# Forrester Research, Inc.: Form 10-Q for the period ended Mar 31, 2025

- Company: [Forrester Research, Inc.](/companies/forr.md) (CIK 1023313)
- Form: 10-Q
- Filed: 2025-05-12
- Accepted by EDGAR: May 12, 2025, 08:48 ET
- Period: 2025-03-31
- Accession: 0000950170-25-068616
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1023313/000095017025068616/forr-20250331.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1023313/000095017025068616/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-01-01 to 2025-03-31 | $89.9m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2025-01-01 to 2025-03-31 | $39.6m | us-gaap:CostOfGoodsAndServicesSold |
| Selling, general and administrative | 3 months, 2025-01-01 to 2025-03-31 | $54.0m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2025-01-01 to 2025-03-31 | −$87.6m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2025-01-01 to 2025-03-31 | −$1.0m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-01-01 to 2025-03-31 | −$87.3m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-01-01 to 2025-03-31 | −$4.62 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-01-01 to 2025-03-31 | −$4.62 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-01-01 to 2025-03-31 | 18,890,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2025-01-01 to 2025-03-31 | $26.7m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2025-01-01 to 2025-03-31 | $648.0k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Share repurchases | 3 months, 2025-01-01 to 2025-03-31 | $0 | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2025-03-31 | $75.6m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-03-31 | $218.5m | us-gaap:AssetsCurrent |
| Total assets | at 2025-03-31 | $439.8m | us-gaap:Assets |
| Current liabilities | at 2025-03-31 | $223.7m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-03-31 | $292.4m | us-gaap:Liabilities |
| Long-term debt | at 2025-03-31 | $35.0m | us-gaap:LongTermDebtNoncurrent |
| Shareholders' equity | at 2025-03-31 | $147.4m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 34,419 characters.

### 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, migration of our clients into our Forrester Decisions products, product development, holding hybrid events, possible acquisitions, future dividends, future share repurchases, future growth rates, operating income and cash from operations, 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, and any future impairment charge we incur. 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, 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, 2024 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 of our research revenues, and research revenues as a percentage of total revenues decreased from approximately 77% for the three months ended March 31, 2024 to approximately 76% for the three months ended March 31, 2025.

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 2025 foreign currency rates. In addition, due to the divestiture of the FeedbackNow product line in the third quarter of 2024, we have recast our historical metrics to exclude FeedbackNow products and clients. In addition, the recast metrics reflect the correction of an insignificant error. We have included the recast metrics below for the three months ended March 31, 2024, and we have also provided recast metrics dating back to the first quarter of 2023, 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:

- *Contract value (CV) —* is defined as the value attributable to all of our recurring research-related contracts. Contract value is calculated as the annualized value of all contracts in effect at a specific point in time, without regard to how much revenue has already been recognized. Contract value primarily consists of subscription-based products for which revenue is recognized on a ratable basis, except for the entitlements embedded in our subscription products, such as event tickets and advisory sessions, for which the revenue is recognized when the item is delivered. Contract value also includes our reprint products, as these products are used throughout the year by our clients and are typically renewed.
- *Client retention —* represents the percentage of client companies (defined as all clients that buy a CV product) at the prior year measurement date that have active contracts at the current year measurement date.
- *Wallet retention —* represents a measure of the CV we have retained with clients over a twelve-month period, including increases or decreases in retained client CV during the period. Wallet retention is calculated on a percentage basis by dividing the annualized contract value of our current clients, who were also clients a year ago, by the total annualized contract value from a year ago.
- *Clients —* is calculated at the enterprise level as all clients that have an active CV contract.

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):

|  | As of March 31, 2025 | 2024 | Absolute Increase (Decrease) | Percentage Increase (Decrease) |
| --- | ---: | ---: | ---: | ---: |
| Contract value | $290.9 | $312.8 | $(21.9) | (7%) |
| Client retention | 73% | 72% | 1 point |  |
| Wallet retention | 86% | 87% | (1) point |  |
| Number of clients | 1,822 | 2,122 | (300) | (14%) |

Contract value at March 31, 2025 decreased by 7% compared to the prior year period due to wallet retention being at 86% for the period (representing retention and enrichment of the prior year CV base) and new client acquisition not fully offsetting the net retention loss. Client retention increased by 1 percentage point and wallet retention decreased by 1 percentage point at March 31, 2025 compared to the prior year period. However, wallet retention decreased by 3 percentage points and client retention was flat, compared to the prior quarter. The decline in wallet retention from the prior quarter was primarily due to lower enrichment of contracts as they renewed during the quarter.

