Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. ~~(Check one):~~

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~November 3, 2017 17,975,000~~May 6, 2020, 18,760,000 shares of the registrant’s common stock were outstanding.

		September 30,			December 31,			March 31,			December 31,
		2017			2016			2020			2019
ASSETS	ASSETS
Current Assets:
Cash and cash equivalents		$	79,960		$	76,958		$	69,815		$	67,904
Marketable investments (Note 3)			54,019			61,147
Accounts receivable, net			39,481			58,812
Accounts receivable, net of allowance for expected credit losses of $1,144 and $628 as of March 31, 2020 and December 31, 2019, respectively									59,505			84,605
Deferred commissions			9,146			12,052			18,603			20,326
Prepaid expenses and other current assets			15,817			14,467			24,980			19,201
Total current assets			198,423			223,436			172,903			192,036
Property and equipment, net			26,128			23,894			28,748			29,937
Operating lease right-of-use assets									64,220			69,100
Goodwill			75,815			73,193			242,690			243,895
Intangible assets, net			927			1,464			92,655			97,363
Other assets			13,095			13,798			7,082			6,829
Total assets		$	314,388		$	335,785		$	608,298		$	639,160

LIABILITIES AND STOCKHOLDERS' EQUITY	LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable		$	613		$	1,806		$	352		$	505
Accrued expenses and other current liabilities			36,838			41,403			51,450			79,857
Current portion of long-term debt									10,156			9,375
Deferred revenue			132,929			134,265			195,399			179,194
Total current liabilities			170,380			177,474			257,357			268,931
Non-current liabilities			8,788			8,275
Long-term debt, net of deferred financing fees									104,202			121,170
Non-current operating lease liabilities									63,840			67,062
Other non-current liabilities									24,727			23,909
Total liabilities			179,168			185,749			450,126			481,072

Stockholders' Equity (Note 7):
Stockholders' Equity (Note 12):
Preferred stock, $0.01 par value
Authorized - 500 shares; issued and outstanding - none			—			—			—			—
Common stock, $0.01 par value
Authorized - 125,000 shares
Issued - 22,293 and 21,719 shares as of September 30, 2017 and December 31, 2016, respectively
Outstanding - 17,902 and 18,361 shares as of September 30, 2017 and December 31, 2016, respectively			223			217
Issued - 23,389 and 23,275 shares as of March 31, 2020 and December 31, 2019, respectively
Outstanding - 18,758 and 18,644 shares as of March 31, 2020 and December 31, 2019, respectively									234			233
Additional paid-in capital			175,218			157,569			220,308			216,454
Retained earnings			124,343			121,799			117,477			118,147
Treasury stock - 4,391 and 3,358 shares as of September 30, 2017 and December 31, 2016, respectively, at cost			(161,943	)		(121,976	)
Treasury stock - 4,631 shares as of March 31, 2020 and December 31, 2019, at cost									(171,889	)		(171,889	)
Accumulated other comprehensive loss			(2,621	)		(7,573	)		(7,958	)		(4,857	)
Total stockholders’ equity			135,220			150,036			158,172			158,088
Total liabilities and stockholders’ equity		$	314,388		$	335,785		$	608,298		$	639,160

The accompanying notes are an integral part of these consolidated financial statements.

	Three Months Ended						Nine Months Ended						Three Months Ended
	September 30,						September 30,						March 31,
	2017			2016			2017			2016			2020			2019
Revenues:
Research services	$	54,235		$	52,727		$	160,553		$	160,998		$	72,796		$	68,609
Advisory services and events		26,134			24,700			86,743			81,651			33,549			32,040
Total revenues		80,369			77,427			247,296			242,649			106,345			100,649
Operating expenses:
Cost of services and fulfillment		32,508			29,889			100,814			95,429			43,353			45,110
Selling and marketing		29,225			27,751			90,355			87,490			40,273			42,033
General and administrative		10,083			10,086			30,672			30,359			12,005			13,190
Depreciation		1,607			1,941			4,775			5,982			2,406			2,023
Amortization of intangible assets		197			208			582			627			4,712			6,210
Reorganization costs		—			—			—			1,026
Acquisition and integration costs														2,875			2,967
Total operating expenses		73,620			69,875			227,198			220,913			105,624			111,533
Income from operations		6,749			7,552			20,098			21,736
Other income, net		146			229			248			374
Losses on investments, net		(772	)		(1,085	)		(997	)		(1,139	)
Income before income taxes		6,123			6,696			19,349			20,971
Income tax provision		2,170			3,584			6,302			9,110
Net income	$	3,953		$	3,112		$	13,047		$	11,861

Basic income per common share	$	0.22		$	0.17		$	0.73		$	0.66

Diluted income per common share	$	0.22		$	0.17		$	0.72		$	0.65

Income (loss) from operations														721			(10,884	)
Interest expense														(1,538	)		(2,352	)
Other income (expense), net														310			(270	)
Gain (loss) on investments, net														13			(36	)
Loss before income taxes														(494	)		(13,542	)
Income tax expense (benefit)														19			(226	)
Net loss													$	(513	)	$	(13,316	)
Basic loss per common share													$	(0.03	)	$	(0.73	)
Diluted loss per common share													$	(0.03	)	$	(0.73	)
Basic weighted average common shares outstanding		17,747			18,062			17,897			17,896			18,705			18,363

Diluted weighted average common shares outstanding		18,051			18,435			18,212			18,168			18,705			18,363

Cash dividends declared per common share	$	0.19		$	0.18		$	0.57		$	0.54

The accompanying notes are an integral part of these consolidated financial statements.

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016

Net income
$
3,953

$
3,112

$
13,047

$
11,861

Other comprehensive income (loss), net of taxes:

Foreign currency translation

1,601

(120
)

4,905

(68
)
Net change in market value of investments

23

(48
)

47

72

Other comprehensive income (loss)

1,624

(168
)

4,952

4

Comprehensive income
$
5,577

$
2,944

$
17,999

$
11,865

	Three Months Ended
	March 31,
	2020			2019
Net loss	$	(513	)	$	(13,316	)

Other comprehensive loss, net of taxes:
Foreign currency translation		(1,920	)		(430	)
Net change in market value of interest rate swap		(1,181	)		—
Other comprehensive loss		(3,101	)		(430	)
Comprehensive loss	$	(3,614	)	$	(13,746	)

The accompanying notes are an integral part of these consolidated financial statements.

Nine Months Ended

September 30,

2017

2016

Cash flows from operating activities:

Net income
$
13,047

$
11,861

Adjustments to reconcile net income to net cash provided by operating
activities:

Depreciation

4,775

5,982

Amortization of intangible assets

582

627

Net losses from investments

997

1,139

Deferred income taxes

(921
)

(413
)
Stock-based compensation

6,423

5,731

Amortization of premium on investments

171

267

Foreign currency losses

444

98

Changes in assets and liabilities

Accounts receivable

20,140

31,078

Deferred commissions

2,906

3,890

Prepaid expenses and other current assets

(979
)

2,322

Accounts payable

(1,208
)

133

Accrued expenses and other liabilities

(6,041
)

(10,101
)
Deferred revenue

(3,473
)

(14,309
)
Net cash provided by operating activities

36,863

38,305

Cash flows from investing activities:

Purchases of property and equipment

(5,806
)

(3,334
)
Purchases of marketable investments

(27,430
)

(35,555
)
Proceeds from sales and maturities of marketable investments

34,458

20,086

Other investing activity

200

(49
)
Net cash provided by (used in) investing activities

1,422

(18,852
)
Cash flows from financing activities:

Dividends paid on common stock

(10,205
)

(9,696
)
Repurchases of common stock

(39,967
)

—

Proceeds from issuance of common stock under employee equity
incentive plans

13,866

9,987

Taxes paid related to net share settlements of stock-based compensation awards

(2,511
)

(2,069
)
Net cash used in financing activities

(38,817
)

(1,778
)
Effect of exchange rate changes on cash and cash equivalents

3,534

(870
)
Net increase in cash and cash equivalents

3,002

16,805

Cash and cash equivalents, beginning of period

76,958

53,331

Cash and cash equivalents, end of period
$
79,960

$
70,136

	Three Months Ended
	March 31,
	2020			2019
Cash flows from operating activities:
Net loss	$	(513	)	$	(13,316	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation		2,406			2,023
Impairment of property and equipment		626			—
Amortization of intangible assets		4,712			6,210
Net (gains) losses from investments		(13	)		36
Deferred income taxes		(251	)		(10,529	)
Stock-based compensation		2,802			2,685
Operating lease right-of-use asset amortization and impairments		4,535			3,225
Amortization of deferred financing fees		244			230
Foreign currency (gains) losses		(229	)		330
Changes in assets and liabilities, net of acquisitions:
Accounts receivable		24,556			19,239
Deferred commissions		1,723			(1,577	)
Prepaid expenses and other current assets		(6,943	)		(1,945	)
Accounts payable		(143	)		902
Accrued expenses and other liabilities		(27,264	)		(7,244	)
Deferred revenue		18,574			29,108
Operating lease liabilities		(2,999	)		(3,389	)
Net cash provided by operating activities		21,823			25,988
Cash flows from investing activities:
Acquisitions, net of cash acquired		—			(238,943	)
Purchases of property and equipment		(2,401	)		(2,772	)
Net cash used in investing activities		(2,401	)		(241,715	)
Cash flows from financing activities:
Proceeds from borrowings, net of costs		—			171,275
Payments on borrowings		(16,344	)		(21,563	)
Payment of debt issuance costs		—			(857	)
Deferred acquisition payments		—			(766	)
Proceeds from issuance of common stock under employee equity incentive plans		1,955			3,361
Taxes paid related to net share settlements of stock-based compensation awards		(902	)		(89	)
Net cash provided by (used in) financing activities		(15,291	)		151,361
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(2,683	)		438
Net change in cash, cash equivalents and restricted cash		1,448			(63,928	)
Cash, cash equivalents and restricted cash, beginning of period		69,192			140,296
Cash, cash equivalents and restricted cash, end of period	$	70,640		$	76,368
Supplemental disclosure of cash flow information:
Cash paid for interest	$	1,286		$	1,948
Cash paid for income taxes	$	1,356		$	849

Non-cash financing activities for the three months ended March 31, 2019 include $3.7 million of debt issuance costs deducted directly from the proceeds of borrowings by the lender. Refer to Note 4 – Debt for further information.

The accompanying notes are an integral part of these consolidated financial statements.

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles ~~generally accepted~~ in the United States of America (“GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for reporting on Form 10-Q. Accordingly, certain information and footnote disclosures required for complete financial statements are not included herein. The year-end balance sheet data was derived from audited financial statements, but does not include all disclosures required by ~~accounting principles generally accepted in the United States of America.~~GAAP. It is recommended that these financial statements be read in conjunction with the consolidated financial statements and related notes that appear in the Forrester Research, Inc. (“Forrester”) Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2019. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair statement of the financial position, results of operations, comprehensive ~~income~~loss and cash flows as of the dates and for the periods presented have been included. The results of operations for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 may not be indicative of the results for the year ending December 31, ~~2017,~~2020, or any other period.

The global spread of the novel coronavirus (COVID-19), which has been declared by the World Health Organization to be a “pandemic”, has spread to many countries and is impacting worldwide economic activity. Many governments have implemented policies intended to stop or slow the further spread of the disease, such as shelter-in-place orders, resulting in the temporary closure of non-essential businesses, and these measures may remain in place for a significant period of time. Due to COVID-19 materially impacting our business beginning only in the last month of the quarter, the impact on our business in the first quarter of 2020 is primarily limited to March customer contract bookings and the amount of consulting projects delivered. While the duration and severity of this pandemic is uncertain, the Company currently expects that its results of operations in the second quarter of 2020 will have the most significant impact of the effects of COVID-19, and that subsequent periods will also be negatively impacted. The Company typically generates a significant portion of its Events revenues in the second quarter of the year, including revenues from its two flagship events, the SiriusDecisions Summit and CX North America, both of which will be held as virtual events, resulting in a significant reduction in revenues and profits from these two events. In addition, the Company cancelled two smaller events originally scheduled for the second quarter of the year. The Company also expects a reduction in its subscription Research, Connect and Analytics revenues and a reduction in Consulting revenues during the second quarter due to reduced customer contract booking activity in March, which is expected to continue through at least the second quarter of 2020. The extent to which the COVID-19 pandemic ultimately impacts the Company’s business, financial condition, results of operations, cash flows, and liquidity may differ from the Company’s current estimates due to inherent uncertainties regarding the duration and further spread of the outbreak, its severity, actions taken to contain the virus or treat its impact, and how quickly and to what extent normal economic and operating conditions can resume.

The Company has implemented several cost-reduction measures that include reductions to travel, new hiring, and employee incentive compensation programs. The Company will continue to proactively respond to the situation and may take further actions that alter the Company’s business operations as may be required by governmental authorities, or that the Company determines are in the best interests of its employees and customers.

As of March 31, 2020, the Company is in compliance with its financial covenants under its Credit Agreement (refer to Note 4 – Debt). The Company currently forecasts that it will be in compliance with its financial covenants for at least one year from the issuance of these interim financial statements, after taking into consideration the measures noted above. If the impact of COVID-19 is more severe than currently forecasted this may impact the Company’s ability to comply with its financial covenants which could have a material adverse effect on the Company.

The Company assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to it and the unknown future impacts COVID-19 as of March 31, 2020 and through the date of this report. The accounting matters assessed included, but were not limited to, the allowance for expected credit losses, the carrying value of our goodwill and other long-lived assets, valuation allowances for tax assets and revenue recognition. While there was not a material impact to the consolidated financial statements as of and for the quarter ended March 31, 2020 resulting from the Company’s assessments, the Company’s future assessment of its current expectations of the magnitude and duration of COVID-19, as well as other factors, could result in material impacts to its consolidated financial statements in future reporting periods.

The following table summarizes the end-of-period cash and cash equivalents from the Company's Consolidated Balance Sheets and the total cash, cash equivalents and restricted cash as presented in the accompanying Consolidated Statements of Cash Flows (in thousands).

