Forrester Research Inc. (NASDAQ: FORR) has announced a decline in revenues and earnings per share for the first quarter of 2024. The company attributes this decrease to the challenging macroeconomic environment and the transition to the new Forrester Decisions platform. Sales in the company’s advising, consultancy, and events divisions have all seen a 4% decline, along with a decrease in contract value. Surprisingly, revenues for Q1 2024 dropped from $113.7 million in Q1 2023 to $100.1 million.
Despite these financial challenges, Forrester remains committed to implementing its long-term strategic decisions. These decisions aim to strengthen Forrester’s reputation as a leading research and advisory organization, ultimately driving the company’s growth.
One area that Forrester is prioritizing in its research process is Generative AI, with over 50% of analysts actively involved in this field. The company has also recently launched the Izola AI tools as a research tool for its clients, which has been well-received.
The transition to the Forrester Decisions platform is a significant step in the organization’s strategic shift. Currently, 70% of contracts are on this platform, with the goal of reaching 80% by the end of the fiscal year. Unlike a traditional library service, the Forrester Decisions platform enables the company to provide advisory and research services to clients in a more integrated manner.
Forrester has invested in developing competencies in generative AI to enhance customer services. As part of this investment, the company has introduced AI-powered Izola, a tool that analyzes research, data, and insights from recent studies to provide timely solutions for clients. The interest surrounding Izola indicates that companies are increasingly focused on the technical aspects of their technology.
One of Forrester’s main challenges is the development of a result-oriented sales culture, spearheaded by Nate Swan, the organization’s president of sales. The sales team is actively targeting a larger set of organizations, securing multi-year contracts with new clients, and improving client engagement through continuous coaching and improvement.
Events play a crucial role in Forrester’s mission to deliver valuable research content to prospects and existing clients. The company will be hosting four events worldwide in the second quarter, including the B2B and CX summits. These events not only showcase industry expertise but also demonstrate Forrester’s capabilities to the world.
With a market capitalization of $353.69 million, Forrester remains ahead of its competitors. The company’s P/E ratio of 25.95 suggests higher-than-average pricing in the sector. Despite the current challenges, Forrester is committed to providing value to its shareholders through increased dividends and is optimistic about the coming year.