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, goodwill, intangible and other long-lived assets, and income taxes. 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, 2024.

### Results of Operations

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

| Revenues: | Three Months Ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| Research revenues | 76.1% | 76.5% |
| Consulting revenues | 23.9 | 23.1 |
| Events revenues | — | 0.4 |
| Total revenues | 100.0 | 100.0 |
| Operating expenses: |  |  |
| Cost of services and fulfillment | 44.1 | 44.7 |
| Selling and marketing | 39.7 | 39.4 |
| General and administrative | 14.5 | 14.0 |
| Depreciation | 1.6 | 2.1 |
| Amortization of intangible assets | 2.5 | 2.5 |
| Goodwill impairment | 93.3 | — |
| Restructuring costs | 1.8 | 6.6 |
| Loss from operations | (97.5) | (9.3) |
| Interest expense | (0.7) | (0.8) |
| Loss on investments, net | (1.1) | — |
| Other income, net | 1.1 | 1.3 |
| Loss before income taxes | (98.2) | (8.8) |
| Income tax benefit | (1.1) | (2.1) |
| Net loss | (97.1%) | (6.7%) |

### Three Months Ended March 31, 2025 and 2024

### Revenues

*(dollars in millions)*

|  | Three Months Ended March 31, 2025 | 2024 | Absolute Increase (Decrease) | Percentage Increase (Decrease) |
| --- | ---: | ---: | ---: | ---: |
| Total revenues | $89.9 | $100.1 | $(10.2) | (10%) |
| Research revenues | $68.4 | $76.6 | $(8.2) | (11%) |
| Consulting revenues | $21.4 | $23.1 | $(1.7) | (7%) |
| Events revenues | $— | $0.4 | $(0.3) | (93%) |
| Revenues attributable to customers outside of the U.S. | $19.8 | $23.5 | $(3.7) | (16%) |
| Percentage of revenue attributable to customers outside of the U.S. | 22% | 23% | (1) point |  |

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 11% during the three months ended March 31, 2025 compared to the prior year period, primarily due to the decrease in CV, as discussed above, and the divestiture of the FeedbackNow product line in the third quarter of 2024. From a product perspective, the decrease in revenues was due to a decline in revenue from our reprint product, the effect of the divestiture of the FeedbackNow product line, and a decline in revenue from our subscription research products. Research subscription products declined 6% during the three months ended March 31, 2025, as revenue growth from our Forrester Decisions products was offset by revenue declines from our heritage research products.

Consulting revenues decreased 7% during the three months ended March 31, 2025 compared to the prior year period. The decrease in revenues was due to a decrease in delivery of consulting services due to lower client bookings.

Events revenues were insignificant during the three months ended March 31, 2025 and 2024 as no events were held during either period.

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

### Cost of Services and Fulfillment

|  | Three Months Ended March 31, 2025 | 2024 | Absolute Increase (Decrease) | Percentage Increase (Decrease) |
| --- | ---: | ---: | ---: | ---: |
| Cost of services and fulfillment (dollars in millions) | $39.6 | $44.7 | $(5.1) | (11%) |
| Cost of services and fulfillment as a percentage of total revenues | 44% | 45% | (1) point |  |
| Service and fulfillment employees (at end of period) | 672 | 747 | (75) | (10%) |

Cost of services and fulfillment expenses decreased 11% during the three months ended March 31, 2025 compared to the prior year period. The decrease was primarily due to (1) a $3.2 million decrease in compensation and benefit costs due to a decrease in headcount, partially offset by an increase incentive bonus costs and (2) a $1.4 million decrease in professional services costs primarily due to a decrease in contractor costs and billable fees.

### Selling and Marketing

|  | Three Months Ended March 31, 2025 | 2024 | Absolute Increase (Decrease) | Percentage Increase (Decrease) |
| --- | ---: | ---: | ---: | ---: |
| Selling and marketing expenses (dollars in millions) | $35.7 | $39.4 | $(3.7) | (9%) |
| Selling and marketing expenses as a percentage of total revenues | 40% | 39% | 1 point |  |
| Selling and marketing employees (at end of period) | 608 | 679 | (71) | (10%) |

Selling and marketing expenses decreased 9% during the three months ended March 31, 2025 compared to the prior year period. The decrease was primarily due to (1) a $2.6 million decrease in compensation and benefit costs due to a decrease in headcount and commissions expense and (2) a $0.6 million decrease in stock compensation expense.