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (“Topic 326”). The standard amends the existing financial instrument incurred loss impairment model by requiring entities to use a forward-looking approach based on expected losses and to consider a broader range of reasonable and supportable information to estimate credit losses on certain types of financial instruments, including trade receivables. On January 1, 2020, the Company adopted the standard using the modified retrospective method in which prior periods are not adjusted and recorded a cumulative effect adjustment of $0.2 million to decrease retained earnings. Expected losses are based, in part, on the Company’s historical loss rate experience as well as management’s expectations of future losses as informed by current economic conditions.

The allowance for expected credit losses on accounts receivable for the three months ended March 31, 2020 is summarized as follows (in thousands):

The Company adopted the guidance in ASU No. 2017-04, Intangibles-Goodwill and Other: Simplifying the Test for Goodwill Impairment on January 1, 2020. The new standard simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test and requires that instead, an entity should perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. The adoption of this standard did not impact the Company’s financial position or results of operations.

The Company adopted the guidance in ASU No. 2018-13, Fair Value Measurement Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement on January 1, 2020. The new standard modifies the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, including changes to fair value transfers and Level 3 fair value measurements. Changes required upon adoption of this standard are included in Note 8 – Fair Value Measurements and did not impact the Company’s financial position or results of operations.

The Company adopted the guidance in ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract on January 1, 2020. The new standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The adoption of this standard did not have a material impact on the Company’s financial position or results of operations.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes – Simplifying the Accounting for Income Taxes. The new standard provides guidance to simplify the accounting for income taxes in certain areas, changes the accounting for select income tax transactions and makes other minor improvements. The new standard will be effective for the Company on January 1, 2021. The Company is currently evaluating the potential impact that this standard may have on its financial position and results of operations.

Forrester accounts for business combinations in accordance with the acquisition method of accounting as prescribed by Accounts Standards Codification (“ASC”) Topic 805, Business Combinations (“Topic 805”).��The acquisition method of accounting requires the Company to record the assets and liabilities acquired based on their estimated fair values as of the acquisition date, with any excess of the consideration transferred over the estimated fair value of the net assets acquired, including identifiable intangible assets, to be recorded to goodwill. The Company did not have any business combinations during the three months ended March 31, 2020.

On January 3, 2019, Forrester acquired 100% of the issued and outstanding shares of SiriusDecisions, Inc. (“SiriusDecisions”), a privately-held company based in Wilton, Connecticut with approximately 350 employees globally. SiriusDecisions equips business-to-business (B2B) sales, marketing, and product leaders with the actionable research, frameworks, tools, operational benchmarks and expert advice they need to maximize performance and drive alignment. The acquisition creates several opportunities for the Company, including cross-selling services to the Company’s respective client bases, extending SiriusDecisions’ platform, methodologies, data, and best-practices tools into new roles, and accelerating international and industry growth. The acquisition of SiriusDecisions was determined to be an acquisition of a business under the provisions of Topic 805.

Pursuant to the terms of the merger agreement, the Company paid $246.8 million at closing after certain transaction expense adjustments, which was subject to a working capital adjustment.

SiriusDecisions’ operating results and the related goodwill are reported within the Company’s Products and Research segments, as realigned on January 1, 2020 and further discussed in Note 14 – Operating Segments. During the year ended December 31, 2019, the Company finalized the purchase price allocation and related accounting for the acquisition.

The Company recognized $1.7 million of acquisition costs in the three months ended March 31, 2019 related to the SiriusDecisions acquisition. The costs primarily consisted of investment banker fees and other professional services costs and are included in acquisition and integration costs within the Consolidated Statements of Operations.

The change in the carrying amount of goodwill for the three months ended March 31, 2020 is summarized as follows (in thousands):

The Company assesses goodwill for impairment annually on November 30, or on an interim basis if an event indicates a specific impairment may exist. As a result of the Company’s segment realignment on January 1, 2020 (refer to Note 14 -Operating Segments for additional information), the Company performed a qualitative assessment of goodwill for all reporting units immediately prior to and after the reporting unit change, which was based on the quantitative assessment performed as of November 30, 2019 and activity in December 2019. The Company concluded that no impairment existed and goodwill was reassigned based on the relative fair values of the product lines transferred to each reporting unit. Approximately $12 million of goodwill is allocated to the Company’s Product reporting unit, which has a negative carrying value as of March 31, 2020.

As of March 31, 2020, the Company had no accumulated goodwill impairment losses.

The carrying values of finite-lived intangible assets are as follows (in thousands):

Estimated intangible asset amortization expense for each of the five succeeding years is as follows (in thousands):

In connection with the acquisition of SiriusDecisions, on January 3, 2019 (the “Closing Date”) the Company entered into a $200.0 million credit agreement (the “Credit Agreement”). The Credit Agreement provides for: (1) senior secured term loans in an aggregate principal amount of $125.0 million (the “Term Loans”) and (2) a senior secured revolving credit facility in an aggregate principal amount of $75.0 million (the “Revolving Credit Facility”). On the Closing Date, the full $125.0 million of the Term Loans and $50.0 million of the Revolving Credit Facility were used to finance a portion of the acquisition of SiriusDecisions and to pay certain fees, costs and expenses incurred in connection with the acquisition and the Credit Agreement. The Credit Agreement is scheduled to mature on January 3, 2024.

The Credit Agreement permits the Company to borrow incremental term loans and/or increase commitments under the Revolving Credit Facility in an aggregate principal amount up to $50.0 million, subject to approval by the administrative agent and certain customary terms and conditions.

The Term Loans and Revolving Credit Facility can be repaid early, in part or in whole, at any time and from time to time, without premium or penalty, other than customary breakage reimbursement requirements for London Interbank Offering Rate (“LIBOR”) based loans. The Term Loans must be prepaid with net cash proceeds of (i) certain debt incurred or issued by Forrester and its restricted subsidiaries and (ii) certain asset sales and condemnation or casualty events, subject to certain reinvestment rights.

Amounts borrowed under the Credit Agreement bear interest, at Forrester’s option, at a rate per annum equal to either (i) LIBOR for the applicable interest period plus a margin that is between 1.75% and 2.50% based on Forrester’s consolidated total leverage ratio or (ii) the alternate base rate plus a margin that is between 0.75% and 1.50% based on Forrester’s consolidated total leverage ratio. In addition, the Company pays a commitment fee that is between 0.25% and 0.35% per annum, based on Forrester’s consolidated total leverage ratio, on the average daily unused portion of the Revolving Credit Facility, payable quarterly, in arrears.

The Term Loans require repayment of the outstanding principal balance in quarterly installments each year, commencing on March 31, 2019 with the balance repayable on the maturity date, subject to customary exceptions. The amount payable in each year as of March 31, 2020 is set forth in the table below (in thousands):

The Revolving Credit Facility does not require repayment prior to maturity, subject to customary exceptions. In addition to financing the acquisition, proceeds from the Revolving Credit Facility can also be used towards working capital and general corporate purposes. Up to $5.0 million of the Revolving Credit Facility is available for the issuance of letters of credit, and any drawings under the letters of credit must be reimbursed within one business day. As of March 31, 2020, $0.9 million in letters of credit were issued under the Revolving Credit Facility.

Forrester incurred $1.8 million in costs related to the Revolving Credit Facility, which are recorded in other assets on the Consolidated Balance Sheets. These costs are being amortized as interest expense on the Consolidated Statements of Operations on a straight-line basis over the five-year term of the Revolving Credit Facility. Forrester incurred $2.8 million in costs related to the Term Loans, which are recorded as a reduction to the face value of long-term debt on the Consolidated Balance Sheets. These costs are being amortized as interest expense on the Consolidated Statements of Operations utilizing the effective interest rate method.

The following table summarizes the Company’s total outstanding borrowings as of the dates indicated (in thousands):

The Credit Agreement contains certain customary restrictive loan covenants, including among others, financial covenants that apply a maximum leverage ratio and minimum fixed charge coverage ratio. The maximum leverage ratio is based on total debt outstanding at the measurement date divided by EBITDA (as defined in the Credit Agreement) and the fixed charge coverage ratio is based upon EBITDA, as defined, less capital expenditures, as a ratio to certain fixed charges, including Term Loan amortization, cash interest expense and cash taxes. The negative covenants limit, subject to various exceptions, the Company’s ability to incur additional indebtedness, create liens on assets, merge, consolidate, liquidate or dissolve any part of the Company, sell assets, pay dividends or other payments in respect to capital stock, change fiscal year, or enter into certain transactions with affiliates and subsidiaries. The Credit Agreement also contains customary events of default, representations, and warranties.

As of March 31, 2020, the Company is in compliance with its financial covenants under the Credit Agreement. The Company currently forecasts that it will be in compliance with its financial covenants for at least one year from the issuance of these interim financial statements, after taking into consideration the cost-reduction measures implemented during the first quarter of the year. If the impact of COVID-19 is more severe than currently forecasted this may impact the Company’s ability to comply with its financial covenants, and it is not certain that the Company would be able to renegotiate the terms of the Credit Agreement in order to provide relief related to the financial covenants. If the Company were unable to meet its financial covenants and then were unable to renegotiate the terms of its financial covenants, all debt outstanding under the Credit Agreement could become immediately due and payable.

All obligations under the Credit Agreement are unconditionally guaranteed by each of the Company’s existing and future, direct and indirect material wholly-owned domestic subsidiaries, other than certain excluded subsidiaries, and are collateralized by a first priority lien on substantially all tangible and intangible assets including intellectual property and all of the capital stock of the Company and its subsidiaries (limited to 65% of the voting equity of certain subsidiaries).

All of the Company’s leases are operating leases, the majority of which are for office space. Operating lease right-of-use (“ROU”) assets and non-current operating lease liabilities are included as individual line items on the Consolidated Balance Sheets, while short-term operating lease liabilities are recorded within accrued expenses and other current liabilities. Leases with an initial term of twelve months or less are not recorded on the Consolidated Balance Sheets and are not material.

Additional lease information is summarized in the following table (in thousands, except lease term and discount rate):

Future minimum lease payments under non-cancellable leases as of March 31, 2020 are as follows (in thousands):

The Company’s leases do not contain residual value guarantees, material restrictions or covenants, and all sublease transactions are not material. The Company incurred $1.4 million of ROU asset impairments during the three months ended March 31, 2020 related to facility leases from the SiriusDecisions, Inc. acquisition and are recorded in acquisition and integration costs in the Consolidated Statements of Operations.

During the three months ended March 31, 2020, the Company entered into several operating leases for office space which do not commence until later in 2020. These operating leases, which aggregated $17.2 million of undiscounted lease payments, have lease terms of up to ten years. Additionally, the Company could receive a variable incentive payment from its landlord to terminate one of its office space leases early. The range of possible incentive payments is zero to $3.5 million, would be received in late 2020 or the first half of 2021, and is dependent on the Company’s ability to exit the existing facility by the proposed early termination dates.

Accounts receivable includes amounts billed and currently due from customers. Since the only condition for payment of our invoices is the passage of time, the Company records a receivable on the date the invoice is issued. Also included in accounts receivable are unbilled amounts resulting from revenue exceeding the amount billed to the customer, where the right to payment is unconditional. If the right to payment for services performed was conditional on something other than the passage of time, the unbilled amount would be recorded as a separate contract asset. There were no contract assets as of March 31, 2020 or 2019.

The majority of the Company’s contracts are non-cancellable. However, for contracts that are cancellable by the customer, the Company does not record a receivable when it issues an invoice. The Company records accounts receivable on these contracts only up to the amount of revenue earned but not yet collected.

In addition, since the majority of the Company’s contracts are for a duration of one year and payment is expected within one year from the transfer of products and services, the Company does not adjust its receivables or transaction price for the effects of a significant financing component.

The Company refers to contract liabilities as deferred revenue on the Consolidated Balance Sheets. Payment terms in the Company’s customer contracts vary, but generally require payment in advance of fully satisfying the performance obligation(s). Deferred revenue consists of billings in excess of revenue recognized. Similar to accounts receivable, the Company does not record deferred revenue for invoices issued on a cancellable contract.

The Company recognized revenue of $69.9 and $58.1 million during the three months ended March 31, 2020 and 2019, respectively, related to its deferred revenue balance at the beginning of each such period. To determine revenue recognized in each such period from deferred revenue at the beginning of the period, the Company first allocates revenue to the individual deferred revenue balance outstanding at the beginning of the period, until the revenue equals that balance.

Approximately $343.6 million of revenue is expected to be recognized during the next 12 to 24 months from remaining performance obligations as of March 31, 2020.

The Company capitalizes commissions paid to internal sales representatives and related fringe benefits costs that are incremental to obtaining customer contracts. These costs are included in deferred commissions on the Consolidated Balance Sheets. The Company accounts for these costs at a portfolio level as the Company’s contracts are similar in nature and the amortization model used closely matches the amortization expense that would be recognized on a contract-by-contract basis. Costs to obtain a contract are amortized to operations as the related revenue is recognized over the initial contract term. Amortization expense related to deferred commissions was $8.1 million and $7.2 million for the three months ended March 31, 2020 and 2019, respectively. The Company evaluates the recoverability of deferred commissions at each balance sheet date.

During 2019, the Company entered into an interest rate swap contract to mitigate the cash flow risk associated with changes in interest rates on its variable rate debt (see Note 4 – Debt). The Company accounts for its outstanding interest rate swap contract in accordance with FASB ASC Topic 815 – Derivatives and Hedging (“Topic 815”), which requires all derivatives, including derivatives designated as accounting hedges, to be recorded on the balance sheet at fair value.

At March 31, 2020, the Company had a single interest rate swap contract that matures in 2022, with an initial notional amount of $95.0 million. The notional amount at March 31, 2020 was $89.1 million. The Company pays a base fixed rate of 1.65275% and in return receives the greater of (1) 1-month LIBOR, rounded up to the nearest 1/16 of a percent, or (2) 0.00%. The fair value of the swap on March 31, 2020 was a liability of $1.8 million (see Note 8 – Fair Value Measurements for information on determining the fair value). The liability is included in other non-current liabilities in the Consolidated Balance Sheets.

