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 May ~~7, 2018 17,984,000~~6, 2019, 18,437,000 shares of the registrant’s common stock were outstanding.

	March 31,			December 31,			March 31,			December 31,
	2018			2017			2019			2018
ASSETS
Current Assets:
Cash and cash equivalents	$	82,073		$	79,790		$	75,012		$	140,296
Marketable investments (Note 3)		54,258			54,333
Accounts receivable, net		62,154			70,023			69,122			67,318
Deferred commissions		14,722			13,731			17,254			15,677
Prepaid expenses and other current assets		18,641			18,942			16,299			12,802
Total current assets		231,848			236,819			177,687			236,093
Property and equipment, net		24,487			25,249			26,357			22,005
Operating lease right-of-use assets								71,529			—
Goodwill		76,900			76,169			242,543			85,165
Intangible assets, net		559			732			114,684			4,951
Other assets		6,942			6,231			7,578			5,310
Total assets	$	340,736		$	345,200		$	640,378		$	353,524
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable	$	353		$	217		$	1,209		$	588
Accrued expenses and other current liabilities		35,260			49,629			69,946			54,065
Current portion of long-term debt								7,031			—
Deferred revenue		155,425			145,207			191,612			135,332
Total current liabilities		191,038			195,053			269,798			189,985
Non-current liabilities		8,403			8,958
Long-term debt, net of deferred financing fees								143,728			—
Non-current operating lease liabilities								63,843			—
Other non-current liabilities								19,195			11,939
Total liabilities		199,441			204,011			496,564			201,924

Stockholders' Equity (Note 8):
Stockholders' Equity (Note 10):
Preferred stock, $0.01 par value
Authorized - 500 shares; issued and outstanding - none		—			—			—			—
Common stock, $0.01 par value
Authorized - 125,000 shares
Issued - 22,514 and 22,432 shares as of March 31, 2018 and December 31, 2017, respectively
Outstanding - 18,017 and 18,041 shares as of March 31, 2018 and December 31, 2017, respectively		225			224
Issued - 23,050 and 22,951 shares as of March 31, 2019 and December 31, 2018, respectively
Outstanding - 18,419 and 18,320 shares as of March 31, 2019 and December 31, 2018, respectively								231			230
Additional paid-in capital		186,335			181,910			206,655			200,696
Retained earnings		121,495			123,010			114,401			127,717
Treasury stock - 4,497 and 4,391 shares as of March 31, 2018 and December 31, 2017, respectively, at cost		(166,310	)		(161,943	)
Treasury stock - 4,631 shares as of March 31, 2019 and December 31, 2018, at cost								(171,889	)		(171,889	)
Accumulated other comprehensive loss		(450	)		(2,012	)		(5,584	)		(5,154	)
Total stockholders’ equity		141,295			141,189			143,814			151,600
Total liabilities and stockholders’ equity	$	340,736		$	345,200		$	640,378		$	353,524

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

	Three Months Ended						Three Months Ended
	March 31,						March 31,
	2018			2017			2019			2018
Revenues:
Research services	$	51,700		$	51,743		$	68,609		$	51,700
Advisory services and events		26,049			25,451			32,040			26,049
Total revenues		77,749			77,194			100,649			77,749
Operating expenses:
Cost of services and fulfillment		34,105			31,396			45,110			34,105
Selling and marketing		33,011			30,622			42,033			33,011
General and administrative		10,739			10,170			13,190			10,739
Depreciation		1,996			1,679			2,023			1,996
Amortization of intangible assets		186			191			6,210			186
Acquisition and integration costs								2,967			—
Total operating expenses		80,037			74,058			111,533			80,037
Income (loss) from operations		(2,288	)		3,136
Other income (expense), net		(118	)		9
Loss from operations								(10,884	)		(2,288	)
Interest expense								(2,352	)		—
Other expense, net								(270	)		(118	)
Losses on investments, net		(25	)		(203	)		(36	)		(25	)
Income (loss) before income taxes		(2,431	)		2,942
Loss before income taxes								(13,542	)		(2,431	)
Income tax benefit		(698	)		(88	)		(226	)		(698	)
Net income (loss)	$	(1,733	)	$	3,030
Basic income (loss) per common share	$	(0.10	)	$	0.17
Diluted income (loss) per common share	$	(0.10	)	$	0.16
Net loss							$	(13,316	)	$	(1,733	)
Basic loss per common share							$	(0.73	)	$	(0.10	)
Diluted loss per common share							$	(0.73	)	$	(0.10	)
Basic weighted average common shares outstanding		18,036			18,230			18,363			18,036
Diluted weighted average common shares outstanding		18,036			18,536			18,363			18,036
Cash dividends declared per common share	$	0.20		$	0.19		$	—		$	0.20

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

							Three Months Ended
	Three Months Ended March 31,						March 31,
	2018			2017			2019			2018
Cash flows from operating activities:
Net income (loss)	$	(1,733	)	$	3,030
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Net loss							$	(13,316	)	$	(1,733	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation		1,996			1,679			2,023			1,996
Amortization of intangible assets		186			191			6,210			186
Net losses from investments		25			203			36			25
Deferred income taxes		93			(257	)		(10,529	)		93
Stock-based compensation		1,963			2,049			2,685			1,963
Amortization of deferred financing fees								230			—
Amortization of premium on investments		25			61			—			25
Foreign currency losses		387			215			330			387
Changes in assets and liabilities
Changes in assets and liabilities, net of acquisitions:
Accounts receivable		7,921			3,839			19,239			7,921
Deferred commissions		(122	)		(235	)		(1,577	)		(122	)
Prepaid expenses and other current assets		(5,454	)		138			(1,945	)		(5,454	)
Operating lease right-of-use asset								3,225			—
Accounts payable		133			(1,485	)		902			133
Accrued expenses and other liabilities		(14,890	)		(11,512	)		(7,244	)		(14,890	)
Deferred revenue		17,275			21,538			29,108			17,275
Operating lease liabilities								(3,389	)		—
Net cash provided by operating activities		7,805			19,454			25,988			7,805
Cash flows from investing activities:
Acquisitions, net of cash acquired								(238,943	)		—
Purchases of property and equipment		(1,324	)		(1,540	)		(2,772	)		(1,324	)
Purchases of marketable investments		(11,604	)		(11,503	)		—			(11,604	)
Proceeds from sales and maturities of marketable investments		11,500			12,200			—			11,500
Other investing activity		—			184
Net cash used in investing activities		(1,428	)		(659	)		(241,715	)		(1,428	)
Cash flows from financing activities:
Proceeds from borrowings, net of costs								171,275			—
Payments on borrowings								(21,563	)		—
Payment of debt issuance costs								(857	)		—
Deferred acquisition payments								(766	)		—
Dividends paid on common stock		(3,611	)		(3,462	)		—			(3,611	)
Repurchases of common stock		(4,367	)		(21,453	)		—			(4,367	)
Proceeds from issuance of common stock under employee equity incentive plans		2,530			2,723			3,361			2,530
Taxes paid related to net share settlements of stock-based compensation awards		(66	)		(56	)		(89	)		(66	)
Net cash used in financing activities		(5,514	)		(22,248	)
Effect of exchange rate changes on cash and cash equivalents		1,420			671
Net increase (decrease) in cash and cash equivalents		2,283			(2,782	)
Cash and cash equivalents, beginning of period		79,790			76,958
Cash and cash equivalents, end of period	$	82,073		$	74,176


Net cash provided by (used in) financing activities								151,361			(5,514	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash								438			1,420
Net change in cash, cash equivalents and restricted cash								(63,928	)		2,283
Cash, cash equivalents and restricted cash, beginning of period								140,296			79,790
Cash, cash equivalents and restricted cash, end of period							$	76,368		$	82,073
Supplemental disclosure of cash flow information:
Cash paid for interest							$	1,948			—
Cash paid for income taxes	$	669		$	115		$	849		$	669

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 3 – Debt for further information.

Refer to Note 1 – Interim Consolidated Financial Statements for lease right of use assets obtained in exchange for operating lease obligations during the three months ended March 31, 2019.