### General and Administrative

|  | Three Months Ended March 31, 2025 | 2024 | Absolute Increase (Decrease) | Percentage Increase (Decrease) |
| --- | ---: | ---: | ---: | ---: |
| General and administrative expenses (dollars in millions) | $13.1 | $14.1 | $(1.0) | (7%) |
| General and administrative expenses as a percentage of total revenues | 15% | 14% | 1 point |  |
| General and administrative employees (at end of period) | 230 | 264 | (34) | (13%) |

General and administrative expenses decreased 7% during the three months ended March 31, 2025 compared to the prior year period. The decrease was primarily due to a $1.1 million decrease in compensation and benefit costs due to a decrease in headcount, partially offset by an increase in incentive bonus costs.

### Depreciation

Depreciation expense decreased by $0.6 million during the three months ended March 31, 2025 compared to the prior year period due to certain software assets becoming fully depreciated.

### Amortization of Intangible Assets

The fluctuation for amortization expense was immaterial during the three months ended March 31, 2025 compared to the prior year period.

### Goodwill Impairment

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 continued impact from the conditions in the macroeconomic environment, uncertainty created by the recently announced 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 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 two reporting units (Research and Consulting) that have goodwill. We estimated the implied fair value of our reporting units using an equal weighting of an income approach and market approach. 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 period ended March 31, 2025, which is not deductible for tax purposes.

The income approach was based upon projected future cash flows that were discounted to present value. The key underlying assumptions included forecasted revenues, gross profit and operating expenses, terminal growth rate, as well as an applicable discount rate for each reporting unit. The key assumptions in the market approach were the earnings multiple and market participant acquisition premium. Fair value estimates are based on a complex series of judgments about future events and rely heavily on estimates and assumptions that we deemed to be reasonable. Changes in the estimates or assumptions used in the quantitative impairment test could materially affect the determination of fair value of our reporting units and the associated goodwill impairment assessment. Potential events and circumstances that could have an adverse impact on our estimates and assumptions include, but are not limited to, lower than expected bookings growth, increases in costs, and other macroeconomic factors.

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.

### Restructuring and Related Costs

In February 2024, we implemented a reduction in our workforce of approximately 3% across various geographies and functions to better align our cost structure with the revenue outlook for the year. We recorded $0.7 million of severance and related costs for this action during the fourth quarter of 2023, and $2.8 million during the first quarter of 2024. We recorded a restructuring charge of $3.8 million during the first quarter of 2024 related to closing one floor of our offices in San Francisco, California, of which $3.2 million related to an impairment of a right-of-use asset and $0.6 million related to an impairment of leasehold improvements.

During the third quarter of 2024, we recorded an additional restructuring charge of $0.7 million related to the prior closure of both floors of our offices located in San Francisco, California, of which $0.4 million related to an impairment of the right-of-use assets and $0.3 million related to an impairment of leasehold improvements. Also, during the third quarter of 2024, we recognized $0.2 million of expense from the write-off of foreign currency translation adjustments related to the liquidation of a small foreign operation.

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, and $1.5 million during the first quarter of 2025.

### Interest Expense

Interest expense consists of interest on our borrowings. The fluctuation in interest expense was immaterial during the three months ended March 31, 2025 compared to the prior year period.

### Loss on Investments, Net

Loss on investments, net consists of an allowance for credit losses on a note receivable from the divestiture of FeedbackNow and our share of equity method investment losses from our technology-related investment funds. Loss on investments, net increased by $1.0 million during the three months ended March 31, 2025 compared to the prior year period due primarily to an increase in the allowance for credit losses on the note receivable.

### 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. Other income, net decreased by $0.3 million during the three months ended March 31, 2025 compared to the prior year period primarily due to a decrease in interest income.

### Income Tax Benefit

|  | Three Months Ended March 31, 2025 | 2024 | Absolute Increase (Decrease) | Percentage Increase (Decrease) |
| --- | ---: | ---: | ---: | ---: |
| Benefit from income taxes (dollars in millions) | $(1.0) | $(2.1) | $(1.1) | (51%) |
| Effective tax rate | 1% | 24% | (23) points |  |

The decrease in the effective tax rate during the three months ended March 31, 2025 compared to the prior year period is primarily due to the goodwill impairment charge, which is not deductible for tax purposes. For the full year 2025, we anticipate that our effective tax rate will be in the range of negative 3% to 7%.

