointed to a broader product portfolio as a factor.
Finn said research segment CV was $292.4 million as of December 31, 2025, down 6% year-over-year, a modest improvement from the prior quarter’s 7% decline. He said the decline was largely driven by low wallet retention, primarily due to lower enrichment. Finn said wallet retention improved throughout the year and stood at 87%.
Management also highlighted a higher multi-year contract mix: Colony said multi-year deals represented 72% of CV at year-end, up from 69% in Q4 2024.
Restructuring and changes to consulting and events
On February 9, the company announced a restructuring affecting 8% of employees. Colony said the move is intended to align costs with revenue and focus the company on expanding research contract value. Finn said the workforce was reduced by about 8% and that the company expects $13.5 million to $14 million of costs tied to these actions, including $9.9 million recognized in Q4. He said the company plans to use a portion of cost savings to fund focused AI investments.
A key change is the exit from strategy consulting. Colony said the strategy consulting business has been negatively affected by instability in U.S. federal government contracts and an increasingly competitive market, and Forrester will exit that line. Finn said strategy consulting bookings declined more than 50% in 2025, the company does not expect the environment to improve near term, and it will not sell new strategy consulting engagements going forward. The company plans to execute an existing backlog through 2026.
In Q&A, Finn said the revenue impact from sunsetting strategy consulting is expected to be about $6 million, with a “pretty decent sized backlog” of approximately $8 million to be serviced through 2026, tailing off around the end of Q3 or beginning of Q4.
For events, Colony said Forrester is moving away from longer multi-day events that require substantial travel, citing tighter travel budgets and time constraints for leaders. The company plans to shift toward shorter, more intimate forums held closer to clients, including regional events in North America, EMEA, and APAC, with a greater focus on in-person connection and peer networking. In response to a question about improving the events business, management also referenced rebuilding the sponsorship sales organization and said workshops introduced in 2025 were “massively successful,” with more planned for 2026.
2026 focus and outlook
Colony said Forrester’s plan is to return to CV growth in 2026, driven by four initiatives: consistent execution of its retention life cycle, introduction of more product options (including embedded Forrester AI), improved go-to-market execution under new Chief Sales Officer Christophe Favre, and more actionable “all-seasons” research with additional proprietary data.
Favre described changes to North American go-to-market execution, including organizing around six industries, focusing on high-potential accounts, building a business development mindset across account executives and account managers, and tightening execution around the retention life cycle. He also said he is implementing a new approach to measuring sales activity that balances quantitative pipeline metrics with qualitative measures such as conversion, sales velocity, and quality.
Finn provided 2026 guidance of $345 million to $360 million of revenue, down 9% to 13% versus 2025. He said the outlook reflects last year’s bookings decline, which affects first-half performance, with better results anticipated in the second half. He also cited the negative revenue impact of sunsetting strategy consulting and risks related to reworking events. The company’s guidance assumes research revenue declines in the mid-single digits, consulting down in the low twenties, and events down in the high teens.
Finn said the revenue mix is expected to shift, with research approaching 80% of total revenue in 2026, up from almost 75% in 2025. He guided to operating margins of 6% to 6.5% for 2026, interest expense of $2.3 million, a 29% tax rate, and earnings per share of $0.72 to $0.82.
Management said it expects CV to show modest growth as the company exits 2026, supported by AI Access momentum, additional product launches, and continued retention initiatives.
About Forrester Research (NASDAQ:FORR)
Forrester Research, Inc is a leading global research and advisory firm that provides insights and guidance to business and technology leaders. Founded in 1983 and headquartered in Cambridge, Massachusetts, the company offers a wide range of services designed to help clients understand market dynamics, evaluate technology investments and develop customer-centric strategies. Forrester’s core offerings include syndicated research reports, bespoke advisory services, consulting engagements and data-driven analytics.
Through its extensive research practice, Forrester produces in-depth analyses of emerging technologies, industry trends and best practices across sectors such as information technology, marketing, customer experience and digital business.