The swap has been designated and accounted for as a cash flow hedge of the forecasted interest payments on the Company’s debt. As long as the swap continues to be a highly effective hedge of the designated interest rate risk, changes in the fair value of the swap are recorded in accumulated other comprehensive loss, a component of equity. Any ineffective portion of a change in the fair value of a hedge is recorded in earnings.

As required under Topic 815, the swap’s effectiveness is assessed on a quarterly basis. Since its inception, and through March 31, 2020, the interest rate swap was considered highly effective. Accordingly, the $1.3 million net accumulated loss as of March 31, 2020 continues to be deferred and recorded, net of taxes, in other comprehensive loss. The Company expects $0.7 million of this loss, net of taxes, to be reclassified into earnings within the next 12 months.

The Company’s derivative counterparty is an investment grade financial institution. The Company does not have any collateral arrangements with its derivative counterparty and the derivative contract does not contain credit risk related contingent features.

The Company did not have any derivatives as of, or during, the three months ended March 31, 2019.

The carrying amounts reflected in the Consolidated Balance Sheets for cash, ~~and cash equivalents,~~ accounts receivable, accounts payable, and accrued expenses (excluding the contingent consideration discussed below) approximate fair value due to their short-term maturities. ~~See~~The Company’s financial instruments also include its outstanding variable-rate borrowings (refer to Note 34 – ~~Marketable Investments - for the fair value of the Company’s marketable investments.~~

Debt). The Company ~~adopted~~believes that the ~~guidance in Accounting Standards Update ("ASU") No. 2016-09,~~ ~~Compensation - Stock Compensation~~ - ~~Improvements to Employee Share-Based Payment Accounting~~,carrying amount of its variable-rate borrowings reasonably approximate their fair values because the rates of interest on January 1, 2017. Under this standard, entities are permitted to make an accounting policy election to either estimate forfeitures on share-based payment awards, as previously required, or to recognize forfeitures as they occur. The Company has elected to recognize forfeitures as they occur and the impactthose borrowings reflect current market rates of ~~that change in accounting policy has been recorded as a $0.2 million cumulative effect adjustment to increase retained earnings as of January 1, 2017.~~

Additionally, ASU No. 2016-09 requires that all income tax effects related to settlements of share-based payment awards be reported in earnings as an increase or decrease to income tax expense. Previously, income tax effects at settlement of an award were reported as an increase (or decrease) to additional paid-in capital to the extent that those benefits were greater than (or less than) the income tax effects reported in earnings during the award's vesting period. The requirement to report those income tax effects in earnings has been applied on a prospective basis to settlements occurring on or after January 1, 2017, and the impact of applying this guidance resulted in a $0.3 million tax benefit for the three and nine months ended September 30, 2017. Application of this guidance may result in fluctuations in the Company’s effective tax rate depending on how many options are exercised, how many restricted stock units vest and the volatility of the Company’s stock price.

ASU 2016-09 also requires that all income tax-related cash flows resulting from share-based payments be reported as operating activities in the statement of cash flows. Previously, income tax benefits at settlement of an award were reported as a reduction to operating cash flows and an increase to financing cash flows to the extent that those benefits exceeded the income tax benefits reported in earnings during the award's vesting period. In addition, the standard requires that cash paid by directly withholding shares for tax withholding purposes be classified as a financing activity in the statement of cash flows. ~~For the nine months ended September 30, 2017, the Company reflected $2.5 million of tax withholding in financing activities.~~ ~~The Company has elected to apply the changes in cash flow classification on a retrospective basis~~ ~~resulting in an increase in operating cash flows, with a corresponding decrease in financing cash flows, of $2.4 million for the nine months ended September 30, 2016,~~ ~~as compared to the amounts previously reported.~~

~~The Company elected to early adopt the guidance in ASU No. 2016-16,~~ ~~Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory~~, on January 1, 2017. The guidance in this standard eliminates for all intra-entity sales of assets other than inventory, the exception under existing standards that permits the tax effects of intra-entity asset transfers to be deferred until the

transferred asset is sold to a third party or otherwise recovered through use. As a result, a reporting entity would recognize the tax expense from the sale of the asset in the seller’s tax jurisdiction when the transfer occurs and any deferred tax asset that arises in the buyer’s jurisdiction would also be recognized at the time of the transfer. As a result, the Company has recorded a $0.5 million~~cumulative effect adjustment to reduce retained earnings as of January 1, 2017.~~

~~The components of accumulated other comprehensive income (loss) are as follows (in thousands):~~

~~The following table summarizes the Company’s marketable investments (in thousands):~~

Realized gains and losses on investments are included in earnings and are determined using the specific identification method. Realized gains or losses on the sale of the Company’s marketable investments were not material in the three and nine months ended September 30, 2017 and 2016.

~~The following table summarizes the maturity periods of the marketable investments in the Company’s portfolio as of September 30, 2017 (in thousands).~~

The following table shows the gross unrealized losses and market value of the Company’s available-for-sale securities with unrealized losses that are not deemed to be other-than-temporary, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position (in thousands):

~~The~~ Company measures certain financial assets at fair value on a recurring basis including cash equivalents, contingent purchase price related to acquisitions, and ~~available-for-sale securities.~~its interest rate swap. The fair values of these financial assets have been classified as Level 1, 2 or 3 within the fair value hierarchy as described in the accounting standards for fair value ~~measurements.~~measurements:

Level 1 — Fair value based on quoted prices in active markets for identical assets or liabilities.

Level 2 — Fair value based on inputs other than Level 1 inputs that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 — Fair value based on unobservable inputs that are supported by little or no market activity and such inputs are significant to the fair value of the assets or liabilities.

The following table represents the Company’s fair value hierarchy for its financial assets ~~(cash equivalents~~ and ~~investments)~~liabilities that are measured at fair value on a recurring basis (in thousands):

As of September 30, 2017

Level 1

Level 2

Level 3

Total

Money market funds (1)

$
763

$
—

$
—

$
763

Federal agency obligations

—

1,796

—

1,796

Corporate obligations

—

52,223

—

52,223

Total

$
763

$
54,019

$
—

$
54,782

	As of March 31, 2020
	Level 1		Level 2			Level 3			Total
Assets:
Money market funds (1)	$	2,811	$	—		$	—		$	2,811
Total Assets:	$	2,811	$	—		$	—		$	2,811

Liabilities
Contingent purchase price (2)	$	—	$	—		$	(2,524	)	$	(2,524	)
Interest rate swap (3)		—	$	(1,787	)		—			(1,787	)
Total Liabilities:	$	—	$	(1,787	)	$	(2,524	)	$	(4,311	)

	As of December 31, 2019
	Level 1		Level 2			Level 3			Total
Assets:
Money market funds (1)	$	2,354	$	—		$	—		$	2,354
Total Assets:	$	2,354	$	—		$	—		$	2,354

Liabilities
Contingent purchase price (2)	$	—	$	—		$	(2,511	)	$	(2,511	)
Interest rate swap (3)		—	$	(144	)		—			(144	)
Total Liabilities:	$	—	$	(144	)	$	(2,511	)	$	(2,655	)

Level 2 assets consist of the Company’s entire portfolio of marketable investments. Level 2 assets have been initially valued at the transaction price and subsequently valued, at the end of each reporting period, typically utilizing third party pricing services or other market observable data. The pricing services utilize industry standard valuation methods, including both income and market based approaches and observable market inputs to determine value. These observable market inputs include reportable trades, benchmark yields, credit spreads, broker/dealer quotes, bids, offers, current spot rates and other industry and economic events.

At September 30, 2017 and December 31, 2016, the carrying value of the Company’s non-marketable investments, which were composed primarily of interests in technology-related private equity funds, was $1.5 million and $2.8 million, respectively, and is included in other assets in the Consolidated Balance Sheets.

The Company’s investments at September 30, 2017 are being accounted for using the equity method as the investments are limited partnerships and the Company has an ownership interest in excess of 5% and, accordingly, the Company records its share of the investee’s operating results each period. Losses from non-marketable investments were $0.8 million and $1.0 million during the three and nine months ended September 30, 2017. Losses from non-marketable investments were $1.1 million and $1.2 million during the three and nine months ended September 30, 2016. Losses are included in Losses on investments, net in the Consolidated Statements of Income. At December 31, 2016, the Company’s investments also included an investment with a book value of $0.4 million, which was accounted for using the cost method. This investment was fully liquidated duringDuring the three months ended March 31, 2017. During the three months ended September 30, 2017, no distributions were received from the funds. During the nine months ended September 30, 2017, distributions of $0.4 million were received from the funds. During the nine months ended September 30, 2016, no distributions were received from the funds.

~~In the first quarter of 2016,~~2020 and 2019, the Company ~~implemented a reduction~~did not transfer assets or liabilities between levels of the fair value hierarchy. Additionally, there have been no changes to the valuation techniques for Level 2 or Level 3 liabilities.

Level 3 liabilities at March 31, 2020 consist entirely of the contingent purchase price related to the acquisition of FeedbackNow. Changes in ~~its workforce~~the fair value of ~~approximately 2% of its employees across various geographies and functions. The Company recorded $1.0 million of severance and related costs~~Level 3 contingent consideration for ~~this action during~~ the three months ended March 31, ~~2016. All costs under this plan~~2020 were ~~paid during 2016.~~as follows (in thousands):

Forrester provides for income taxes on an interim basis according to management’s estimate of the effective tax rate expected to be applicable for the full fiscal year. Certain items such as changes in tax rates, tax benefits or expense related to settlements of share-based payment awards, and foreign currency gains or losses are treated as discrete items and are recorded in the period in which they arise.

Income tax expense for the three months ended March 31, 2020 was $19 thousand resulting in an effective tax rate of negative 3.8% for the period. Income tax benefit for the three months ended March 31, 2019 was $0.2 million resulting in an effective tax rate of 1.7% for the period.

The Company anticipates that its effective tax rate for the full year 2020 will be approximately 10% to 15%.

On March 27, 2020, Congress enacted the Coronavirus Aid, Relief and Economic Security ("CARES") Act to provide certain relief as a result of the COVID-19 outbreak. The Company is currently evaluating the potential impact that the provisions in the CARES may have on its financial position and results of operations.

The components of accumulated other comprehensive loss are as follows (in thousands):

Basic net ~~income~~loss per common share is computed by dividing net ~~income~~loss by the basic weighted average number of common shares outstanding during the period. Diluted net ~~income~~loss per common share is computed by dividing net ~~income~~loss by the diluted weighted average number of common shares and common equivalent shares outstanding during the period. The weighted average number of common equivalent shares outstanding has been determined in accordance with the treasury-stock method. Common equivalent shares consist of common stock issuable on the exercise of outstanding stock options and the vesting of restricted stock ~~units when dilutive.~~units.

	Three Months Ended March 31, 2020
	Common Stock									Treasury Stock					Accumulated
	Number of Shares		$0.01 Par Value		Additional Paid-in Capital		Retained Earnings			Number of Shares		Cost			Other Comprehensive Income (Loss)			Total Equity
Balance at December 31, 2019		23,275	$	233	$	216,454	$	118,147			4,631	$	(171,889	)	$	(4,857	)	$	158,088
Issuance of common stock under stock plans, net		114		1		1,052		—			—		—			—			1,053
Stock-based compensation expense		—		—		2,802		—			—		—			—			2,802
Cumulative effect adjustment due to adoption of new accounting pronouncement, net of tax of $61		—		—		—		(157	)		—		—			—			(157	)
Net loss		—		—		—		(513	)		—		—			—			(513	)
Net change in interest rate swap, net of tax of $462		—		—		—		—			—		—			(1,181	)		(1,181	)
Foreign currency translation		—		—		—		—			—		—			(1,920	)		(1,920	)
Balance at March 31, 2020		23,389	$	234	$	220,308	$	117,477			4,631	$	(171,889	)	$	(7,958	)	$	158,172

	Three Months Ended March 31, 2019
	Common Stock									Treasury Stock					Accumulated
	Number of Shares		$0.01 Par Value		Additional Paid-in Capital		Retained Earnings			Number of Shares		Cost			Other Comprehensive Income (Loss)			Total Equity
Balance at December 31, 2018		22,951	$	230	$	200,696	$	127,717			4,631	$	(171,889	)	$	(5,154	)	$	151,600
Issuance of common stock under stock plans, net		99		1		3,274		—			—		—			—			3,275
Stock-based compensation expense		—		—		2,685		—			—		—			—			2,685
Net loss		—		—		—		(13,316	)		—		—			—			(13,316	)
Foreign currency translation		—		—		—		—			—		—			(430	)		(430	)
Balance at March 31, 2019		23,050	$	231	$	206,655	$	114,401			4,631	$	(171,889	)	$	(5,584	)	$	143,814

Restricted stock unit activity for the three months ended March 31, 2020 is presented below (in thousands, except per share data):

Stock option activity for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2020 is presented below (in thousands, except per share data and contractual term):

Weighted -

Weighted -

Average

Average

Exercise

Remaining

Aggregate

Number

Price Per

Contractual

Intrinsic

of Shares

Share

Term (in years)

Value

Outstanding at December 31, 2016

1,540

$
34.35

Granted

—

—

Exercised

(385
)

32.32

Forfeited

(73
)

34.44

Outstanding at September 30, 2017

1,082

$
35.07

6.01

$
7,332

Exercisable at September 30, 2017

771

$
34.92

5.36

$
5,340

Vested and expected to vest at September 30, 2017

1,082

$
35.07

6.01

$
7,332

~~Restricted stock unit activity for the nine months ended September 30, 2017 is presented below (in thousands, except per share data):~~

Weighted-

Average

Number of

Grant Date

Shares

Fair Value

Unvested at December 31, 2016

539

$
35.50

Granted

241

39.58

Vested

(205
)

35.28

Forfeited

(51
)

36.01

Unvested at September 30, 2017

524

$
37.42

				Weighted -		Weighted -
				Average		Average
				Exercise		Remaining		Aggregate
	Number			Price Per		Contractual		Intrinsic
	of Shares			Share		Term (in years)		Value
Outstanding at December 31, 2019		436		$	35.62
Granted		—			—
Exercised		(17	)		33.53
Forfeited		(33	)		38.46
Outstanding at March 31, 2020		386		$	35.47		3.54	$	4
Exercisable at March 31, 2020		378		$	35.42		3.56	$	4
Vested and expected to vest at March 31, 2020		386		$	35.47		3.54	$	4

Forrester recognizes the fair value of stock-based compensation ~~in net income~~ over the requisite service period of the individual grantee, which generally equals the vesting ~~period.~~ period. Stock-based compensation was recorded in the following expense categories in the Consolidated Statements of Operations (in thousands):

Forrester utilizes the Black-Scholes valuation model for estimating the fair value of shares subject to purchase under the employee stock purchase plan, which were valued using the following assumptions:

InAs a result of the ~~nine~~acquisition of SiriusDecisions on January 3, 2019 (see Note 2 – Acquisitions), and the related debt incurred to fund the acquisition (see Note 4 – Debt), the Company suspended its dividends program in 2019. The Company did not declare or pay any dividends in the three months ended ~~September 30, 2017, the Company declared~~March 31, 2020 and paid dividends of $10.2 million consisting of a $0.19 per share dividend in each of the first three quarters of 2017. In the nine months ended September 30, 2016, the Company declared and paid dividends of $9.7 million consisting of a $0.18 per share dividend in each of the first three quarters of 2016. In October 2017, the Company declared a dividend of $0.19 per share payable on December 20, 2017 to shareholders of record as of December 6, 2017.March 31, 2019, respectively.