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 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. 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, ~~2017.~~2018. 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)~~loss and cash flows as of the dates and for the periods presented have been included. The results of operations for the three months ended March 31, ~~2018~~2019 may not be indicative of the results for the year ending December 31, ~~2018,~~2019, or any other period.

The carrying amounts reflected in the Consolidated Balance Sheets for cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate fair value due to their short-term maturities. The Company believes that the carrying amount of its variable-rate borrowings reasonably approximate their fair values because the rates of interest on those borrowings reflect current market rates of interest. See Note 35 – ~~Marketable Investments -~~Fair Value Measurements, for the fair value of the Company’s ~~marketable investments.~~assets and liabilities.

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).

~~The Company adopted~~In February 2016, the ~~guidance in~~Financial Accounting Standards Board (FASB) issued Accounting Standards Update (“ASU”) No. ~~2016-15,~~2016-02, ~~Statement~~Leases (Topic 842). The standard requires lessees to recognize the assets and liabilities from leases on the balance sheet and disclose qualitative and quantitative information about the lease arrangements. Lessor accounting is largely unchanged. Leases are classified as either financing or operating, with classification affecting the pattern of ~~Cash Flows: Classification~~expense recognition in the income statement. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements, which allows for an additional adoption method and for lessors, provides a practical expedient for the separation of ~~Certain Cash Receipts~~lease and ~~Cash Payments,~~non-lease components within a contract.

On January 1, 2019, the Company adopted Topic 842 using the modified retrospective method in which prior periods are not adjusted. Under this method, the cumulative effect of applying the standard is recorded at the date of initial application. Adoption of the

standard did not result in the Company recording a cumulative effect adjustment. The standard resulted in the recognition of operating lease right-of-use assets of $53.3 million, operating lease liabilities of $60.8 million and the elimination of deferred rent of $7.5 million on the adoption date. In addition, the Company recorded $10.4 million of operating lease right-of-use assets and operating lease liabilities on January ~~1, 2018. The new standard clarifies certain aspects~~3, 2019 as a result of the ~~statement~~acquisition of ~~cash flows, including contingent consideration payments made after a business combination, proceeds from~~SiriusDecisions (see to Note 2 – Acquisitions). Adoption of the ~~settlement of insurance claims, and distributions received from equity method investees, among others. The adoption of this~~ standard did not have a material impact on the Company’s ~~statements~~results of operations or cash flows.

~~The Company adopted the guidance in ASU No. 2016-18,~~ ~~Statement of Cash Flows: Restricted Cash,~~ on January 1, 2018. The new standard requires restricted cash to be included with cash and cash equivalents when reconciling the beginning and ending amounts on the statement of cash flows. The adoption of this standard did not have an impact on the Company’s statements of cash flows.

The Company elected ~~to adopt~~ the ~~guidance in ASU No. 2018-02,~~ ~~Reclassification~~package of ~~Certain Tax Effects from Accumulated Other Comprehensive Income,~~ ~~on January 1, 2018. The~~practical expedients permitted under the new lease standard ~~allows but does not require, a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from~~that allowed the ~~Tax Cuts and Jobs Act (the “Act”) enacted on December 22, 2017. The Company elected to make the reclassification adjustment as~~carry forward of the beginning of the period of adoption in the amount of $26,000 using the aggregate portfolio approach. The reclassification amount includes the effect of the change in the U.S. federal corporate income tax rate on the gross deferred tax amounts at the date of enactment of the Act related to items remaining in accumulated other comprehensive income.

~~In May 2014, the Financial Accounting Standards Board (FASB) issued ASU No. 2014-09,~~ ~~Revenue from Contracts with Customers,~~ ~~and has since issued several additional amendments thereto (collectively known as ASC 606). ASC 606 supersedes~~historical lease classification for 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 amountleases that ~~reflects the consideration that the company expects to receive for those goods or services. ASC 606 also includes subtopic ASC 340-40,~~ ~~Other Assets and Deferred Costs-Contracts with Customers, which provides guidance on accounting for certain revenue related costs including costs associated with obtaining and fulfilling a contract.~~

On January 1, 2018, the Company adopted ASC 606 using the modified retrospective method. Under this method, the reported results for 2018 reflect the application of ASC 606, while the reported results for 2017 were prepared under the guidance of ASC 605, ~~Revenue Recognition, which is referred to herein as the “previous guidance”. The modified retrospective method requires the~~

~~cumulative effect of applying the new guidance to all contracts with customers that were not completed as of January 1, 2018 to be recorded as an adjustment to retained earnings~~existed as of the adoption date. ~~Forrester considered~~In addition, the Company elected to exempt short term leases from recognition of right of use assets and lease liabilities, and elected not to separate lease and non-lease components within its leases.

The Company determines whether an arrangement is a ~~contract~~lease at inception. The Company accounts for a lease when it has the right to ~~be complete if~~control the leased asset for a period of time while obtaining substantially all of the ~~revenue was~~assets’ economic benefits. 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.

Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. The discount rate used to determine the present value of the lease payments is the Company’s incremental borrowing rate based on the information available at lease inception, as an implicit rate is generally not readily determinable. An operating lease ROU asset includes all lease payments and excludes lease incentives and initial direct costs incurred. Some of the Company’s leases include options to extend or terminate the lease. When determining the lease term, these options are included in the measurement and recognition of the Company’s ROU assets and lease liabilities when it is reasonably certain that the Company will exercise the option. The Company considers several economic factors when making this determination, including but not limited to, the significance of leasehold improvements incurred in the office space, the difficulty in replacing the asset, underlying contractual obligations, or specific characteristics unique to a particular lease.

Lease expense for operating leases is recognized on a straight-line basis over the reasonably assured lease term based on the total lease payments (which include initial direct costs and lease incentives). The expense is included in operating expenses in the Consolidated Statements of Operations.

The Company’s lease agreements generally contain lease and non-lease components. Non-lease components are fixed charges stated in an agreement and primarily include payments for parking at the leased office space. The Company accounts for the lease and fixed payments for non-lease components as a single lease component under Topic 842, which increases the amount of the ROU assets and lease liabilities.

Most of the Company’s lease agreements also contain variable payments, primarily maintenance-related costs, which are expensed as incurred and not included in the measurement of the ROU assets and lease liabilities.

Leases with an initial term of 12 months or less are not recorded on the Consolidated Balance Sheets and are not material.

Additional information related to leases 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, 2019 are as follows (in thousands):

The Company’s leases do not contain residual value guarantees, material restrictions or covenants.

The Company accounts for business combinations in accordance with the ~~previous guidance that was in effect before~~acquisition method of accounting as prescribed by Accounting Standards Codification (“ASC”) 805, Business Combinations. The acquisition method of accounting requires the ~~adoption date.~~

~~The effect of adopting ASC 606 included a $7.8 million reduction in deferred revenue, primarily related~~Company to ~~prepaid performance obligations that are expected to expire in 2018~~record the assets and 2019 that would have been recognized in 2017 under the new guidance; a decrease of $5.5 million in prepaid expenses and other current assets related to deferred survey costs that would have been expensedliabilities acquired based on their estimated fair values as ~~incurred in 2017 under the new guidance and the current tax impact~~ of the ~~cumulative effect; an increase~~acquisition date, with any excess of ~~$0.9 million in deferred commissions related~~the consideration transferred over the estimated fair value of the net assets acquired, including identifiable intangible assets, to be recorded to goodwill.

On July 6, 2018, Forrester acquired 100% of the ~~capitalization~~issued and outstanding shares of ~~fringe benefits~~S.NOW SA, a Switzerland-based business that operates as ~~incremental costs~~FeedbackNow. FeedbackNow is a maker of physical buttons and monitoring software that companies deploy to ~~obtain~~measure, analyze, and improve customer ~~contracts under the new guidance; and an increase~~experience. The acquisition is part of ~~$0.6 million in other assets~~Forrester's plan to build a real-time CX cloud solution. FeedbackNow provides a high-volume input source for the ~~deferred tax effect of the cumulative effect. Retained earnings increased by $3.8~~real-time CX cloud solution. The Company paid $8.4 million ~~as a net result of these adjustments.~~

~~Refer to Note 5,~~ ~~Revenue and Contract Costs,~~ for additional disclosures and a discussion of the Company's updated policies related to revenue recognition, related balance sheet accounts, and accounting for costs to obtain and fulfill a customer contract.