### 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. During the third quarter of 2024, we realigned our technology teams and as such certain technology costs are no longer reported as a direct expense of the Research segment, and are now reported within selling, marketing, administrative and other expenses. As of January 1, 2025, we realigned our citations team costs such that these costs are now reported as a direct expense of the Research segment, whereas they were previously reported in selling, marketing, administrative and other expenses. Prior period amounts have been recast to conform to the current presentation.

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. As of January 1, 2025, we realigned our content marketing partner costs such that these costs are now reported as a direct expense of the Consulting segment, whereas they were previously reported in selling, marketing, administrative and other expenses. Prior period amounts have been recast to conform to the current presentation.

The Events segment includes the revenues and the costs of the organization responsible for developing and hosting our events. As of January 1, 2025, we realigned our events sponsorship sales team and as such the costs of this team are no longer reported as a direct expense of the Events segment, and are now reported within selling, marketing, administrative, and other expenses. Prior period amounts have been recast to conform to the current presentation.

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, interest expense, other income, and losses on investments. The accounting policies used by the segments are the same as those used in the consolidated financial statements.

*(dollars in thousands)*

| Three Months Ended March 31, 2025 | Research Segment | Consulting Segment | Events Segment | Consolidated |
| --- | ---: | ---: | ---: | ---: |
| Research revenues | $68,414 | $— | $— | $68,414 |
| Consulting revenues | 5,058 | 16,378 | — | 21,436 |
| Events revenues | — | — | 26 | 26 |
| Total segment revenues | 73,472 | 16,378 | 26 | 89,876 |
| Segment expenses | (26,136) | (8,899) | (764) | (35,799) |
| Segment operating income (loss) | 47,336 | 7,479 | (738) | 54,077 |
| Year over year revenue change | (10%) | (11%) | (93%) | (10%) |
| Year over year expense change | (18%) | (18%) | (2%) | (18%) |

*(dollars in thousands)*

| Three Months Ended March 31, 2024 | Research Segment | Consulting Segment | Events Segment | Consolidated |
| --- | ---: | ---: | ---: | ---: |
| Research revenues | $76,581 | $— | $— | $76,581 |
| Consulting revenues | 4,643 | 18,498 | — | 23,141 |
| Events revenues | — | — | 355 | 355 |
| Total segment revenues | 81,224 | 18,498 | 355 | 100,077 |
| Segment expenses | (31,944) | (10,886) | (778) | (43,608) |
| Segment operating income (loss) | 49,280 | 7,612 | (423) | 56,469 |

Research segment revenues decreased 10% during the three months ended March 31, 2025 compared to the prior year period. Research product revenues within this segment decreased 11% primarily due to the decrease in CV, as discussed above, as well as due to the divestiture of the FeedbackNow product line in the third quarter of 2024. Consulting product revenues within this segment increased 9% primarily due to increased delivery of consulting and advisory services by our research analysts.

Research segment expenses decreased 18% during the three months ended March 31, 2025 compared to the prior year period. The decrease in expenses was primarily due to (1) a $4.7 million decrease in compensation and benefit costs primarily due to a decrease in headcount and (2) a $1.0 million decrease in professional services due to a decrease in contractor costs.

Consulting segment revenues decreased 11% during the three months ended March 31, 2025 compared to the prior year period. The decrease in revenues was primarily due to a decrease in delivery of consulting services due to lower client bookings.

Consulting segment expenses decreased 18% during the three months ended March 31, 2025 compared to the prior year period. The decrease in expenses was primarily due to (1) a $1.5 million decrease in compensation and benefit costs primarily due to a decrease in headcount and (2) a $0.6 million decrease in billable fees.

Event segment revenues and expenses were insignificant during the three months ended March 31, 2025 and 2024 as no events were held during either period.

### Liquidity and Capital Resources

We have historically financed our operations primarily through funds generated from operations. Research revenues, which constituted approximately 76% of our revenues during the three months ended March 31, 2025, are generally renewable and are typically payable in advance. We generated cash from operating activities of $26.7 million and $0.6 million during the three months ended March 31, 2025 and 2024, respectively. The $26.1 million increase in cash from operations for the three months ended March 31, 2025 compared to the prior year period was primarily due to a $20.9 million decrease in cash used for accrued expenses resulting primarily from a decrease in the payment of year end incentive compensation during 2025 as compared to the prior year period, and the payment of a legal settlement during the prior year period.

During the three months ended March 31, 2025, we used cash in investing activities of $8.5 million primarily from $9.1 million in net purchases of marketable investments and $0.6 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. During the three months ended March 31, 2024, we used cash in investing activities of $7.2 million primarily from $5.8 million in net purchases of marketable investments and $1.4 million of purchases of property and equipment, primarily consisting of computer software.