As of ~~September 30, 2017,~~March 31, 2020, Forrester’s Board of Directors had authorized an aggregate ~~$485.0~~$535.0 million to purchase common stock under its stock repurchase program. The shares repurchased may be used, among other things, in connection with Forrester’s equity incentive and purchase plans. In the three ~~and nine~~ months ended ~~September 30, 2017,~~March 31, 2020 and March 31, 2019, the ~~Company repurchased approximately 0.1 and 1.1 million shares, respectively, of common stock at an aggregate cost of approximately $3.5 million and $40.0 million, respectively. The~~ Company did not repurchase any shares of common ~~stock in the nine months ended September 30, 2016.~~stock. From the inception of the program through ~~September 30, 2017, Forrester~~March 31, 2020, the Company repurchased ~~16.1~~16.3 million shares of common stock at an aggregate cost of ~~$464.9~~$474.9 million.

~~Forrester provides for income taxes on an interim basis according to management’s estimate of~~At March 31, 2020 and December 31, 2019, the effective tax rate expected to be applicable for the full fiscal year. Certain items such as changes in tax rates and tax benefits or expense related to settlements of share-based payment awards are treated as discrete items and are recorded in the period in which they arise.

Income tax expense for the nine months ended September 30, 2017 was $6.3 million resulting in an effective tax rate of 32.6% for the period. Income tax expense for the nine months ended September 30, 2016 was $9.1 million resulting in an effective tax rate of 43.4% for the period. The decrease in the effective tax rate during the nine months ended September 30, 2017 compared to the prior year period was primarily due to the recognition of a $1.3 million benefit from the settlement of a tax audit in the first quarter of 2017 and the recognition of approximately $0.3 million of windfall tax benefits from the settlement of options and restricted stock units during the third quarter of 2017. In addition, in 2016 an additional $0.6 million of tax expense was incurred due to a valuation allowance on a capital loss generated from onecarrying value of the Company’s ~~investments. For~~non-marketable investments, which were composed of interests in technology-related private equity funds, was $2.5 million, and is included in other assets in the ~~full year 2017,~~Consolidated Balance Sheets.

The Company’s non-marketable investments are accounted for using the equity method as the investments are limited partnerships and the Company ~~anticipates that~~has an ownership interest in excess of 5% and, accordingly, the Company records its ~~effective tax rate will be approximately 35%.~~share of the investee’s operating results each period. Gains (losses) from non-marketable investments were immaterial during the three months ended March 31, 2020 and 2019 and are included in gain (loss) on investments, net in the Consolidated Statements of Operations. During the three months ended March 31, 2020 and 2019, no distributions were received from the funds.

As of January 1, 2020, the Company realigned its internal management and reporting into Products and Research segments. The ~~Research~~realignment eliminated the SiriusDecisions segment as it no longer operated under a separate management structure. The 2019 amounts have been revised to conform to the current presentation.

The Products segment includes the revenues of the Connect, Analytics, and Events products and the costs of the ~~Company’s research personnel who are~~organizations responsible for ~~writing the research~~developing and ~~performing the webinars and inquiries for the Company’s Research and Connect~~delivering these products. In addition, this segment includes Consulting revenues and the ~~research personnel deliver advisory services (such as workshops, speeches and advisory days) and a portion~~related cost of the Company’s project consulting ~~services. Revenue in this segment includes only~~organization. The project consulting organization delivers a majority of the Company’s project consulting revenue ~~from~~and certain advisory services ~~and project consulting services that are delivered by~~primarily related to the ~~research personnel in this segment.~~

~~The Product~~Analytics product line. This segment also includes the costs of the product management organization that is responsible for product pricing and packaging and the launch of new products.

The Research segment includes the revenues of the Research products and the cost of the organizations responsible for developing and delivering the Company’s Research products. In addition, this segment includes Consulting revenues primarily from the ~~costs~~delivery of ~~the Company’s Data, Connect and Events organizations. Revenue in this segment includes all revenue for the Company (including Research and Connect) except for revenue from~~ advisory services (such as workshops, speeches and ~~project consulting services that are delivered by personnel in the Research and Project Consulting segments.~~

The Project Consulting segment includes the costs of the consultants that deliver the majority of the Company’s project consulting services. Revenue in this segment includes the project consulting revenueadvisory days) delivered by the ~~consultants in this segment.~~Company’s research analysts.

The Company evaluates reportable segment performance and allocates resources based on segment revenues and expenses. Segment expenses include the direct expenses of each segment organization and ~~exclude~~excludes selling and marketing ~~expenses, certain client support~~ expenses, general and administrative expenses, stock-based compensation expense, depreciation expense, adjustments to incentive bonus compensation from target amounts, amortization of intangible assets, ~~reorganization costs,~~interest and other ~~income,~~expense, and losses on investments. The accounting policies used by the segments are the same as those used in the consolidated financial statements.

~~In the first quarter of 2017, the~~The Company ~~modified its internal reporting for the Research and Project Consulting segments to reflect the transfer of~~provides disaggregated revenue and direct costs related to a small consulting team in Asia Pacific from Research to Project Consulting, and to remove from both Research and Project Consulting certain client support activities that are now included within selling, marketing, administrative and other expensesby product in the ~~table below. Accordingly, the 2016 amounts have been reclassified to conform to the current presentation.~~segment tables below (in thousands):

						Project					Products			Research			Consolidated
Three Months Ended March 31, 2020
Research services revenues
Research											$	—		$	53,606		$	53,606
Connect												13,889			—			13,889
Analytics												5,301			—			5,301
Total research services revenues												19,190			53,606			72,796
	Product		Research			Consulting		Consolidated
Three Months Ended September 30, 2017
Research services revenues	$	54,235	$	—		$	—	$	54,235
Advisory services and events revenues		3,353		10,379			12,402		26,134
Consulting												20,638			12,821			33,459
Events												90			—			90
Total advisory services and events revenues												20,728			12,821			33,549
Total segment revenues		57,588		10,379			12,402		80,369			39,918			66,427			106,345
Segment expenses		9,764		11,953			6,443		28,160			(19,378	)		(18,784	)		(38,162	)
Contribution margin (loss)		47,824		(1,574	)		5,959		52,209
Selling, marketing, administrative and other expenses									(45,263	)								(59,875	)
Amortization of intangible assets									(197	)								(4,712	)
Reorganization costs									—
Other income and losses on investments									(626	)
Income before income taxes								$	6,123
Acquisition and integration costs																		(2,875	)
Interest expense, other income and gain on investments																		(1,215	)
Loss before income taxes																	$	(494	)

Project

Product

Research

Consulting

Consolidated

Three Months Ended September 30, 2016

Research services revenues

$
52,727

$
—

$
—

$
52,727

Advisory services and events revenues

2,333

10,330

12,037

24,700

Total segment revenues

55,060

10,330

12,037

77,427

Segment expenses

8,884

11,586

5,522

25,992

Contribution margin (loss)

46,176

(1,256
)

6,515

51,435

Selling, marketing, administrative and other expenses

(43,675
)
Amortization of intangible assets

(208
)
Reorganization costs

—

Other income and losses on investments

(856
)
Income before income taxes

$
6,696

Project

Product

Research

Consulting

Consolidated

Nine Months Ended September 30, 2017

Research services revenues

$
160,553

$
—

$
—

$
160,553

Advisory services and events revenues

15,714

32,279

38,750

86,743

Total segment revenues

176,267

32,279

38,750

247,296

Segment expenses

32,788

36,510

18,886

88,184

Contribution margin (loss)

143,479

(4,231
)

19,864

159,112

Selling, marketing, administrative and other expenses

(138,432
)
Amortization of intangible assets

(582
)
Reorganization costs

—

Other income and losses on investments

(749
)
Income before income taxes

$
19,349

Project

Product

Research

Consulting

Consolidated

Nine Months Ended September 30, 2016

Research services revenues

$
160,998

$
—

$
—

$
160,998

Advisory services and events revenues

14,191

33,244

34,216

81,651

Total segment revenues

175,189

33,244

34,216

242,649

Segment expenses

30,306

36,026

17,465

83,797

Contribution margin (loss)

144,883

(2,782
)

16,751

158,852

Selling, marketing, administrative and other expenses

(135,463
)
Amortization of intangible assets

(627
)
Reorganization costs

(1,026
)
Other income and losses on investments

(765
)
Income before income taxes

$
20,971

~~In May 2014, the Financial Accounting Standards Board (FASB) issued ASU No. 2014-09,~~ ~~Revenue from Contracts with Customers~~, which supersedes all existing revenue recognition requirements, including most industry specific guidance. The new standard requires a company to recognize revenue when it transfers goods or services to customers in an amount that reflects the consideration that the company expects to receive for those goods or services. The guidance also includes enhanced disclosure requirements which are intended to help financial statement users better understand the nature, amount, timing and uncertainty of revenue being recognized and the related cash flows. In March 2016, the FASB issued ASU No. 2016-08, ~~Revenue from Contracts with Customers: Principal versus Agent Considerations, which clarifies the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU No. 2016-10,~~ ~~Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing, which clarifies certain aspects of identifying performance obligations and licensing implementation guidance. In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers: Narrow Scope Improvements and Practical Expedients~~, which relates to disclosures of remaining performance obligations, as well as other amendments to guidance on collectability, noncash consideration and the presentation of sales and other similar taxes collected from customers. In December 2016, the FASB issued ASU 2016-20, ~~Technical Corrections and Improvements: Revenue from Contracts with Customers, which clarifies several topics including, certain types of transactions that are outside the scope of the new standard, disclosure requirements and balance sheet considerations.~~

The new standard will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The two permitted transition methods under the new standard are the full retrospective method, in which case the standard would be applied to each prior reporting period presented, or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of initial application. The Company has determined that it will adopt the standard utilizing the modified retrospective method.

In 2016, Forrester established a formal program and cross-functional implementation team to identify, design and implement changes to its accounting systems and policies, business processes and internal controls to support recognition and disclosures under the new standard. The Company believes that it has essentially completed its assessment of how the new standard will affect the Company’s revenue recognition for all of its products and services, and will complete its accounting system and business process changes by the end of 2017.

The Company does not anticipate that the standard will have a material impact on its results of operations. The number of performance obligations in the Company’s arrangements will not be different under the new standard than under current guidance. Determining standalone selling prices and allocating contract consideration on multiple element arrangements will follow a similar process as the Company’s current methodologies of establishing fair value / estimated selling price for our goods and services or allocating total contract consideration under the relative selling price method. Additionally, the timing of revenue recognition will remain substantially unchanged for most products. Subscription based research services revenues will continue to be recognized over time, using the new standard’s output method of time elapsed, as Forrester’s clients receive and consume the benefits of our services as we transfer control throughout the contract period. Advisory, reprint and events revenues will continue to be recognized at the point in time as control is transferred to the customer, which will generally be when the client has physical possession of the good(s) or upon completion of the service(s). The Company expects that most of its consulting contracts will continue to be recognized over time, while some contracts may be required to be recognized at a point in time upon completion of the project.

The Company will no longer record accounts receivable and deferred revenue on its balance sheet when it issues an invoice to a customer for a contract that is cancellable by the customer. For contracts that are cancellable, the Company will only record accounts receivable up to the amount of revenue earned but not yet collected. This change will have the effect of reducing the amount of accounts receivable and deferred revenue on the balance sheet compared to amounts recorded based on current accounting standards. The majority of the Company’s contracts are non-cancellable; however, the Company has not yet determined the effect of this change on its balance sheet.

	Products			Research			Consolidated
Three Months Ended March 31, 2019
Research services revenues
Research	$	—		$	49,780		$	49,780
Connect		13,571			—			13,571
Analytics		5,258			—			5,258
Total research services revenues		18,829			49,780			68,609

Advisory services and events revenues
Consulting		18,885			12,902			31,787
Events		253			—			253
Total advisory services and events revenues		19,138			12,902			32,040
Total segment revenues		37,967			62,682			100,649
Segment expenses		(19,948	)		(20,397	)		(40,345	)
Selling, marketing, administrative and other expenses								(62,011	)
Amortization of intangible assets								(6,210	)
Acquisition and integration costs								(2,967	)
Interest expense, other income and loss on investments								(2,658	)
Loss before income taxes							$	(13,542	)

Key areas still in process include the evaluation of costs to fulfill contracts and completion and testing of new functionality of the Company’s existing software systems that is being implemented as part of this project. The adoption program and all remaining activities, including updates to the Company’s systems, processes, policies and controls, are expected to be completed by the end of 2017. In addition, report development and testing for disclosure requirements in 2018 will be completed in the first quarter of 2018.