~~The following tables summarize the effect of adopting ASC 606~~ on the ~~Company’s financial statements~~closing date. An additional $1.5 million is payable during a two-year period from the closing date and asis subject to typical indemnity provisions from the seller. The Company also paid additional purchase price based on the acquired working capital of $0.8 million during the three months ended March 31, ~~2018~~2019. In addition, the sellers may earn up to $4.2 million based on the financial performance of FeedbackNow during the two-year period following the closing date, with up to $1.7 million and $2.5 million payable during 2019 and 2020, respectively, if the financial targets are met. The range of undiscounted amounts that could be payable under this arrangement is zero to $4.2 million. The fair value of this contingent consideration arrangement as of the acquisition date was $3.4 million, which was recognized as purchase price.

There were no measurement period adjustments recorded during the three months ended March 31, 2019. The allocation of the purchase price for FeedbackNow is preliminary with respect to income taxes payable. The Company expects to obtain the remainder of the information to complete the allocation of purchase price during the second quarter of 2019.

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. Forrester believes that the combination of its expertise in strategy with SiriusDecisions’ focus on operational excellence will create additional market opportunities for the Company, including cross-selling services to the 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 ASC 805.

Pursuant to the terms of the merger agreement, the Company paid $247.3 million at closing, which is subject to adjustment, and included the purchase price of $245.0 million plus an estimate of cash acquired and reduced by an estimate of certain working capital items. Net cash paid, which accounts for cash acquired of $7.9 million and a subsequent $0.5 million reduction in cash paid for transaction-related expenses, was $238.9 million and is reflected as an investing activity in the Consolidated Statements of Cash Flows. The Company expects to determine the working capital adjustment during the second quarter of 2019. At the time of the merger, each vested SiriusDecisions stock option was converted into the right to receive the excess of the per share merger consideration over the exercise price of such stock option. All unvested SiriusDecisions stock options were cancelled without payment of any consideration.

The following table summarizes the preliminary allocation of the purchase price to the fair value of the assets acquired and liabilities assumed for the acquisition of SiriusDecisions (in thousands):

Consolidated Balance Sheet

As of March 31, 2018

Amounts as

if Previous

Guidance in

As Reported

Effect

Accounts receivable, net
$
62,154

$
67,826

Deferred commissions

14,722

13,791

Prepaid expenses and other current assets

18,641

23,427

Total current assets

231,848

241,375

Other assets

6,942

6,380

Total assets

340,736

349,702

Deferred revenue
$
155,425

$
166,669

Total current liabilities

191,038

202,282

Total liabilities

199,441

210,685

Retained earnings

121,495

119,217

Total stockholders’ equity

141,295

139,017

Total liabilities and stockholders’ equity

340,736

349,702

Assets:
Cash and cash equivalents	$	7,858
Accounts receivable		18,981
Prepaids and other current assets		3,786
Fixed assets		4,169
Goodwill (1)		157,808
Acquired intangible assets (2)		116,000
Other assets		265
Total assets		308,867
Liabilities:
Accounts payable and accrued liabilities		9,251
Deferred revenue		26,244
Deferred tax liability		24,460
Long-term deferred revenue		1,037
Other long-term liabilities		1,073
Total liabilities		62,065
Net assets acquired	$	246,802

~~Total assets were $9.0 million less than if~~The allocation of the ~~previous guidance remained in effect, largely due~~purchase price for SiriusDecisions is preliminary with respect to the ~~following changes required~~valuation of acquired intangible assets, working capital and goodwill. The Company expects to obtain the remainder of the information to complete the allocation of purchase price by the ~~adoption~~end of ~~ASC 606:~~2019.

~~Deferred revenue was $11.2 million less due to the accelerated recognition of revenue for estimated unexercised rights, which~~Company’s operating results would have been ~~deferred under~~materially different, and as a result the ~~previous guidance until~~following unaudited pro forma financial information is presented as if SiriusDecisions had been acquired by the ~~right expired, and the exclusion of invoices issued~~Company on ~~cancellable contracts in excess of revenue recognized.~~January 1, 2018 (in thousands, except per share amounts):

Consolidated Statement of Income (Loss)

Three Months Ended March 31, 2018

Amounts as

if Previous

Guidance in

As Reported

Effect

Revenues:

Research services
$
51,700

$
53,387

Advisory services and events

26,049

26,618

Total revenues

77,749

80,005

Operating expenses:

Cost of services and fulfillment

34,105

34,090

Selling and marketing

33,011

33,073

Total operating expenses

80,037

80,084

Income from operations

(2,288
)

(79
)
Income before income taxes

(2,431
)

(222
)
Income tax provision

(698
)

(13
)
Net loss

(1,733
)

(209
)
Basic loss per common share
$
(0.10
)

$
(0.01
)
Diluted loss per common share
$
(0.10
)

$
(0.01
)

	Three Months Ended
	March 31,
	2019			2018
Pro forma total revenue	$	104,488		$	93,371
Pro forma net loss	$	(9,090	)	$	(10,451	)

The ~~$2.3 million reduction to total revenues is~~pro forma results have been prepared in accordance with U.S. GAAP and include the following pro forma adjustments for the three months ended March 31, 2018: (1) an increase in interest expense and amortization of debt issuance costs related to ~~ASC 606’s requirement~~the financing of the SiriusDecisions acquisition (refer to ~~recognize revenue~~Note 3 – Debt for estimated future unexercised customer rights rather than recognize unexercised rights when they occur. The Company currently expects this change to primarily affect the timing of revenue within the quarters of 2018 but does not expect it to have a material effectfurther information on the Company’s ~~results~~borrowings related to the acquisition); (2) a decrease in revenue as a result of ~~operations~~the preliminary purchase price allocation for deferred revenue; (3) an adjustment for depreciation and amortization expenses as a result of the preliminary purchase price allocation for finite-lived intangible assets and property, and equipment; and (4) an increase in operating costs to recognize acquisition costs incurred upon the close of the acquisition.

For the three months ended March 31, 2019, goodwill increased by $157.4 million with $157.8 million of the increase attributable to the acquisition of SiriusDecisions and a $0.4 million decrease due to foreign currency fluctuations.

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.

In connection with the acquisition of SiriusDecisions, the Company entered into a $200.0 million Credit Agreement on January 3, 2019 (the “Closing Date”). 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” and, together with the Term Loans, the “Facilities”). 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 Facilities. The Facilities are scheduled to mature on January 3, 2024.

The Facilities permit 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 Facilities 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 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 Facilities bear interest, at Forrester’s option, at a rate per annum equal to either (i) the London Interbank Offering Rate (“LIBOR”) for the ~~full year~~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 will pay a commitment fee equal to 0.35% per annum on the average daily unused portion of ~~2018.~~the Revolving Credit Facility, payable quarterly, in arrears. The ~~net impact, including the tax effect, of accounting for revenue under the new guidance increased net loss and net loss per share by $1.5 million and $0.09, respectively.~~commitment fee may decrease to 0.30% or 0.25% based on Forrester’s consolidated total leverage ratio.

The ~~impact~~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 ~~comprehensive loss~~customary exceptions. The amount payable in each year as of March 31, 2019 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 ~~cash flows from operating activities~~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.

Forrester incurred $1.8 million in costs related to the Revolving Credit Facility which are ~~driven~~recorded in other assets on the Consolidated Balance Sheets. These costs are being amortized as interest expense 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 utilizing the effective interest rate method.

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

The Facilities contain 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, 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 first covenant reporting period was March 31, 2019 and the Company was in full compliance. The Facilities also contain customary events of default, representations, and warranties.

All obligations under the Facilities are unconditionally guaranteed by each of the ~~consolidated balance sheet~~Company’s existing and ~~income statement changes previously discussed.~~

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).