During the three months ended March 31, 2025, we generated cash from financing activities of $0.2 million primarily due to $0.7 million of net proceeds from the issuance of common stock under our stock-based incentive plans, partially offset by $0.4 million in taxes paid related to net share settlements of restricted stock units. We used $4.3 million of cash in financing activities during the three months ended March 31, 2024 primarily due to $4.1 million for purchases of our common stock and $1.4 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 March 31, 2025, our remaining stock repurchase authorization was approximately $80.0 million.

We have a credit facility that provides up to $150.0 million of revolving credit commitments. The amount outstanding under the credit facility was $35.0 million at March 31, 2025 and the facility expires in December of 2026. The credit facility permits us to increase the revolving credit commitments in an aggregate principal amount up to $50.0 million, subject to approval by the administrative agent and certain customary terms and conditions.

The credit facility contains certain customary restrictive loan covenants, including among others, financial covenants that apply a maximum leverage ratio, minimum interest coverage ratio, 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 March 31, 2025 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 (refer to Note 6 – *Leases* in the Notes to Consolidated Financial Statements for additional information). The remaining duration of non-cancelable office space leases ranges from less than 1 year to 6 years. Remaining lease payments within one year, within two to three years, within four to five years, and after five years from March 31, 2025, are $10.4 million, $18.0 million, $5.8 million, and $3.2 million respectively. On April 11, 2025, we entered into a lease amendment and new lease for our headquarters building in Cambridge, Massachusetts. The new lease contains total non-cancelable lease payments of $51.1 million from March 1, 2027 through the lease expiration date of June 30, 2039 (refer to Note 18 - *Subsequent Events* in the Notes to Consolidated Financial Statements for additional information).

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 March 31, 2025, we had cash, cash equivalents, and marketable investments of $134.3 million. This balance includes $83.9 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.

### 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.

### 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, 2024. There have been no material changes to the critical accounting policies and estimates previously disclosed in that report.

## Market risk

As filed, 266 characters.

There have been no material changes in our assessment of our sensitivity to market risk since our presentation set forth in Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” in our Annual Report on Form 10-K for the year ended December 31, 2024.

## Controls and procedures

As filed, 1,806 characters.

### Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as such term is defined under Securities Exchange Act Rule 13a-15(e), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures. In designing and evaluating the disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2025. Based upon their evaluation and subject to the foregoing, the principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective to provide reasonable assurance as of that date.

### Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) of the Exchange Act) that occurred during the quarter ended March 31, 2025, which has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 2,749 characters.

In addition to the other information set forth in this Form 10-Q, you should carefully consider the factors discussed in Part I, “Item 1A: Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, which could materially affect our business, financial condition or future results. The risk factors below supplement and update the risk factors and information discussed in our Annual Report on Form 10-K for the year ended December 31, 2024. The risk factors described in our Annual Report on Form 10-K remain applicable to our business. The risks described in this Form 10-Q and in our Annual Report on Form 10-K are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

### Risks Relating to our Business

***We have recently recorded a substantial impairment charge. Any future impairments of our assets could negatively impact our results of operations.***

We test goodwill for impairment annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. An impairment test is also required for other long-lived assets if events or changes in circumstances indicate that the carrying value may not be recoverable. Examples of events or changes in circumstances indicating that the carrying value of such long-lived assets may not be recoverable could be a significant decline in our stock price for a sustained period; significant negative industry or economic trends; our overall financial performance, such as negative or declining cash flows or a decline in actual or planned revenue or earnings compared with actual and projected results of relevant prior periods; other relevant entity-specific events including changes in management, key personnel, strategy, or customers; and other events affecting our reporting units. During the three months ended March 31, 2025, we recorded an impairment of goodwill in the amount of $83.9 million related to our Research segment as a result of a triggering event arising from a sustained decline in our share price and our overall market capitalization from mid-February 2025 through March 31, 2025, along with other qualitative considerations, including the continued impact from the conditions in the macroeconomic environment, uncertainty created by the recently announced changes in the United States’ trade policies, and the larger than expected decline in contract bookings during the first quarter of 2025. Any future impairment of goodwill or other long-lived assets could have a negative impact on our profitability and financial results.

Filed May 12, 2025.
Source: SEC EDGAR, the filing index for accession 0000950170-25-068616. Last ingested by Listed: Oct 29, 2026, 16:06 ET. No prices; not investment advice.