~~In February 2016, the FASB issued ASU No. 2016-02,~~ ~~Leases~~. The new standard requires that all lessees recognize the assets and liabilities that arise from leases on the balance sheet and disclose qualitative and quantitative information about its leasing arrangements. The new standard will be effective for the Company on January 1, 2019. The adoption of this standard is expected to have a material impact on the Company’s financial position as virtually all leases will be recorded on the balance sheets as a right-of-use asset and a lease liability. The Company is currently evaluating the potential impact that this standard may have on its results of operations.

~~In June 2016, the FASB issued ASU No. 2016-13,~~ ~~Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments~~. The new standard amends the current financial instrument impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables. The new standard will be effective for the Company on January 1, 2020. The adoption of this standard is not expected to have a material impact on the Company’s financial position or results of operations.

~~In August 2016, the FASB issued ASU No. 2016-15,~~ ~~Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments~~. The new standard clarifies certain aspects of the statement of cash flows, including contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, and distributions received from equity method investees, among others. The new standard will be effective for the Company on January 1, 2018. The adoption of this standard is not expected to have a material impact on the Company’s statements of cash flows upon adoption.

~~In January 2017, the FASB issued ASU No. 2017-04,~~ ~~Intangibles-Goodwill and Other: Simplifying the Test for Goodwill Impairment~~. The new standard simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test and requires that instead, an entity should perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. The new standard will be effective for the Company on January 1, 2020. The adoption of this standard is not expected to have a material impact on the Company’s financial position or results of operations.

ITEM 2. ~~MANAGEMENT’S~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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 possible acquisitions, payments pursuant to existing acquisition agreements, acquisition and integration costs, future dividends, future share repurchases, future growth rates and operating income, future compliance with financial covenants under our ~~plans for~~credit facility, anticipated increases in, and productivity of, our sales force and headcount, ~~future growth rates, future tax rates, future operating cash flows, future dividends, future share repurchases~~ and the adequacy of our cash ~~marketable investments~~ and cash flows to satisfy our working capital and capital expenditures. These statements are based on our current plans and expectations and involve risks and uncertainties that could cause actual future activities and results of operations to be materially different from those set forth in the forward-looking statements. Important factors that could cause actual future activities and results to differ include, among others, our ability to retain and enrich ~~memberships for~~subscriptions to, and licenses of, our ~~research, data~~Research, Connect, and ~~leadership board~~Analytics products, ~~and services,~~ our ability to fulfill existing or generate new ~~project~~advisory and consulting engagements, ~~the impact of~~ our ~~evolving customer engagement model,~~ability to generate and increase demand for our Events we host, technology spending, our ability to mitigate the adverse impact from the widespread outbreak of COVID-19 which could disrupt or restrict our ability to sell or fulfill, or reduce demand for, our products, services, and events, the risks and challenges inherent in international business activities including any impact of Brexit, our ability to offer new products and services, our dependence on key personnel, our ~~ability to realize anticipated benefits from internal reorganizations, the~~ ability to attract and retain qualified professional staff, our ability to respond to business and economic conditions and market trends, our ability to integrate the operations of acquired companies, the impact of our outstanding debt, the possibility of network disruptions and security breaches, competition and industry consolidation, our ability to enforce and protect our intellectual property rights, compliance with privacy laws, possible variations in our quarterly operating results, taxation risks, concentration of our stock ownership and any weakness identified in our system of internal controls. These risks are described more completely in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2019 and in Item 1A of Part II of this Quarterly Report on Form 10-Q for the year ended March 31, 2020. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.

The global spread of the novel coronavirus (COVID-19), which has been declared by the World Health Organization to be a “pandemic”, has spread to many countries and is impacting worldwide economic activity. Many governments have implemented policies intended to stop or slow the further spread of the disease, such as shelter-in-place orders, resulting in the temporary closure of non-essential businesses, and these measures may remain in place for a significant period of time. Due to COVID-19 materially impacting our business beginning only in the last month of the quarter, the impact on our business in the first quarter of 2020 is primarily limited to March customer contract bookings and the amount of consulting projects delivered. While the duration and severity of this pandemic is uncertain, we currently expect that our results of operations in the second quarter of 2020 will have the most significant impact of the effects of COVID-19, and that subsequent periods will also be negatively impacted. We typically generate a significant portion of our Events revenues in the second quarter of the year, including revenues from our two flagship events, the SiriusDecisions Summit and CX North America, both of which will be held as virtual events, resulting in a significant reduction in revenues and profits from these two events. In addition, we cancelled two smaller events originally scheduled for the second quarter of the year. We also expect a reduction in our subscription Research, Connect and Analytics revenues and a reduction in Consulting revenues during the second quarter due to reduced customer contract booking activity in March, which is expected to continue through at least the second quarter of 2020. The extent to which the COVID-19 pandemic ultimately impacts our business, financial condition, results of operations, cash flows, and liquidity may differ from our current estimates due to inherent uncertainties regarding the duration and further spread of the outbreak, its severity, actions taken to contain the virus or treat its impact, and how quickly and to what extent normal economic and operating conditions can resume.

We have implemented several cost-reduction measures that include reductions to travel, new hiring, and employee incentive compensation programs. We will continue to proactively respond to the situation and may take further actions that alter our business operations as may be required by governmental authorities, or that we determine are in the best interests of our employees and customers.

As previously noted, on January 3, 2019, we acquired 100% of the issued and outstanding shares of SiriusDecisions, Inc., a privately held company based in Wilton, Connecticut with approximately 350 employees globally. SiriusDecisions equips business-to-business (B2B) sales, marketing, and product leaders with the actionable research, frameworks, tools, operational benchmarks and expert advice to maximize performance and drive alignment. Pursuant to the terms of the merger agreement, the Company paid $246.8 million at closing. Net cash paid, which accounts for the cash acquired of $7.9 million and a subsequent working capital adjustment, was $237.7 million. We paid for the acquisition with $175.0 million of debt and cash on hand. See Note 2 - Acquisitions and Note 4 – Debt in the Notes to Consolidated Financial Statements for more information on the acquisition and related debt obligations.

We derive revenues from ~~memberships~~subscriptions to ~~and sales of,~~ our Research, Connect and ~~Data~~Analytics products and services, licensing electronic “reprints” of our Research, performing advisory services and consulting projects, and hosting ~~events.~~Events. We offer contracts for our Research, Connect and ~~Data~~Analytics products that are typically renewable annually and payable in advance. ~~Membership revenues~~Subscription products are recognized as revenue ratably over the term of the contract. Accordingly, a substantial portion of our billings are initially recorded as deferred revenue. Reprints include an obligation to deliver a customer-selected research document and certain usage data provided through an on-line 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. Billings for licensing of reprints are initially recorded as deferred revenue. Clients purchase advisory and consulting services independently and/or to supplement their ~~memberships~~access to our subscription-based products. Billings attributable to advisory services and consulting projects are initially recorded as deferred revenue. Advisory service revenues, such as workshops, speeches and advisory days, are recognized when the customer receives the agreed upon deliverable. Consulting project revenues, which generally are short-term in nature and based upon fixed-fee agreements, are recognized as the services are provided. ~~Event billings~~Advisory service revenues, such as workshops, speeches and advisory days, are recognized when the service is complete or the customer receives the agreed upon deliverable. Billings attributable to advisory services and consulting projects are initially recorded as deferred revenue. Events revenues consist of ticket or sponsorship sales for a Forrester-hosted event. Billings for Events are also initially recorded as deferred revenue and are recognized as revenue upon completion of each ~~event.~~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 and annual fees for cloud-based information technology systems are allocated to these categories according to the number of employees in each group.

Client retention includes all client relationships except for clients that only purchase web-based products such as individual reports, workshops and Event tickets. Dollar retention and enrichment are calculated at a client account level which results in a broader view of dollar retention and enrichment as it includes virtually all products in the calculations (except for web-based products mentioned above) and captures all enrichment that occurs within the year for an account.

Deferred revenue, agreement value, client retention, dollar retention, enrichment, and number of clients are metrics that we believe are important to understanding our business. We believe that the amount of deferred revenue, along with the agreement value of contracts, ~~to purchase research and advisory services,~~ provide a significant measure of our business activity. We define these metrics as follows:

Client retention, dollar retention, and enrichment 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						Absolute			Percentage			As of						Absolute			Percentage
	September 30,						Increase			Increase			March 31,						Increase			Increase
	2017			2016			(Decrease)			(Decrease)			2020			2019			(Decrease)			(Decrease)
Deferred revenue	$	132.9		$	126.2		$	6.7			5	%	$	195.4		$	191.6		$	3.8			2	%
Agreement value	$	237.8		$	241.1		$	(3.3	)		(1	%)	$	354.9		$	345.3		$	9.6			3	%
Client retention		76	%		76	%		—			—			69	%		72	%		(3	)		(4	%)
Dollar retention		88	%		88	%		—			—			89	%		90	%		(1	)		(1	%)
Enrichment		94	%		95	%		(1	)		(1	%)		102	%		106	%		(4	)		(4	%)
Number of clients		2,393			2,482			(89	)		(4	%)		2,805			2,850			(45	)		(2	%)

Deferred revenue at ~~September 30, 2017~~March 31, 2020 increased 5%2% compared to the prior ~~year. The~~year, with 4% of the increase indue to the fair value adjustment of pre-acquisition deferred revenue isthat reduced deferred revenue in the prior year, and a ~~result of~~2% decrease primarily due to a reduction in contract billings ~~in excess of revenue recognized due to an increase in contract bookings.~~during the three months ended March 31, 2020. Agreement value ~~decreased 1%~~increased 3% at ~~September 30, 2017~~March 31, 2020 compared to the prior year due primarily to increased bundling of Consulting services with our Research and ~~after adjusting for the effect of foreign currency fluctuations, remained essentially flat~~Connect products in our contracts. Client retention rate decreased 3 percentage points compared to the prior ~~year. Client~~year period. Dollar retention rate ~~and dollar retention rate both increased 1% compared to the prior quarter and were essentially flat~~decreased 1 percentage point compared to the prior year period. Enrichment rate ~~although essentially consistent with the prior quarter, declined 1%~~decreased 4 percentage points compared to the prior year period.

Retention and enrichment rates were negatively affected by a decrease in contract bookings experienced in March of 2020 as the economic effects of COVID-19 became widespread in Europe and North America.

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 ~~generally accepted~~ 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 policies and estimates, including but not limited to, those related to our revenue recognition, ~~non-marketable investments,~~leases, goodwill, intangible and other ~~intangible~~long-lived assets, and income taxes. Management bases its estimates on historical experience, data available at the time the estimates are made and various ~~other~~ 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 ~~other~~ critical accounting policies and estimates are described in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2019.

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

	Three Months Ended						Nine Months Ended						Three Months Ended
	September 30,						September 30,						March 31,
	2017			2016			2017			2016			2020			2019
Revenues:
Research services		67.5	%		68.1	%		64.9	%		66.4	%		68.5	%		68.2	%
Advisory services and events		32.5			31.9			35.1			33.6			31.5			31.8
Total revenues		100.0			100.0			100.0			100.0			100.0			100.0
Operating expenses:
Cost of services and fulfillment		40.4			38.6			40.8			39.3			40.8			44.8
Selling and marketing		36.4			35.8			36.5			36.1			37.9			41.8
General and administrative		12.6			13.0			12.4			12.5			11.3			13.1
Depreciation		2.0			2.5			2.0			2.5			2.2			2.0
Amortization of intangible assets		0.2			0.3			0.2			0.2			4.4			6.2
Reorganization costs		—			—			—			0.4
Income from operations		8.4			9.8			8.1			9.0
Other income, net		0.2			0.3			0.1			0.1
Losses on investments, net		(1.0	)		(1.5	)		(0.4	)		(0.5	)
Income before income taxes		7.6			8.6			7.8			8.6
Income tax provision		2.7			4.6			2.5			3.7
Net income		4.9	%		4.0	%		5.3	%		4.9	%
Acquisition and integration costs														2.7			2.9
Income (loss) from operations														0.7			(10.8	)
Interest expense														(1.4	)		(2.3	)
Other income (expense), net														0.2			(0.3	)
Gain (loss) on investments, net														—			—
Loss before income taxes														(0.5	)		(13.5	)
Income tax expense (benefit)														—			(0.3	)
Net loss														(0.5	%)		(13.2	%)

Three ~~and Nine~~ Months Ended ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019

Three Months Ended

Absolute

Percentage

September 30,

Increase

Increase

2017

2016

(Decrease)

(Decrease)

(dollars in millions)

Revenues

$
80.4

$
77.4

$
3.0

4
%
Revenues from research services

$
54.2

$
52.7

$
1.5

3
%
Revenues from advisory services and events

$
26.1

$
24.7

$
1.4

6
%
Revenues attributable to customers outside of the U.S.

$
19.2

$
17.4

$
1.8

10
%
Percentage of revenue attributable to customers
outside of the U.S.