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

Total

Net Unrealized

Cumulative

Accumulated

Loss on Marketable

Translation

Other Comprehensive

Investments

Adjustment

Loss

Balance at January 1, 2018

$
(115
)

$
(1,897
)

$
(2,012
)
Reclassification of stranded tax effects from tax reform

(26
)

—

(26
)
Foreign currency translation

—

1,703

1,703

Unrealized loss on investments, net of tax of $(38)

(115
)

—

(115
)
Balance at March 31, 2018

$
(256
)

$
(194
)

$
(450
)

				Total
	Cumulative			Accumulated
	Translation			Other Comprehensive
	Adjustment			Loss
Balance at January 1, 2019	$	(5,154	)	$	(5,154	)
Foreign currency translation		(430	)		(430	)
Balance at March 31, 2019	$	(5,584	)	$	(5,584	)

Total

Net Unrealized

Cumulative

Accumulated

Loss on Marketable

Translation

Other Comprehensive

Investments

Adjustment

Loss

Balance at January 1, 2017

$
(83
)

$
(7,490
)

$
(7,573
)
Foreign currency translation

—

790

790

Unrealized gain on investments, net of tax of $11

17

—

17

Balance at March 31, 2017

$
(66
)

$
(6,700
)

$
(6,766
)

							Total
	Net Unrealized			Cumulative			Accumulated
	Loss on Marketable			Translation			Other Comprehensive
	Investments			Adjustment			Loss
Balance at January 1, 2018	$	(115	)	$	(1,897	)	$	(2,012	)
Reclassification of stranded tax effects from tax reform		(26	)		—			(26	)
Foreign currency translation		—			1,703			1,703
Unrealized loss on investments, net of tax of $(38)		(115	)		—			(115	)
Balance at March 31, 2018	$	(256	)	$	(194	)	$	(450	)

~~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 and losses on the sale of the Company’s marketable investments were not material in the three months ended March 31, 2018 and 2017.

~~The following table summarizes the maturity periods of the marketable investments in the Company’s portfolio as of March 31, 2018 (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 and available-for-sale securities. 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.

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.

During the three months ended March 31, 2019 and March 31, 2018, the Company did not transfer assets or liabilities between levels of the fair value hierarchy. 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 March 31, 2018

Level 1

Level 2

Level 3

Total

Money market funds (1)

$
851

$
—

$
—

$
851

Federal agency obligations

—

1,794

—

1,794

Corporate obligations

—

52,464

—

52,464

Total

$
851

$
54,258

$
—

$
55,109

	As of March 31, 2019
	Level 1		Level 2		Level 3			Total
Assets:
Money market funds (1)	$	7,177	$	—	$	—		$	7,177
Total Assets:	$	7,177	$	—	$	—		$	7,177

Liabilities
Contingent purchase price (2)	$	—	$	—	$	(4,059	)	$	(4,059	)
Total Liabilities:	$	—	$	—	$	(4,059	)	$	(4,059	)

Level ~~2 assets~~3 liabilities at March 31, 2019 consist entirely of the ~~Company’s entire portfolio~~contingent purchase price related to the acquisition of ~~marketable investments.~~FeedbackNow. Changes in the fair value of Level ~~2 assets have been initially valued at~~3 contingent consideration for 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 basedthree months ended March 31, 2019 were as follows (in thousands):

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 March 31, ~~2018~~2019 and December 31, ~~2017,~~2018, the carrying value of the Company’s non-marketable investments, which were composed of interests in technology-related private equity funds, was ~~$1.8~~$2.4 million and ~~$1.9~~$2.5 million, respectively, and is included in other assets in the Consolidated Balance Sheets.

The Company’s non-marketable investments at March 31, ~~2018~~2019 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 immaterial during the three months ended March 31, ~~2018~~2019 and ~~were $0.2 million during~~March 31, 2018. Losses are included in losses on investments, net in the Consolidated Statements of Operations. During the three months ended March 31, ~~2017. Losses are included in Losses on Investments, Net in the Consolidated Statements of Income (Loss). During the three months ended~~2019 and March 31, 2018, no distributions were received from the funds. ~~During the three months ended March 31, 2017, $0.4 million of distributions were received from the funds.~~

The Company adopted ASC 606 on January 1, 2018 using the modified retrospective approach, which applies to all contracts not complete as of the date of adoption. Under ASC 606, the Company recognizes revenue when a customer obtains control of promised goods or services, in an amount that reflects the consideration expected to be received in exchange for those goods or services. The Company follows the five step model prescribed under ASC 606: (i) identify contract(s) with a customer; (ii) identify the performance obligation(s) in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies the performance obligation. Revenues are presented net of any sales or value added taxes collected from customers and remitted to the government.

The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration expected to be transferred to the customer is probable. The Company applies judgment in determining the customer’s ability and intention to pay for services expected to be transferred, which is based on factors including the customer’s payment history, management’s ability to mitigate exposure to credit risk (for example, requiring payment in advance of the transfer of goods or services, or the ability to stop transferring promised goods or services in the event a customer fails to pay consideration when due) and experience selling to similarly situated customers.

Performance obligations within a contract are identified based on the goods and services promised to be transferred in the contract. When a contract includes more than one promised good or service, the Company must apply judgment to determine whether the promises represent multiple performance obligations or a single, combined performance obligation. This evaluation requires the Company to determine if the promises are both capable of being distinct, where the customer can benefit from the good or service on its own or together with other resources readily available, and are distinct within the context of the contract, where the transfer of goods or services is separately identifiable from other promises in the contract. When both criteria are met, each promised good or service is accounted for as a separate performance obligation. In cases where the promises are distinct, the Company is further required to evaluate if the promises are a series of goods and services that are substantially the same and have the same pattern of transfer to the customer (referred to as the “series” guidance). When the Company determines that promises meet the series guidance, they are accounted for as a single, combined performance obligation. The number of performance obligations in the Company’s arrangements is not different under ASC 606 than the number of separate units of accounting under pervious guidance, as discussed further below.

Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation on a relative basis according to their standalone selling prices. The Company continues to determine standalone selling price based on the price at which the performance obligation is sold separately. If the Company does not have a history of selling a performance obligation, management applies judgment to estimate the standalone selling price, taking into consideration available information, including market conditions, factors considered to set list price, pricing of similar products, and internal pricing objectives. The corresponding allocated revenues are recognized as the performance obligations are satisfied, as discussed below.

Research services revenues consist primarily of memberships to Research, Connect, and Analytics products. The majority of the Research revenues are annual subscriptions to our research, including access to all or a designated portion of our research and, depending on the type of license, unlimited phone or email analyst inquiry and unlimited participation in Forrester webinars, all of which are delivered throughout the contract period. The Company has concluded that the promises represent a stand ready obligation to provide a daily information service, in which the services are the same each day, every day is distinct, and the customer simultaneously receives and consumes the benefits as the Company transfers control throughout the contract period. Accordingly, these subscriptions meet the requirements of the series guidance and are each accounted for as a single performance obligation. The Company recognizes revenue ratably over time, using an output measure of time elapsed. Research revenues also include sales of electronic reprints, which are written research documents prepared by Forrester’s analysts and hosted via an on-line platform. Reprints include a promise to deliver a customer-selected research document and certain usage data provided through the on-line platform, which represents two performance obligation. The Company satisfies the performance obligation for the research document by providing access to the electronic reprint and accordingly recognizes revenue at that point in time. The Company satisfies the performance obligation for the data portion of the reprint on a daily basis and accordingly recognizes revenue over time.

The majority of the Connect revenues are the Company’s Leadership Board product which includes access to the Research offering, access to a private forum with other Leadership Board member peers, access to a Forrester advisor, member-generated content, and one Event ticket. The Company has concluded that all promises, other than the Event ticket, represent a stand ready obligation to provide a daily information and peer service, in which the services are the same each day, every day is distinct, and the customer simultaneously receives and consumes the benefits as the Company transfers control throughout the contract period. Accordingly, these promises meet the requirements of the series guidance and are accounted for as a single performance obligation. The Company recognizes revenue ratably over time, using an output measure of time elapsed. The Event ticket is accounted for as a separate performance obligation and is recognized when the Event occurs.

Analytics revenues are annual subscriptions to access designated survey data products and typically include a data advisor, all of which are delivered throughout the contract period. For Analytics subscriptions, the Company has concluded that the promises represent a stand ready obligation to provide a daily data service, in which the services are the same each day, every day is distinct and the customer simultaneously receives and consumes the benefits as the Company transfers control throughout the contract period. Accordingly, these subscriptions meet the requirements of the series guidance and are accounted for as a single performance obligation. The Company recognizes revenue ratably over time, using an output measure of time elapsed. Certain of the Analytics products include advisory services which are accounted for as a separate performance obligation and are recognized at the point in time the session is completed or the final deliverable is transferred to the customer.

~~Advisory services and events revenues consists of sales of advisory services, consulting projects, and Events.~~

Advisory services revenues are short-term presentations or knowledge sharing sessions (which can range from one hour to two days), such as workshops, speeches and advisory days. Each is a promise for a Forrester analyst to deliver a deeper understanding of Forrester’s published research and represents a single performance obligation. Revenue is recognized at the point in time the session is completed or the final deliverable is transferred to the customer.

Consulting project revenues consists of the delivery of focused insights and recommendations that assist customers with their challenges in developing and executing strategies around technology, customer experience and digital transformation. Projects are fixed-fee arrangements that are generally completed within two weeks to three months. The Company concluded that each project represents a single performance obligation as they are a single promise to deliver a customized engagement and deliverable. For the majority of these services, either practically or contractually, the work performed and delivered to the customer has no alternative use to the Company. Additionally, Forrester maintains an enforceable right to payment at all times throughout the contract. The Company utilizes an input method and recognizes revenue over time, based on hours expended relative to the total estimated hours required to satisfy the performance obligation. This input method was chosen since it closely aligns with how control of interim deliverables is transferred to the customer throughout the engagement and is also the method used internally to price the project and assess operational performance. If the Company were to enter into an agreement where it does not have an enforceable right to payment at all times, revenue would be recognized at the point in time the project is completed.

Events revenues consist of either ticket or sponsorship sales for a Forrester-hosted event. Each is a single promise that either allows entry to, or grants the right to promote a product or service at, a specific event. The Company concluded that each of these represents a single performance obligation. The Company recognizes revenue at the completion of the Event, which is the point in time when the customer has received the benefit(s) from attending or sponsoring the Event.

Prepaid performance obligations, including Event tickets, reprints, advisory and consulting hours, on non-cancellable contracts that the Company estimates will expire unused are recognized in proportion to the pattern of related rights exercised by the customer. This assessment requires significant judgment, including estimating the percentage of prepaid rights that will go unexercised and anticipating the impact that future changes to products, pricing and customer engagement will have on actual expirations. The Company periodically updates the rates used to recognize unexercised rights.

~~Refer to Note 9,~~ ~~Operating Segments, for a summary of disaggregated revenue by product category and business segment.~~

The Company considers a contract modification to exist when a mutually agreed upon change creates new, or updates existing, enforceable rights and obligations. ASC 606 introduced three specific methods to account for contract modifications depending on the nature of the change(s) in scope or price to the original contract. The new guidance is consistent with how the Company has historically accounted for contract modifications and as a result, will not have an impact on the Company’s results of operations.

The majority of the Company’s contract modifications result in additional or remaining distinct goods and services, and are treated on a prospective basis. Under the prospective method, the transaction price is updated to combine the unrecognized amount as of the modification date plus the additional transaction price from the modification. This amount is then re-allocated to the remaining distinct performance obligations and recognized accordingly.

Consulting services contracts can be modified to update the scope of the services purchased. Since a consulting project is a single performance obligation that is only partially satisfied at the modification date, the updated project requirements are not distinct and the modification is accounted for as part of the existing contract. The effect of the modification on the transaction price and the Company’s measure of progress for the performance obligation to which is relates, is recognized as an adjustment to revenue (either an increase or decrease) on a cumulative catch-up basis. For the three months ended March 31, 2018, the Company recorded an immaterial amount of cumulative catch-up adjustments.

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, 2019 or 2018.

The majority of the Company’s contracts are non-cancellable. However, for contracts that are cancellable by the customer, thethe 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 ~~goods~~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.~~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.

During the three months ended March 31, ~~2018,~~2019, the Company recognized approximately ~~$58~~$58.1 million of revenue related to its deferred revenue balance at January 1, 2019. During the three months ended March 31, 2018, the Company recognized approximately $58.0 million of revenue related to its deferred revenue balance at January 1, 2018. ~~In order to~~To determine revenue recognized in the current 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 ~~exceeds~~equals that balance.

Approximately ~~$254~~$357.9 million of revenue is expected to be recognized during the next 12 to 24 months from remaining performance obligations as of March 31, ~~2018.~~

The Company capitalizes commissions paid to internal sales representatives and related fringe benefits costs that are incremental to obtaining customer ~~contracts.~~contracts. These costs are included in deferred commissions on the ~~consolidated balance sheets. The judgments made in determining the amount of costs incurred include the types of costs to capitalize and whether or not the costs are in fact incremental.~~Consolidated Balance Sheets. The Company ~~elected the practical expedient to account~~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 $7.2 million and $7.1 million for the three months ended March 31, 2019 and March 31, 2018, respectively. The Company evaluates the recoverability of deferred commissions at each balance sheet date.

Costs to fulfill the Company’s contracts, such as our survey costs for our Analytics product line, do not meet the specified capitalization criteria as defined in the guidance and as such are expensed as incurred.

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 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 recorded a $0.6 million discrete tax expense during the three months ended March 31, 2019 due to the settlement of a U.S. Competent Authority claim during the period. The Company anticipates that its effective tax rate for the full year 2019 will be approximately 5% due to a projected pretax loss for the year. Income tax benefit for the three months ended March 31, 2018 was $0.7 million resulting in an effective tax rate of 28.7% for the period. ~~Income~~

In July 2015, the U.S. Tax Court issued an opinion in Altera Corp. v. Commissioner related to the treatment of stock-based compensation expense in an intercompany cost-sharing arrangement. The opinion invalidated part of a treasury regulation requiring stock-based compensation to be included in any qualified intercompany cost-sharing arrangement. The Company previously recorded a tax benefit based on the opinion in the case. Currently the U.S. Court of Appeals for the ~~three months ended March 31, 2017 was $0.1 million resulting in an effective tax rate of (3.0)% for~~Ninth Circuit is reviewing the ~~period.~~case and a final decision is yet to be issued. The ~~increase in the effective tax rate~~ ~~during the three months ended March 31, 2018 compared~~Company will continue to ~~the prior year period was primarily due~~monitor ongoing developments and potential impacts to ~~the recognition of a $1.3 million benefit from the settlement of a tax audit in the first quarter of 2017. For the full year 2018, the Company anticipates that~~ its ~~effective tax rate will be approximately 31%.~~consolidated financial statements.

On December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was signed into law making significant changes to the Internal Revenue Code. We calculated our best estimate of the impact of the Act in our prior year end income tax provision in accordance with our understanding of the Act and guidance available at that date. On December 22, 2017, Staff Accounting Bulletin No. 118 ("SAB 118") was issued to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Act. SAB 118 provide~~s a m~~easurement period tha~~t shou~~ld not extend be~~yon~~d one year from the enactment date ~~of the Act~~ for companies to complete the ~~accoun~~ting ~~for the income tax effects of the Act. Any subsequent adjustment to these provisional amounts will be recorded to current tax expense in the quarter of 2018 when the analysis is complete.~~ As ~~the Company~~ comple~~tes~~ ~~its~~analysis of the Act~~, and~~ collects and prepares n~~ece~~ssary data, and interprets any add~~iti~~onal guidance issued by the U.S. Treasury Department, the IRS, and othe~~r s~~tandard-se~~tti~~ng ~~bod~~ies, ~~the Company~~ ma~~y m~~ake adjustments to the provisional am~~oun~~t~~s. No adjustments to the provisional amounts were recognized during the three months ended March 31, 2018.~~

Basic net ~~income (loss)~~loss per common share is computed by dividing net ~~income (loss)~~loss by the basic weighted average number of common shares outstanding during the period. Diluted net ~~income (loss)~~loss per common share is computed by dividing net ~~income (loss)~~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.