24
%

22
%

2

9
%
Number of events

3

3

—

—

	Nine Months Ended						Absolute			Percentage			Three Months Ended						Absolute			Percentage
	September 30,						Increase			Increase			March 31,						Increase			Increase
	2017			2016			(Decrease)			(Decrease)			2020			2019			(Decrease)			(Decrease)
	(dollars in millions)												(dollars in millions)
Revenues	$	247.3		$	242.6		$	4.7			2	%	$	106.3		$	100.6		$	5.7			6	%
Revenues from research services	$	160.6		$	161.0		$	(0.4	)		—		$	72.8		$	68.6		$	4.2			6	%
Revenues from advisory services and events	$	86.7		$	81.7		$	5.0			6	%	$	33.5		$	32.0		$	1.5			5	%
Revenues attributable to customers outside of the U.S.	$	55.7		$	55.4		$	0.3			1	%	$	21.4		$	22.4		$	(1.0	)		(4	%)
Percentage of revenue attributable to customers outside of the U.S.		23	%		23	%		—			—			20	%		21	%		(1	)		(5	%)
Number of events		9			10			(1	)		(10	%)		—		2				(2	)		(100	%)

Total revenues increased ~~4% and 2%~~6% during the three ~~and nine~~ months ended ~~September 30, 2017 respectively,~~March 31, 2020 compared to the prior year ~~periods. After adjusting for~~period. Approximately 4% of the ~~effect~~growth was due to the fair value adjustment of ~~foreign currency fluctuations, the~~pre-acquisition deferred revenue ~~increase was 3%~~that reduced revenues during the three months ended ~~September 30, 2017 and remained at 2% for the nine months ended September 30, 2017.~~ March 31, 2019. Revenues from customers outside the U.S. increased 10% and 1% during the three and nine months ended September 30, 2017, respectively, compared to the prior year periods and increased 8% and 2%, respectively, after adjusting for the effects of foreign currency fluctuations. Revenues from customers outside of the U.S. represented 24% of total revenues for the three months ended September 30, 2017 and after adjusting for

the effect of foreign currency fluctuations, represented 23% of total revenues compared to 22% in the prior year period. The increase in the percentage of revenues attributable to customers outside of the U.S. decreased 4% during the three months ended ~~September 30, 2017~~March 31, 2020 which was ~~principally~~primarily due to ~~an increase~~a decrease in revenues in Canada and the Asia Pacific region. Revenues from customers outside of the U.S. represented 23% of total revenues during the nine months ended September 30, 2017 and remained essentially flat compared to the prior year period, reflecting growth in revenues in the Asia Pacific region that was offset by a decline in revenues in Europe. There was no material effect of foreign currency fluctuations on revenues from customers outside of the U.S. as a percent of total revenues during the nine months ended September 30, 2017.United Kingdom.

Research services revenues are recognized as revenue primarily on a ratable basis over the term of the contracts, which are generally twelve-month periods. Research services revenues increased 3%6% during the three months ended ~~September 30, 2017 and was essentially flat during the nine months ended September 30, 2017,~~March 31, 2020 compared to the prior year ~~periods. Currency fluctuations had~~period, which was primarily driven by growth in Research and Connect products. Approximately 5% of the ~~effect~~growth was due to the fair value adjustment of ~~increasing~~pre-acquisition deferred revenue ~~growth by 1% in~~that reduced revenues during the three months ended September 30, 2017 and had an insignificant effect in the nine months ended September 30, 2017. The increase in revenues for the three months ended September 30, 2017 was primarily driven by an increase in revenue for our Reprints and Connect products. During the nine months ended September 30, 2017, a decline in revenue for our Data products and a slight decline in revenue for our Research products was offset by an increase in revenue for our Reprints and Connect products. March 31, 2019.

Revenues from advisory services and events increased 6%5% during ~~both~~ the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 compared to the prior year ~~periods and increased 5% and 6%, respectively, after adjusting for the effect of foreign currency fluctuations. The increase in revenues for the three months ended September 30, 2017~~period, which was principally due to increases in both advisory and events revenues, that was partially offset by a slight decline in consulting revenues. The increase in revenues for the nine months ended September 30, 2017 was principally due to growth ~~in consulting and events~~of Consulting revenues. ~~Events revenues increased 158% and 14% during~~Approximately 1% of the ~~three and nine months ended September 30, 2017, respectively, compared~~growth was due to the ~~prior year periods. The increase in events~~fair value adjustment of pre-acquisition deferred revenue that reduced revenues during the three months ended September 30, 2017 was primarily due to revenue from a new event held in the U.S. during the current year period that exceeded the decline in revenue resulting from the discontinuation of a small event in the Asia Pacific region. The increase in events revenues during the nine months ended September 30, 2017 was due an increase in sponsorship revenues that offset having held one less event in the Asia Pacific region in the current year compared to the prior year.March 31, 2019.

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

Cost of services and fulfillment expenses ~~increased 9%~~decreased 4% during the three months ended ~~September 30, 2017~~March 31, 2020 compared to the prior year ~~period and after adjusting for the effect of foreign currency fluctuations, increased 8%.~~period. The ~~increase in dollars~~decrease was primarily due to ~~(1)~~ a ~~$1.4~~$2.6 million ~~increase~~decrease in compensation and benefit costs, resulting principally from a decrease in incentive bonuses due to the cost-reduction measures implemented as a result of the impact of the COVID-19 pandemic, partially offset by an increase in ~~employees~~headcount and merit increases, and a $0.6 million decrease in travel and entertainment expenses. These decreases were partially offset by a $1.6 million increase in professional services costs.

Selling and marketing expenses decreased 4% during the three months ended March 31, 2020 compared to the prior year ~~period and annual merit increases, (2) a $0.3 million increase in event expenses and (3) a $0.5 million increase in professional services costs.~~

Cost of services and fulfillment expenses increased 6% during the nine months ended September 30, 2017 compared to the prior year period and after adjusting for the effect of foreign currency fluctuations, increased 7%.period. The ~~increase in dollars~~decrease was primarily due to (1) a ~~$2.8~~$1.1 million ~~increase~~decrease in travel and entertainment expenses, and (2) a $0.7 million decrease in compensation and benefit costs, resulting principally from a decrease in incentive bonuses due to the cost-reduction measures implemented as a result of the impact of the COVID-19 pandemic, partially offset by an increase in ~~employees compared to the prior year period~~headcount and ~~annual~~ merit ~~increases, (2) a $1.0 million increase in event expenses~~increases.

General and ~~(3) a $0.7 million increase in professional services costs.~~Administrative

Nine Months Ended

Absolute

Percentage

September 30,

Increase

Increase

2017

2016

(Decrease)

(Decrease)

Selling and marketing expenses (dollars in millions)

$
90.4

$
87.5

$
2.9

3
%
Selling and marketing expenses as a percentage of total
revenues

36.5
%

36.1
%

0.4

1
%

	Three Months Ended						Absolute			Percentage
	March 31,						Increase			Increase
	2020			2019			(Decrease)			(Decrease)
General and administrative expenses (dollars in millions)	$	12.0		$	13.2		$	(1.2	)		(9	%)
General and administrative expenses as a percentage of total revenues		11.3	%		13.1	%		(1.8	)		(14	%)
General and administrative employees (at end of period)		237			247			(10	)		(4	%)

~~Selling~~General and ~~marketing~~administrative expenses ~~increased 5%~~decreased 9% during the three months ended ~~September 30, 2017~~March 31, 2020 compared to the prior year period. The ~~increase in dollars~~decrease was primarily due to a ~~$1.5~~$1.1 million ~~increase~~decrease in compensation and benefit costs, resulting principally from ~~an increase in sales employees, annual merit increases, and an increase~~a decrease in incentive bonuses due to the cost-reduction measures implemented as a result of the impact of the COVID-19 pandemic.

Depreciation expense increased by $0.4 million during the three months ended March 31, 2020 compared to the prior year period due to additional leasehold improvements being put into service.

Amortization expense decreased by $1.5 million during the three months ended March 31, 2020 compared to the prior year period due to certain technology intangible assets becoming fully amortized.

Acquisition and integration costs remained consistent during the three months ended March 31, 2020 compared to the prior year period. ~~There was no material effect~~We expect to incur integration costs in a range of ~~foreign currency fluctuations~~$3.5 million to $4.0 million for the year ending December 31, 2020.

Interest expense consists of interest on ~~selling and marketing expenses~~our borrowings used to finance the previous acquisition of SiriusDecisions. Interest expense decreased by $0.8 million during the three months ended ~~September 30, 2017.~~

Selling and marketing expenses increased 3% during the nine months ended September 30, 2017 compared to the prior year period and after adjusting for the effect of foreign currency fluctuations, increased 4%. The increase in dollars was primarily due to a $3.4 million increase in compensation and benefit costs, resulting from an increase in sales employees, annual merit increases, an increase in incentive bonuses and an increase in severance costsMarch 31, 2020 compared to the prior year period. This decrease was primarily due to lower average outstanding borrowings and lower effective interest rates.

Other income (expense), net primarily consists of gains (losses) on foreign currency and interest income. The increase ~~was partially offset by a $0.8~~in other income (expense), net of $0.6 million ~~decrease in travel and entertainment expenses primarily resulting from a reduction in expense for our annual sales conference.~~

~~Subject to the business environment, we expect our sales headcount to increase by 3% to 6% in 2017 as compared to the year ended December 31, 2016.~~

~~General and administrative expenses remained essentially flat~~ during the three months ended ~~September 30, 2017~~ March 31, 2020 compared to the prior year period was primarily due to a ~~$0.5 million~~ decrease in professional services expense that was offset by (1) a $0.3 million increase in stock compensation expense and (2) a $0.1 million increase in compensation and benefits costs. There was no material effect of foreign currency fluctuations on general and administrative expenses during the three months ended September 30, 2017.

General and administrative expenses increased 1% during the nine months ended September 30, 2017 compared to the prior year period and after adjusting for the effect of foreign currency fluctuations, increased 2%. The increase in dollars was primarily due to (1) a $0.8 million increase in compensation and benefit costs resulting from an increase in headcount and annual merit increases compared to the prior year period, (2) a $0.6 million increase in stock compensation costs and (3) a $0.2 million increase in hiring and relocation expense. These increases were partially offset by a $1.4 million decrease in professional services expense.

Depreciation expense decreased by $0.3 million and $1.2 million during the three and nine months ended September 30, 2017, respectively, compared to the prior year periods primarily due to certain equipment and software assets becoming fully depreciated.

~~Amortization expense remained essentially consistent during the three and nine months ended September 30, 2017 compared to the prior year periods.~~

During the nine months ended September 30, 2016, we incurred $1.0 million of severance and related benefits costs for a reduction in our workforce of approximately 2% of employees across various geographies and functions. All costs under this plan were paid during 2016.

Other income, net primarily consists of interest income on our investments as well as gains and losses on foreign currency. The decrease in other income, net of $0.1 million during the three months ended September 30, 2017 compared to the prior year period is primarily due to an increase in foreign currency losses. The decrease in other income, net of $0.1 million during the nine months ended September 30, 2017 compared to the prior year period is primarily due to an increase in foreign currency losses of $0.3 million that was partially offset by an increase in interest income of $0.2 million.

~~Losses~~Gain (loss) on investments, net primarily represents our share of equity method investment gains and losses from our technology-related investment funds. ~~The decrease in investment losses~~Gain (loss) on investments, net remained essentially consistent during the three ~~and nine~~ months ended ~~September 30, 2017 is primarily due to a decrease in investment losses incurred by the underlying funds as~~March 31, 2020 compared to the prior year ~~periods.~~period.

Income tax expense for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2020 was ~~$6.3 million~~$19 thousand resulting in an effective tax rate of ~~32.6%~~negative 3.8% for the ~~period. Income~~period due to discrete items for the period, primarily tax expense ~~for the nine months ended September 30, 2016 was $9.1 million resulting in an effective tax rate of 43.4% for the period. The decrease in the effective tax rate~~ ~~during the nine months ended September 30, 2017 compared~~related to the ~~prior year period was due primarily to the recognition~~exercise of ~~a $1.3 million benefit from the settlement of a tax audit in the first quarter of 2017~~stock options and the ~~recognition~~vesting of ~~approximately $0.3 million of windfall tax benefits from the settlement of options and~~ restricted stock units during the third quarter of 2017. In addition, in 2016 an additional $0.6 million of tax expense was incurred due to a valuation allowance on a capital loss generated from one of our investments.units. For the full year ~~2017,~~2020, we anticipate that our effective tax rate will be approximately ~~35%~~10% to 15%.

As of January 1, 2020, we realigned our internal management and reporting into Products and Research segments. The ~~Research~~realignment eliminated the SiriusDecisions segment as it no longer operated under a separate management structure. The 2019 amounts have been revised to conform to the current presentation.

The Products segment includes the revenues of the Connect, Analytics, and Events products and the costs of ~~our research personnel who are~~the organizations responsible for ~~writing the research~~developing and ~~performing the webinars and inquiries for our Research and Connect~~delivering these products. In addition, this segment includes Consulting revenues and the ~~research personnel deliver advisory services (such as workshops, speeches and advisory days) and a portion~~related cost of our project consulting ~~services. Revenue in this segment includes only~~organization. The project consulting organization delivers a majority of our project consulting revenue ~~from~~and certain advisory services ~~and project consulting services that are delivered by~~primarily related to the ~~research personnel in this segment.~~

The Research segment includes the revenues of the Research products and the cost of the organizations responsible for developing and delivering our Research products. In addition, this segment includes Consulting revenues primarily from the ~~costs~~delivery of ~~our Data, Connect and Events organizations. Revenue in this segment includes all of our revenue (including Research and Connect) except for revenue from~~ advisory services (such as workshops, speeches and ~~project consulting services that are~~advisory days) delivered by ~~personnel in the Research and Project Consulting segments.~~

~~The Project Consulting segment includes the costs of the consultants that deliver the majority of~~ our ~~project consulting services. Revenue in this segment includes the project consulting revenue delivered by the consultants in this segment.~~research analysts.

We evaluate reportable segment performance and allocate resources based on segment revenues and expenses. Segment expenses include the direct expenses of each segment organization and exclude selling and marketing expenses, ~~certain client support expenses,~~ general and administrative expenses, stock-based compensation expense, depreciation expense, adjustments to incentive bonus compensation from target amounts, amortization of intangible assets, ~~reorganization costs,~~interest and other ~~income,~~expense, and ~~losses~~gains (losses) on investments. The accounting policies used by the segments are the same as those used in the consolidated financial statements.