															Accumulated
	Common Stock				Additional					Treasury Stock					Other
	Number of		$0.01 Par		Paid-in		Retained			Number of					Comprehensive			Total
	Shares		Value		Capital		Earnings			Shares		Cost			Income (Loss)			Equity
Balance at January 1, 2019		22,951	$	230	$	200,696	$	127,717			4,631	$	(171,889	)	$	(5,154	)	$	151,600
Issuance of common stock under stock plans		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

															Accumulated
	Common Stock				Additional					Treasury Stock					Other
	Number of		$0.01 Par		Paid-in		Retained			Number of					Comprehensive			Total
	Shares		Value		Capital		Earnings			Shares		Cost			Income (Loss)			Equity
Balance at January 1, 2018		22,432	$	224	$	181,910	$	123,010			4,391	$	(161,943	)	$	(2,012	)	$	141,189
Issuance of common stock under stock plans		82		1		2,462		—			—		—			—			2,463
Cumulative effect adjustment due to adoption of new accounting pronouncements		—		—		—		3,829			—		—			(26	)		3,803
Stock-based compensation expense		—		—		1,963		—			—		—			—			1,963
Repurchases of common stock		—		—		—		—			106		(4,367	)		—			(4,367	)
Dividends paid on common shares		—		—		—		(3,611	)		—		—			—			(3,611	)
Net loss		—		—		—		(1,733	)		—		—			—			(1,733	)
Net change in marketable investments, net of tax		—		—		—		—			—		—			(115	)		(115	)
Foreign currency translation		—		—		—		—			—		—			1,703			1,703
Balance at March 31, 2018		22,514	$	225	$	186,335	$	121,495			4,497	$	(166,310	)	$	(450	)	$	141,295

Restricted stock unit activity for the three months ended March 31, ~~2018~~2019 is presented below (in thousands, except per share data):

Stock option activity for the three months ended March 31, ~~2018~~2019 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, 2017

937

$
35.10

Granted

—

—

Exercised

(50
)

33.31

Forfeited

(12
)

35.02

Outstanding at March 31, 2018

875

$
35.21

5.75

$
5,465

Exercisable at March 31, 2018

625

$
35.17

5.16

$
3,924

Vested and expected to vest at March 31, 2018

875

$
35.21

5.75

$
5,465

				Weighted -		Weighted -
				Average		Average
				Exercise		Remaining		Aggregate
	Number			Price Per		Contractual		Intrinsic
	of Shares			Share		Term (in years)		Value
Outstanding at December 31, 2018		583		$	35.27
Granted		—			—
Exercised		(67	)		34.99
Forfeited		(1	)		33.16
Outstanding at March 31, 2019		515		$	35.31		4.72	$	6,721
Exercisable at March 31, 2019		438		$	35.48		4.38	$	5,639
Vested and expected to vest at March 31, 2019		515		$	35.31		4.72	$	6,721

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

As a result of the acquisition of SiriusDecisions on January 3, 2019 and the related debt incurred to fund the acquisition, the Company suspended its dividend program in November 2018. Accordingly, the Company did not declare or pay any dividend in the three months ended March 31, 2019. In the three months ended March 31, 2018, the Company declared and paid ~~a dividend~~dividends of $0.20 per share or $3.6 million in the aggregate. In the three months ended March 31, 2017, the Company declared and paid a dividend 0.19 or $3.5 million in the aggregate. In April 2018, the Company declared a dividend of $0.20 per share payable on June 27, 2018 to shareholders of record as of June 13, 2018.

As of March 31, ~~2018,~~2019, Forrester’s Board of Directors had authorized an aggregate $535.0 million to purchase common stock under its stock repurchase ~~program including $50.0 million authorized in February 2018.~~program. The shares repurchased may be used, among other things, in connection with Forrester’s equity incentive and purchase plans. In the three months ended March 31, 2019, the Company did not repurchase any shares of common stock. In the three months ended March 31, 2018, the Company repurchased approximately 0.1 million shares of common stock at an aggregate cost of approximately $4.4 million. InFrom the ~~three months ended~~inception of the program through March 31, ~~2017,~~2019, the Company repurchased ~~approximately 0.6~~16.3 million shares of common stock at an aggregate cost of ~~approximately $21.5 million. From the inception of the program through March 31, 2018, the Company repurchased 16.2 million shares of common stock at an aggregate cost of $469.3~~$474.9 million.

In conjunction with the acquisition of SiriusDecisions in the first quarter of 2019, the Company realigned its management structure into Products, Research and SiriusDecisions.

The ~~Product~~Products segment includes the revenues of the Connect, Analytics, and Events products (excluding the revenues from SiriusDecisions products) and the costs of the organizations responsible for developing and delivering these products. In addition, this segment includes Consulting revenues from the project consulting organization that is included in this segment. The project consulting organization delivers a majority of the Company’s project consulting revenue (excluding SiriusDecisions consulting) and certain advisory services primarily related to the 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. In addition, this segment includes the costs of the Company’s Analytics, Connect and Events organizations. Revenue in this segment includes all revenue for the Company (including Research and Connect) except for revenue from advisory services and project consulting services that are delivered by personnel in the Research and Project Consulting segments.

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

The ~~Project Consulting~~SiriusDecisions segment includes the revenues of the legacy SiriusDecisions products and the costs of the organizations responsible for developing and delivering these products. In addition, this segment includes the costs of ~~the consultants that deliver the majority~~marketing, technology development and business support departments of the ~~Company’s project consulting services. Revenue in this segment includes the project consulting revenue delivered by the consultants in this segment.~~legacy SiriusDecisions business.

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, except as noted above for the SiriusDecisions segment, selling and marketing expenses, general and administrative expenses, stock-based compensation expense, depreciation expense, adjustments to incentive bonus compensation from target amounts, amortization of intangible assets, interest and other ~~income (expense)~~expense, and losses on investments. The accounting policies used by the segments are the same as those used in the consolidated financial statements.

The Company is providing disaggregated revenue by product in the segment tables below ~~in accordance with~~(in thousands). The 2018 amounts have been reclassified to conform to the ~~revenue standard adopted on January 1, 2018.~~current presentation.

	Products		Research		SiriusDecisions		Consolidated
Three Months Ended March 31, 2019
Research services revenues
Research	$	—	$	36,437	$	13,343	$	49,780
Connect		13,115		—		456		13,571
Analytics		5,258		—		—		5,258
Total research services revenues		18,373		36,437		13,799		68,609

Advisory services and events revenues
Consulting		17,837		12,768		1,182		31,787
Events		27		—		226		253
Total advisory services and events revenues		17,864		12,768		1,408		32,040
Total segment revenues		36,237		49,205		15,207		100,649
Segment expenses		18,177		14,029		9,410		41,616
Contribution margin		18,060		35,176		5,797		59,033
Selling, marketing, administrative and other expenses								(60,740	)
Amortization of intangible assets								(6,210	)
Acquisition and integration costs								(2,967	)
Interest and other expense and loss on investments								(2,658	)
Loss before income taxes							$	(13,542	)

						Project
	Product		Research			Consulting		Consolidated			Products		Research		SiriusDecisions		Consolidated
Three Months Ended March 31, 2018
Research services revenues
Research	$	34,643	$	—		$	—	$	34,643		$	—	$	34,643	$	—	$	34,643
Connect		12,564		—			—		12,564			12,564		—		—		12,564
Analytics		4,493		—			—		4,493			4,493		—		—		4,493
Total research services revenues		51,700		—			—		51,700			17,057		34,643		—		51,700