In the first quarter of 2017, we modified our internal reporting for the Research and Project Consulting segments to reflect the transfer of revenue and direct costs related to a small consulting team in Asia Pacific from Research to Project Consulting, and to remove from both Research and Project Consulting certain client support activities that are now included within selling, marketing, administrative and other expenses in the table below. Accordingly, the 2016 amounts have been reclassified to conform to the current presentation.

							Project						Products			Research			Consolidated
Three Months Ended March 31, 2020
Research services revenues
Research													$	—		$	53,606		$	53,606
Connect														13,889			—			13,889
Analytics														5,301			—			5,301
Total research services revenues														19,190			53,606			72,796
	Product			Research			Consulting			Consolidated
Three Months Ended September 30, 2017
Research services revenues	$	54,235		$	—		$	—		$	54,235
Advisory services and events revenues		3,353			10,379			12,402			26,134
Consulting														20,638			12,821			33,459
Events														90			—			90
Total advisory services and events revenues														20,728			12,821			33,549
Total segment revenues		57,588			10,379			12,402			80,369			39,918			66,427			106,345
Segment expenses		9,764			11,953			6,443			28,160			(19,378	)		(18,784	)		(38,162	)
Contribution margin (loss)		47,824			(1,574	)		5,959			52,209
Year over year revenue change		5	%		—			3	%		4	%		5	%		6	%		6	%
Year over year expense change		10	%		3	%		17	%		8	%		(3	%)		(8	%)		(5	%)

						Project				Products			Research			Consolidated
Three Months Ended March 31, 2019
Research services revenues
Research										$	—		$	49,780		$	49,780
Connect											13,571			—			13,571
Analytics											5,258			—			5,258
Total research services revenues											18,829			49,780			68,609
	Product		Research			Consulting		Consolidated
Three Months Ended September 30, 2016
Research services revenues	$	52,727	$	—		$	—	$	52,727
Advisory services and events revenues		2,333		10,330			12,037		24,700
Consulting											18,885			12,902			31,787
Events											253			—			253
Total advisory services and events revenues											19,138			12,902			32,040
Total segment revenues		55,060		10,330			12,037		77,427		37,967			62,682			100,649
Segment expenses		8,884		11,586			5,522		25,992		(19,948	)		(20,397	)		(40,345	)
Contribution margin (loss)		46,176		(1,256	)		6,515		51,435

Project

Product

Research

Consulting

Consolidated

Nine Months Ended September 30, 2017

Research services revenues

$
160,553

$
—

$
—

$
160,553

Advisory services and events revenues

15,714

32,279

38,750

86,743

Total segment revenues

176,267

32,279

38,750

247,296

Segment expenses

32,788

36,510

18,886

88,184

Contribution margin (loss)

143,479

(4,231
)

19,864

159,112

Year over year revenue change

1
%

(3
%)

13
%

2
%
Year over year expense change

8
%

1
%

8
%

5
%

Product segment revenues increased 5% ~~and 1%~~ during the three ~~and nine~~ months ended ~~September 30, 2017, respectively,~~March 31, 2020 compared to the prior year ~~periods. Research services~~period. Connect revenues increased 3~~% during~~2% driven by the ~~three months ended September 30, 2017 and remained essentially flat during~~executive program product while Analytics revenues increased 1%. Consulting revenues increased 9% driven by strong consultant delivery. Approximately 1% of the ~~nine months ended September 30, 2017 compared~~Product segment growth was due to the ~~prior year periods. The increase in research services revenues for the three months ended September 30, 2017 was principally driven by an increase in revenues for our Reprints and Connect products.~~ During the nine months ended September 30, 2017 a decline in revenues for our Data products and a slight decline in revenues for our Research products were offset by an increase in revenues for our Reprints and Connect products. Advisory services and events revenues, which is comprisedfair value adjustment of data consulting and events revenues in this segment, increased 44% and 11% during the three and nine months ended September 30, 2017, respectively, compared to the prior year periods. The increase in advisory services and eventspre-acquisition deferred revenue that reduced revenues during the three months ended ~~September 30, 2017~~March 31, 2019.

Product segment expenses decreased 3% during the three months ended March 31, 2020 compared to the prior year period. The decrease in expenses was primarily due to a ~~$0.4~~ (1) $1.5 million decrease in compensation and benefit costs due to a decrease in incentive bonuses due to the cost-reduction measures implemented as a result of the impact of the COVID-19 pandemic, partially offset by an increase in headcount and merit increases, (2) a $1.4 million increase in ~~data consulting revenues and a $0.7 million increase in Events revenues. The increase in Events revenues was~~professional services primarily due to ~~revenue from a new event held in the U.S. during the current year period that exceeded the decline in revenue resulting from the discontinuation of a small event in the Asia Pacific region. The~~an increase in survey costs and an increase in outsourced services related to revenue delivery, and (3) a $0.4 million decrease in travel and entertainment expenses.

Research segment revenues increased 6% for the three months ended March 31, 2020 compared to the prior year period. The Research product line increased 8% driven by our reprint product, which was offset by a 1% decrease in Consulting revenues due to lower delivery of advisory ~~services and events~~revenues. Approximately 5% of the Research segment growth was due to the fair value adjustment of pre-acquisition deferred revenue that reduced revenues during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019.

Research segment expenses decreased 8% during the three months ended March 31, 2020 compared to the prior year period. The decrease in expenses was primarily due to a ~~$0.8~~$1.5 million increase in data consulting revenues and a $1.0 million increase in Events revenues. The increase in Events revenues was due to an increase in sponsorship revenues that offset having held one less event in the Asia Pacific region in the current year compared to the prior year. Product segment expenses increased 10% and 8% during the three and nine months ended September 30, 2017, respectively, compared to the prior year periods primarily due to an increasedecrease in compensation and benefit costs due to a decrease in incentive bonuses due to the cost-reduction measures implemented as a result of the impact of the COVID-19 pandemic, partially offset by an increase in ~~employees~~headcount and ~~an increase in events expenses driven by increased attendance at the events.~~

Research segment revenues remained essentially flat during the three months ended September 30, 2017 and declined 3% during the nine months ended September 30, 2017, compared to the prior year periods. During the three months ended September 30, 2017 an increase in advisory revenues was essentially offset by a decrease in consulting revenues. The decline in revenues during the nine months ended September 30, 2017 was principally due to a decrease in consulting revenues that was partially offset by a slight increase in advisory revenues. Research segment expenses increased 3% and 1% during the three and nine months ended September 30, 2017, respectively, compared to the prior year periods. The increase in expenses during the three and nine months ended September 30, 2017 was primarily due to an increase in compensation and benefit costs of $0.5 million and $0.8 million, respectively, compared to the prior year periods.

Project Consulting segment revenues increased 3% and 13% during the three and nine months ended September 30, 2017, respectively, compared to the prior year periods due primarily to growth in our content marketing group, that was partially offset by a decline in revenue from our strategic consulting group. We expect revenue growth rates to be at a single digit level for the fourth quarter of the year. Project Consulting expenses increased 17% and 8% during the three and nine months ended September 30, 2017, respectively, compared to the prior year periods. The increase in expenses during the three months and nine months ended September 30, 2017 was primarily due to an increase in compensation and benefit costs of $0.5 million and $1.0 million, respectively, compared to the prior year periods.

We have historically financed our operations primarily through funds generated from operations. ~~Memberships for research~~Research services revenues, which constituted approximately ~~65%~~69% of our revenues during the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2020, are generally renewable annually and are typically payable in advance. We generated cash from operating activities of ~~$36.9~~$21.8 million and ~~$38.3~~$26.0 million during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2020 and ~~2016,~~2019, respectively. The ~~$1.4~~$4.2 million decrease in cash provided from operations for the ~~nine~~three months ended ~~September 30, 2017~~ March 31, 2020 was primarily attributable to a ~~$1.7~~$5.3 million ~~decrease~~reduction in cash generated from ~~working capital. The decrease in cash from working capital was primarily~~accounts receivable and deferred revenue due to ~~increases~~a reduction in cash used for income taxes and cash used for accounts payable that were partially offset by a decrease in the use of cash for accrued salary expense resulting from a change in the timing of payroll payments. We expect cash from operating activitiescontract bookings for the ~~full year 2017 to be in the range of $37.0 to $41.0 million.~~period.

During the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2020, we ~~generated $1.4 million of~~used cash ~~from~~in investing activities ~~consisting primarily~~ of ~~$7.0~~$2.4 million ~~in net proceeds from sales and maturities of marketable investments that was partially offset by $5.8 million of~~for purchases of property and ~~equipment. Property and~~ equipment, ~~purchases during 2017 consisted~~ primarily consisting of ~~computer equipment,~~ software and leasehold improvements ~~for our new office location in Nashville.~~. During the ~~nine~~three months ended ~~September 30, 2016,~~ March 31, 2019, we used ~~$18.9 million of~~ cash ~~from~~in investing activities of $241.7 million, consisting primarily of ~~$15.5~~$238.9 million infor the acquisition of SiriusDecisions, net ~~purchases~~ of ~~marketable investments~~cash acquired, and ~~$3.3~~$2.8 million ofin purchases of property and ~~equipment. Property and~~ equipment, ~~purchases during 2016 consisted~~consisting primarily of ~~computer equipment~~software and ~~software.~~leasehold improvements.

We used ~~$38.8~~$15.3 million of cash from financing activities during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2020 primarily due to ~~the use~~$16.3 million of ~~$40.0~~repayments of debt that consisted of $14.0 million ~~for purchases~~of discretionary payments on our revolving credit facility and $2.3 million of required repayments of our common stock and $10.2 million for the payment of dividends, at $0.19 per share in each of the first three quarters of 2017 as well as $2.5 million in taxes paid related to net share settlements of restricted stock units, which were partially offset by $13.9 million of proceeds from the exercise of stock options and our employee stock purchase plan.term loan. We ~~used $1.8~~generated $151.4 million of cash ~~from~~in financing activities during the ~~nine~~three months ended ~~September 30, 2016~~ March 31, 2019 primarily ~~for~~due to $171.3 million of borrowings, which reflects the ~~payment~~face value of ~~dividends totaling $9.7~~debt of $175.0 million ~~at $0.18 per share in each of~~less $3.7 million that was netted against the ~~first three quarters of 2016, as well as $2.1 million in taxes paid related~~proceeds to ~~net share settlements of restricted stock units, which~~pay debt issuance costs. This was partially offset by ~~$10.0~~$21.6 million of repayments of debt during the quarter that consisted of $20.0 million of discretionary payments on our revolving credit facility and $1.6 million of required repayments of our term loan. During 2020, we anticipate paying approximately $3.5 million of deferred acquisition purchase price (which consists of up to $2.5 million for a contingent consideration agreement (refer to Note 8 – Fair Value Measurements in the Notes to Consolidated Financial Statements) and $1.0 million of an indemnity holdback) for the FeedbackNow acquisition that occurred in 2018.

In connection with the acquisition of SiriusDecisions, we entered into a $200.0 million credit agreement on January 3, 2019 (the “Credit Agreement”). The Credit Agreement provides for: (1) senior secured term loans in an aggregate principal amount of $125.0 million (the “Term Loans”) and (2) a senior secured revolving credit facility in an aggregate principal amount of $75.0 million (the “Revolving Credit Facility”). We utilized the full $125.0 million of the Term Loans and $50.0 million of the Revolving Credit Facility to finance a portion of the acquisition of SiriusDecisions and to pay certain fees, costs and expenses incurred in connection with the Term Loans and Revolving Credit Facility. Additional information is provided in Note 4 – Debt in the Notes to Consolidated Financial Statements.

Borrowings under the Credit Agreement can be repaid early, in part or in whole, at any time and from time to time, without premium or penalty, other than customary breakage reimbursement requirements for the London Interbank Offering Rate (“LIBOR”) based loans. The Term Loans must be prepaid with net cash proceeds ~~from the exercise~~ of ~~stock options~~(i) certain debt incurred or issued by us and our ~~employee~~restricted subsidiaries and (ii) certain asset sales and condemnation or casualty events, subject to certain reinvestment rights.

Amounts borrowed under the Credit Agreement bear interest, at our option, at a rate per annum equal to either (i) LIBOR for the applicable interest period plus a margin that is between 1.75% and 2.50% based on our consolidated total leverage ratio or (ii) the alternate base rate plus a margin that is between 0.75% and 1.50% based on our consolidated total leverage ratio. In addition, we will pay a commitment fee that is between 0.25% and 0.35% per annum, based on our consolidated total leverage ratio, on the average daily unused portion of the Revolving Credit Facility, payable quarterly, in arrears. During 2019, we entered into an interest rate swap contract to effectively convert the floating base interest rate to a fixed rate on approximately 80% of the outstanding Term Loan principal balance. Additional information is provided in Note 7 – Derivatives and Hedging in the Notes to the Consolidated Financial Statements.

The Credit Agreement contains certain customary restrictive loan covenants, including among others, financial covenants that apply a maximum leverage ratio and minimum fixed charge coverage ratio. 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 Forrester, sell assets, pay dividends or other payments in respect to capital stock, ~~purchase plan.~~change fiscal year, or enter into certain transactions with affiliates and subsidiaries. The Credit Agreement also contains customary events of default, representations, and warranties.

As of ~~September 30, 2017~~March 31, 2020, we were in compliance with our ~~remaining stock repurchase authorization was approximately $20.1 million.~~financial covenants under the Credit Agreement. We ~~plan~~currently forecast that we will be in compliance with our financial covenants for at least one year from the issuance of these interim financial statements, after taking into consideration the cost cutting measures implemented during the first quarter of the year. If the impact of COVID-19 is more severe than currently forecasted this may impact our ability to ~~repurchase~~comply with our ~~common stock as market conditions warrant.~~financial covenants which could have a material adverse effect on our business.

As of ~~September 30, 2017,~~March 31, 2020, we had cash and cash equivalents of ~~$80.0 million and marketable investments of $54.0~~$69.8 million. ~~These balances include $61.6~~This balance includes $51.8 million held outside of the U.S. If ~~these funds~~the cash outside of the U.S. are 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 ~~do not currently have a line of credit and do not presently anticipate the need to access a line of credit in the foreseeable future except in the case of a significant acquisition. We~~ believe that our current cash balance ~~marketable investments,~~ and cash flows from operations will satisfy working capital, financing activities, and capital expenditure requirements for the next twelve months.

There ~~have~~has been noa material ~~changes~~change to the operating lease payments and purchase commitment lines of the contractual obligations table as disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2019. As of March 31, 2020, we have the following updated contractual obligations (in thousands):

Other than as noted above, the Contractual Obligations section in our Annual Report on Form 10-K for the year ended December 31, 2019 remains current in all material respects.

See Note 1 ~~and Note 10 of~~– 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 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, ~~2016.~~2019.

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 ~~September 30, 2017.~~March 31, 2020. 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.

~~There~~Except as noted below, there was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) ~~and 15d-15(f) under~~of the Exchange Act) that occurred during the quarter ended ~~September 30, 2017 that~~March 31, 2020, which has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

In response to COVID-19, we have undertaken measures to protect our employees, partners, and clients, including encouraging employees to work remotely. These changes have compelled us to modify some of our control procedures. However these changes have so far not been material.

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, ~~2016,~~2019, which could materially affect our business, financial condition or future results. The risk factors described in our Annual Report on Form 10-K remain applicable to our business. In addition, we are updating the risk factor included in our Annual Report on Form 10-K titled “We Face Risks Related to Health Epidemics That Could Adversely Impact Our Business” as follows.

We Face Risks Related to Health Epidemics That Could Adversely Impact Our Business. Our business has been and could continue to be adversely affected by the effects of a widespread outbreak of contagious disease, including the outbreak of respiratory illness caused by a novel coronavirus first identified in Wuhan, Hubei Province, China, or COVID-19. Any outbreak of contagious diseases, and other adverse public health developments, could have a material and adverse effect on our business operations. This could include disruptions or restrictions on the ability of our employees or our customers to travel and a slowdown in the global economy, which could adversely affect our ability to sell or fulfill, and a reduction in demand for, our products, services or events. Any disruption or delay of our customers or third-party service providers would likely impact our operating results. Due to COVID-19 materially impacting our business beginning only in the last month of the quarter, the impact on our business in the first quarter of 2020 is primarily limited to March customer contract bookings and the amount of consulting projects delivered. While the duration and severity of this pandemic is uncertain, we currently expect that its results of operations in the second quarter of 2020 will have the most significant impact of the effects of COVID-19, and that subsequent periods will also be negatively impacted. We typically generate a significant portion of our Events revenues in the second quarter of the year, including revenues from our two flagship events, the SiriusDecisions Summit and CX North America, both of which will be held as virtual events, resulting in significant reduction in revenues and profits from these two events. In addition, we cancelled two small events originally scheduled for the second quarter of the year. We also expect a reduction in our subscription Research, Connect and Analytics revenues and a reduction in Consulting revenues during the second quarter due to reduced customer contract booking activity in March, which is expected to continue through at least the second quarter of 2020. The extent to which the COVID-19 pandemic ultimately impacts our business, financial condition, results of operations, cash flows, and liquidity may differ from our current estimates due to inherent uncertainties regarding the duration and further spread of the outbreak, its severity, actions taken to contain the virus or treat its impact, and how quickly and to what extent normal economic and operating conditions can resume.

As of March 31, 2020, we were in compliance with our financial covenants under our Credit Agreement (see Note 4 – Debt in the Notes to Consolidated Financial Statements). We currently forecast that we will be in compliance with our financial covenants for at least one year from the issuance of these interim financial statements, after taking into consideration the measures noted above. If the impact of COVID-19 is more severe than currently forecasted this may impact our ability to comply with our financial covenants which could have a material adverse effect us.

The risks described in our Annual Report on Form 10-K and the updated risks within this Form 10-Q 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.

Through ~~September 30, 2017,~~March 31, 2020, our Board of Directors authorized an aggregate ~~$485.0~~$535.0 million to purchase common stock under our stock repurchase program. During the quarter ended ~~September 30, 2017,~~March 31, 2020, we ~~purchased the following~~did not purchase any shares of our common stock under the stock repurchase ~~program:~~program. As previously disclosed, subsequent to our acquisition of SiriusDecisions we anticipate continuing to substantially reduce or eliminate repurchases of our common stock during 2020.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

~~DELAWARE~~Delaware		04-2797789
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

60 Acorn Park Drive CAMBRIDGE, ~~MASSACHUSETTS~~Massachusetts		02140 (Zip Code)
(Address of principal executive offices)		~~(Zip Code)~~

Title of Each Class		Trading Symbol(s)		Name of Each Exchange on Which Registered
Common Stock, $.01 Par Value		FORR		Nasdaq Global Select Market

Large accelerated filer	☐	Accelerated filer	☒

Non-accelerated filer	☐ ~~(Do not check if a smaller reporting company)~~	Smaller reporting company	☐
Emerging growth company	☐

		~~PAGE~~Page
PART I	FINANCIAL INFORMATION
~~PART I. FINANCIAL INFORMATION~~Item 1.		4
~~ITEM 1.~~ Financial Statements (Unaudited)	3	4

Consolidated Balance Sheets as of ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016~~2019	3	4

Consolidated Statements of ~~Income~~Operations for the Three ~~and Nine~~ Months Ended ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019	4	5

Consolidated Statements of Comprehensive ~~Income~~Loss for the Three ~~and Nine~~ Months Ended ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019	5	6

Consolidated Statements of Cash Flows for the ~~Nine~~Three Months Ended ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019	6	7

Notes to Consolidated Financial Statements		8	7
Item 2.	~~ITEM 2.~~ Management’s Discussion and Analysis of Financial Condition and Results of Operations		17	21
Item 3.	~~ITEM 3.~~ Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	26Controls and Procedures	29

~~ITEM 4. Controls and Procedures~~PART II		26OTHER INFORMATION
~~PART II. OTHER INFORMATION~~Item 1A.		27
~~ITEM 1A.~~ Risk Factors		27	30
Item 2.	~~ITEM 2.~~ Unregistered Sales of Equity Securities and Use of Proceeds		27	30
Item 6.	~~ITEM 6.~~ Exhibits		28
			31

	Total Allowance
Balance at December 31, 2019	$	628
Cumulative effect adjustment of adopting Topic 326		218
Provision for expected credit losses		433
Net write-offs		(122	)
Translation adjustments		(13	)
Balance at March 31, 2020	$	1,144


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934.


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934.

	Three Months Ended March 31,
	2020		2019
Cash and cash equivalents	$	69,815	$	75,012
Restricted cash classified in (1):
Prepaid expenses and other current assets		787		208
Other assets		38		1,148
Cash, cash equivalents and restricted cash shown in statement of cash flows	$	70,640	$	76,368

	March 31, 2020
	Gross				Net
	Carrying		Accumulated		Carrying
	Amount		Amortization		Amount
Amortizable intangible assets:
Customer relationships	$	109,608	$	42,100	$	67,508
Technology		16,676		7,796		8,880
Backlog		13,000		8,125		4,875
Trademarks		12,453		1,061		11,392
Total	$	151,737	$	59,082	$	92,655

	December 31, 2019
	Gross				Net
	Carrying		Accumulated		Carrying
	Amount		Amortization		Amount
Amortizable intangible assets:
Customer relationships	$	109,825	$	40,169	$	69,656
Technology		16,661		7,051		9,610
Backlog		13,000		6,500		6,500
Trademarks		12,451		854		11,597
Total	$	151,937	$	54,574	$	97,363

2020 (remainder)	$	14,133
2021		12,344
2022		11,005
2023		10,830
2024		9,721
Thereafter		34,622
Total	$	92,655

2020 (remainder)	$	7,031
2021		12,500
2022		12,500
2023		15,625
2024		68,750
Total remaining principal payments	$	116,406

Description:	March 31, 2020			December 31, 2019
Term loan facility (1)	$	116,406		$	118,750
Revolving credit facility (2)		—			14,000
Principal amount outstanding (3)		116,406			132,750
Less: Deferred financing fees		(2,048	)		(2,205	)
Net carrying amount	$	114,358		$	130,545

2020 (remainder)	$	11,828
2021		14,022
2022		13,505
2023		12,974
2024		12,619
Thereafter		23,902
Total lease payments		88,850
Less imputed interest		(12,945	)
Present value of lease liabilities	$	75,905

Operating lease right-of-use assets	$	64,220

Short-term operating lease liabilities (1)	$	12,065
Non-current operating lease liabilities		63,840
Total operating lease liabilities	$	75,905

							Total
	Net Unrealized Gain			Cumulative			Accumulated
	(Loss) on Marketable			Translation			Other Comprehensive
	Investments			Adjustment			Income (Loss)
Balance at January 1, 2017	$	(83	)	$	(7,490	)	$	(7,573	)
Foreign currency translation		—			4,905			4,905
Unrealized gain on investments, net of tax of $29		47			—			47
Balance at September 30, 2017	$	(36	)	$	(2,585	)	$	(2,621	)

	As of September 30, 2017
			Gross		Gross
	Amortized		Unrealized		Unrealized			Market
	Cost		Gains		Losses			Value
Federal agency obligations	$	1,800	$	—	$	(4	)	$	1,796
Corporate obligations		52,277		7		(61	)		52,223
Total	$	54,077	$	7	$	(65	)	$	54,019

	As of December 31, 2016
			Gross		Gross
	Amortized		Unrealized		Unrealized			Market
	Cost		Gains		Losses			Value
Federal agency obligations	$	1,800	$	—	$	(7	)	$	1,793
Corporate obligations		59,481		2		(129	)		59,354
Total	$	61,281	$	2	$	(136	)	$	61,147

	FY 2017		FY 2018		FY 2019		Total
Federal agency obligations	$	—	$	1,796	$	—	$	1,796
Corporate obligations		4,000		28,559		19,664		52,223
Total	$	4,000	$	30,355	$	19,664	$	54,019

	As of September 30, 2017
	Less Than 12 Months				12 Months or Greater
	Market		Unrealized		Market		Unrealized
	Value		Losses		Value		Losses
Federal agency obligations	$	-	$	—	$	1,796	$	4
Corporate obligations		25,039		30		17,640		31
Total	$	25,039	$	30	$	19,436	$	35

	Contingent
	Consideration
Balance at December 31, 2019	$	(2,511	)
Fair value adjustment of contingent purchase price (1)		(11	)
Payment of contingent purchase price		—
Foreign exchange effect		(2	)
Balance at March 31, 2020	$	(2,524	)

				Weighted-
				Average
	Number of			Grant Date
	Shares			Fair Value
Unvested at December 31, 2019		656		$	42.94
Granted		15			37.15
Vested		(71	)		44.34
Forfeited		(48	)		43.71
Unvested at March 31, 2020		552		$	42.53

Contractual Obligations	Total		2020		2021		2022		2023		2024		Thereafter
Operating lease payments (1)	$	106,026	$	12,046	$	15,777	$	15,387	$	14,872	$	14,534	$	33,410
Purchase commitments (2)		8,372		6,632		870		870		—		—		—
	$	114,398	$	18,678	$	16,647	$	16,257	$	14,872	$	14,534	$	33,410

					Maximum Dollar
					Value that May
					Yet be Purchased
	Total Number of		Average Price		Under the Stock
Period	Shares Purchased (1)		Paid per Share		Repurchase Program
					(In thousands)
July 1 - July 30		32,065	$	39.69
August 1 - August 31		26,468	$	39.82
September 1 - September 30		30,359	$	40.01
		88,892			$	20,100

3.1		Restated Certificate of Incorporation of Forrester Research, Inc. (see Exhibit 3.1 to Registration Statement on Form S-1A filed on November 5, 1996)

3.2		Certificate of Amendment of the Certificate of Incorporation of Forrester Research, Inc. (see Exhibit 3.1 to Annual Report on Form 10-K for the year ended December 31, 1999)

3.3		Certificate of Amendment to Restated Certificate of Incorporation of Forrester Research, Inc.

3.4		Amended and Restated By-Laws of Forrester Research, Inc.

4.1		Specimen Certificate for shares of Common Stock, $.01 par value, of Forrester Research, Inc. (see Exhibit 4 to Registration Statement on Form S-1A filed on November 5, 1996)

31.1		Certification of the Principal Executive Officer. (filed herewith)

31.2		Certification of the Principal Financial Officer. (filed herewith)

32.1		Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (furnished herewith)

32.2		Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (furnished herewith)

101.INS		XBRL Instance Document. (filed herewith)

101.SCH		XBRL Taxonomy Extension Schema. (filed herewith)

101.CAL		XBRL Taxonomy Extension Calculation Linkbase. (filed herewith)

101.DEF		XBRL Taxonomy Extension Definition Linkbase. (filed herewith)

101.LAB		XBRL Taxonomy Extension Label Linkbase. (filed herewith)

101.PRE		XBRL Taxonomy Extension Presentation Linkbase. (filed herewith)

FORRESTER RESEARCH, INC.

By:		/s/ Michael A. Doyle
		Michael A. Doyle
		Chief Financial Officer (Principal financial officer)

~~Exhibit~~ ~~No.~~		~~Document~~

~~31.1~~		~~Certification of the Principal Executive Officer. (filed herewith)~~

~~31.2~~		~~Certification of the Principal Financial Officer. (filed herewith)~~

~~32.1~~		~~Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (furnished herewith)~~

~~32.2~~		~~Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (furnished herewith)~~

~~101.INS~~		~~XBRL Instance Document. (filed herewith)~~

~~101.SCH~~		~~XBRL Taxonomy Extension Schema. (filed herewith)~~

~~101.CAL~~		~~XBRL Taxonomy Extension Calculation Linkbase. (filed herewith)~~

~~101.DEF~~		~~XBRL Taxonomy Extension Definition Linkbase. (filed herewith)~~

~~101.LAB~~		~~XBRL Taxonomy Extension Label Linkbase. (filed herewith)~~

~~101.PRE~~		~~XBRL Taxonomy Extension Presentation Linkbase. (filed herewith)~~