Advisory services and events revenues
Advisory services		—		9,480			34		9,514
Consulting services		—		2,162			12,409		14,571
Consulting												14,407		11,642		—		26,049
Events		—		—			—		—			—		—		—		—
Analytics services		1,964		—			—		1,964
Total advisory services and events revenues		1,964		11,642			12,443		26,049			14,407		11,642		—		26,049
Total segment revenues		53,664		11,642			12,443		77,749			31,464		46,285		—		77,749
Segment expenses		10,117		12,713			6,864		29,694			16,056		13,411		—		29,467
Contribution margin (loss)		43,547		(1,071	)		5,579		48,055
Contribution margin												15,408		32,874		—		48,282
Selling, marketing, administrative and other expenses									(50,157	)								(50,384	)
Amortization of intangible assets									(186	)								(186	)
Other income (expense) and losses on investments									(143	)
Income before income taxes								$	(2,431	)
Acquisition and integration costs																		—
Other expense and loss on investments																		(143	)
Loss before income taxes																	$	(2,431	)

Project

Product

Research

Consulting

Consolidated

Three Months Ended March 31, 2017

Research services revenues

Research

$
35,524

$
—

$
—

$
35,524

Connect

11,637

—

—

11,637

Analytics

4,582

—

—

4,582

Total research services revenues

51,743

—

—

51,743

Advisory services and events revenues

Advisory services

—

8,536

77

8,613

Consulting services

—

1,957

12,380

14,337

Events

80

—

—

80

Analytics services

2,421

—

—

2,421

Total advisory services and events revenues

2,501

10,493

12,457

25,451

Total segment revenues

54,244

10,493

12,457

77,194

Segment expenses

9,227

12,143

5,854

27,224

Contribution margin (loss)

45,017

(1,650
)

6,603

49,970

Selling, marketing, administrative and other expenses

(46,643
)
Amortization of intangible assets

(191
)
Other income (expense) and losses on investments

(194
)
Income before income taxes

$
2,942

~~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 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.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. The new standard modifies the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement. The standard includes changes to fair value transfers and Level 3 fair value disclosures. 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 2018, the FASB issued 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. 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 new standard will be effective for the Company on January 1, 2020. The Company is currently evaluating the potential impact that this standard may have on its financial position and results of operations.

ITEM 2. 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, 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~~changes to our customer engagement model, 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 our research, connect and analytics services, our ability to fulfill existing or generate new project consulting engagements, our ability to ~~realize anticipated benefits from internal reorganizations,~~integrate the operations of acquired companies, the impact of our outstanding debt, the impact of our evolving customer engagement model, technology spending, 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, the ability to attract and retain qualified professional staff, our ability to respond to business and economic conditions and market trends, 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, ~~2017.~~2018. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.

We derive revenues from memberships of our Research, Connect and Analytics products and services, performing ~~advisory~~Consulting services ~~and consulting projects,~~ and hosting Events. We offer contracts for our Research, Connect and Analytics products that are typically renewable annually and payable in advance. Membership revenues are recognized as revenue ratably over the term of the contract. Accordingly, a substantial portion of our billings are initially recorded as deferred revenue. Clients purchase Consulting services (includes advisory services and consulting projects) independently and/or to supplement their memberships to our subscription-based products. Billings attributable to advisory services and consulting projects are initially recorded as deferred revenue. Advisory services 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 are also initially recorded as deferred revenue and are recognized as revenue upon completion of each Event.

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

In the first quarter of 2019, we modified our calculation of client retention, dollar retention, and enrichment in conjunction with a project to fully automate the calculations. Client retention has been expanded to include virtually all client relationships (except for clients that only purchase web-based products such as individual reports, workshops and Event tickets) in comparison to the prior calculation that included only clients that purchased membership-based products. Dollar retention and enrichment are now calculated at a client account level in comparison to a contract level in the prior calculation. This 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. We have provided the metrics under the new methodology for each quarter of 2018 in the table below.

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.

Clients — we aggregate the various divisions and subsidiaries of a corporate parent as a single client and we also aggregate separate instrumentalities of the federal, state, and provincial governments as a single client. We have historically included only clients that purchased membership-based products in our definition of clients. We plan to reassess this definition during the second quarter of 2019.

•

~~Clients~~ — we aggregate the various divisions and subsidiaries of a corporate parent as a single client and we also aggregate separate instrumentalities of the federal, state, and provincial governments as a single client.

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
	March 31,						Increase			Increase			March 31,						Increase			Increase
	2018			2017			(Decrease)			(Decrease)			2019			2018			(Decrease)			(Decrease)
Deferred revenue	$	155.4		$	156.3		$	(0.9	)		(1	%)	$	191.6		$	155.4		$	36.2			23	%
Agreement value	$	246.4		$	236.6		$	9.8			4	%	$	345.3		$	246.4		$	98.9			40	%
Client retention		75	%		74	%		1			1	%		72	%		71	%		1			1	%
Dollar retention		88	%		87	%		1			1	%		90	%		90	%		—			—
Enrichment		98	%		94	%		4			4	%		106	%		110	%		(4	)		(4	%)
Number of clients		2,349			2,427			(78	)		(3	%)		2,850			2,349			501			21	%

Agreement value and number of clients include the effect of SiriusDecisions, but retention and enrichment metrics will not be similarly affected until the first quarter of 2020.

Deferred revenue at March 31, ~~2018 decreased 1%~~2019 increased 23% compared to the prior year and decreased 2% after adjusting for the effect of foreign currency fluctuations. The decrease in deferred revenue resulted from the implementation of the new revenue standard in the first quarter of 2018 that resulted in a 7% reduction in deferred revenue at March 31, 2018 comparedprimarily due to the ~~prior year.~~acquisition of SiriusDecisions. Excluding the effect of ~~the new revenue standard and foreign currency,~~SiriusDecisions, deferred revenue ~~would have~~ increased approximately 5%3% as contract billings exceeded revenue for the period. Agreement value increased 4%40% at March 31, ~~2018~~2019 compared to the prior year with approximately 28 percentage points of growth due to the acquisition of SiriusDecisions and ~~foreign currency had an insignificant effect. The increase in agreement value was~~the remainder due to both an increase in contract bookings and increased bundling of ~~consulting~~Consulting services with our Research and Connect products in our contracts. Client retention rate ~~and dollar retention rate both~~ increased 1 percentage point compared ~~to the prior year period however client retention declined 1 percentage point from~~with both the prior quarter and ~~dollar~~with the prior year period. Dollar retention rate was flat with both the prior ~~quarter.~~quarter and the prior year period. Enrichment rate ~~increased~~decreased 4 percentage points compared to the prior year and ~~increased 2~~3 percentage points compared to the prior ~~quarter.~~quarter period.

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 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, goodwill and other intangible 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, ~~2017.~~2018.

Results of Operations

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

	Three Months Ended						Three Months Ended
	March 31,						March 31,
	2018			2017			2019			2018
Revenues:
Research services		66.5	%		67.0	%		68.2	%		66.5	%
Advisory services and events		33.5			33.0			31.8			33.5
Total revenues		100.0			100.0			100.0			100.0
Operating expenses:
Cost of services and fulfillment		43.9			40.7			44.8			43.9
Selling and marketing		42.5			39.7			41.8			42.5
General and administrative		13.8			13.2			13.1			13.8
Depreciation		2.5			2.1			2.0			2.5
Amortization of intangible assets		0.2			0.2			6.2			0.2
Income (loss) from operations		(2.9	)		4.1
Other income (expense), net		(0.2	)		—
Acquisition and integration costs								2.9			—
Loss from operations								(10.8	)		(2.9	)
Interest expense								(2.3	)		—
Other expense, net								(0.3	)		(0.2	)
Losses on investments, net		—			(0.3	)		—			—
Income (loss) before income taxes		(3.1	)		3.8
Loss before income taxes								(13.5	)		(3.1	)
Income tax benefit		(0.9	)		(0.1	)		(0.3	)		(0.9	)
Net income (loss)		(2.2	%)		3.9	%
Net loss								(13.2	%)		(2.2	%)

Three Months Ended

Absolute

Percentage

March 31,

Increase

Increase

2018

2017

(Decrease)

(Decrease)

(dollars in millions)

Revenues

$
77.7

$
77.2

$
0.5

1
%
Revenues from research services

$
51.7

$
51.7

$
—

—

Revenues from advisory services and events

$
26.0

$
25.5

$
0.5

2
%
Revenues attributable to customers outside of the U.S.

$
18.8

$
16.8

$
2.0

12
%
Percentage of revenue attributable to customers
outside of the U.S.

24
%

22
%

2

9
%
Number of events

—

—

—

—

	Three Months Ended						Absolute			Percentage
	March 31,						Increase			Increase
	2019			2018			(Decrease)			(Decrease)
	(dollars in millions)
Revenues	$	100.6		$	77.7		$	22.9			29	%
Revenues from research services	$	68.6		$	51.7		$	16.9			33	%
Revenues from advisory services and events	$	32.0		$	26.0		$	6.0			23	%
Revenues attributable to customers outside of the U.S.	$	22.4		$	18.8		$	3.6			19	%
Percentage of revenue attributable to customers outside of the U.S.		21	%		24	%		(3	)		(13	%)
Number of events		2			—			2			100	%

Total revenues increased 1%29% during the three months ended March 31, ~~2018~~2019 compared to the prior year ~~period. After adjusting for~~period, with SiriusDecisions contributing $15.2 million or 19.5% of the effect of foreign currency fluctuations, revenues decreased 1%. Adjustments of $2.3 million resulting from new revenue guidance had the effect of reducing revenues by 3% compared to the prior year period. increase. Revenues from customers outside the U.S. increased ~~12%~~19% during the three months ended March 31, ~~2018~~2019 compared to the prior year period and increased 4% 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 March 31, 2018 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. during the three months ended March 31, ~~2018~~2019 was ~~principally~~ due to ~~an increase~~the acquisition of SiriusDecisions, which added $2.5 million in international revenue, and growth in revenues in Canada and the Asia Pacific ~~region.~~region in the legacy Forrester business.

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 ~~were essentially flat~~increased 33% during the three months ended March 31, ~~2018~~2019 compared to the prior year period, ~~and after adjusting for~~with SiriusDecisions contributing $13.8 million or 27% of the ~~effect~~increase. The remainder of ~~foreign currency fluctuations, decreased 2%. A decrease in revenues for our Research and Analytics products~~the increase was ~~essentially offset~~primarily driven by an increase in ~~revenues~~demand for ~~our Connect~~the legacy Forrester Research products. ~~Adjustments of $1.7 million resulting from new revenue guidance had the effect of reducing research services revenue by 3% compared to the prior year period.~~

Revenues from advisory services and events increased 2%23% during the three months ended March 31, ~~2018~~2019 compared to the prior year period, ~~and increased 1% after adjusting for~~with SiriusDecisions contributing $1.4 million or 5% of the ~~effect~~increase. The remainder of ~~foreign currency fluctuations. The~~the increase ~~in revenues for the three months~~

~~ended March 31, 2018~~ was ~~principally~~ due to ~~increases in both advisory and consulting revenues, that was partially offset by a decline in Analytics services~~strong delivery of legacy Forrester Consulting revenues. ~~Adjustments of $0.5 million resulting from new revenue guidance had the effect of reducing advisory services and events~~ ~~revenue by 2% compared to the prior year period.~~

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

Cost of services and fulfillment expenses increased 9%32% during the three months ended March 31, ~~2018~~2019 compared to the prior year ~~period and after adjusting for~~period. Approximately $8.0 million of the ~~effect~~increase was attributable to the acquisition of ~~foreign currency fluctuations, increased 6%.~~SiriusDecisions. The $3.0 million increase ~~in dollars~~attributable to legacy Forrester activity was primarily due to (1) a ~~$1.7~~$1.3 million increase in compensation and benefit costs, resulting principally from an increase in employees compared to the prior year period and annual merit increases, (2) a ~~$0.7~~$0.5 million increase in professional services costs primarily due to an increase in ~~outsourced fees related to consulting projects delivered, an increase in fees related to the delivery~~outsourcing of ~~reprints~~services performed on our ~~digital reprint platform,~~revenue contracts, (3) a $0.4 million increase in travel and ~~an increase in costs for the digitization of our Analytics products,~~entertainment expenses, and ~~(3)~~(4) a ~~$0.3~~$0.4 million increase in ~~facilities and software services costs.~~stock compensation expense.

Selling and marketing expenses increased 8%27% during the three months ended March 31, ~~2018~~2019 compared to the prior year ~~period and after adjusting for~~period. Approximately $8.4 million of the ~~effect~~increase was attributable to the acquisition of ~~foreign currency fluctuations, increased 6%.~~SiriusDecisions. The $0.6 million increase ~~in dollars~~attributable to legacy Forrester activity was primarily due to ~~(1) a $1.1 million increase in compensation and benefit costs due to an increase in the average cost per employee and annual merit increases, (2)~~ a $0.5 million increase in travel and entertainment expenses.

General and administrative expenses increased 23% during the three months ended March 31, 2019 compared to the prior year period. Approximately $2.1 million of the increase was attributable to the acquisition of SiriusDecisions. The $0.4 million increase attributable to legacy Forrester activity was primarily ~~resulting from an increase in expense for our annual sales conference, and (3)~~due to multiple small increases including an increase in ~~the allowance for doubtful accounts,~~compensation and benefits costs resulting principally from an increase in ~~facilities and software services costs and an increase in professional services costs.~~

~~Subject to the business environment, we expect our sales headcount growth to be flat to low single digits in 2018 as compared to the year ended December 31, 2017.~~

~~General and administrative expenses increased 6% during the three months ended March 31, 2018~~employees compared to the prior year period and ~~after adjusting for the effect of foreign currency fluctuations, increased 3%. The~~an increase in ~~dollars was primarily due to a $0.4 million increase in compensation~~professional and ~~benefits costs resulting from annual merit increases.~~

Depreciation ~~expense increased by $0.3 million during the three months ended March 31, 2018 compared to the prior year period primarily due to additional software assets being put into service.~~

~~Amortization~~Depreciation expense remained essentially consistent during the three months ended March 31, ~~2018~~2019 compared to the prior year period.

~~Other income (expense), net primarily consists of interest income on our investments as well as gains and losses on foreign currency. The decrease in other income (expense), net of $0.1~~Amortization expense increased by $6.0 million during the three months ended March 31, ~~2018~~2019 compared to the prior year period due to our recent acquisitions.

During the three months ended March 31, 2019, we incurred $3.0 million of acquisition and integration costs. The costs consist of the direct and incremental costs to acquire and integrate the companies as well as certain fair value adjustments related to the acquisitions. The charges primarily consisted of consulting, severance, accounting and tax professional fees, and valuation services. These charges were partially offset by a $1.1 million decrease due to recording deferred commissions for SiriusDecisions as the result of adopting ASC 606. We expect to incur acquisition and integration costs in a range of $6.5 million to $7.5 million for the year ending December 31, 2019.

During the three months ended March 31, 2019, we incurred $2.4 million of interest expense. Interest expense consists of interest on our borrowings used to finance the acquisition of SiriusDecisions.

Other expense, net primarily consists of losses on foreign currency partially offset by interest income. The increase in other expense, net of $0.2 million during the three months ended March 31, 2019 compared to the prior year period was primarily due to ~~an increase~~a decrease in ~~foreign currency losses.~~

Losses 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~~Losses on investments, net remained essentially consistent during the three months ended March 31, ~~2018 was due to a decrease in investment losses incurred by the underlying funds as~~2019 compared to the prior year ~~periods.~~period.

Income tax benefit ~~for the three months ended March 31, 2018 was $0.7 million resulting in an effective tax rate of 28.7% for the period. The increase in the effective tax rate~~ during the three months ended March 31, ~~2018 compared~~2019 includes a discrete tax expense of $0.6 million due to a settlement with U.S. Competent Authority during the ~~prior year period was due primarily to the recognition of a $1.3 million benefit from the settlement of a tax audit in the first quarter of 2017.~~ period. For the full year ~~2018,~~2019, we anticipate that our effective tax rate will be approximately ~~31%.~~5% due to a projected pretax loss for the year.

In conjunction with the acquisition of SiriusDecisions in the first quarter of 2019, we realigned our management structure into Products, Research and SiriusDecisions. Prior year amounts have been reclassified to conform to the current presentation.

The Research segment includes the revenues of the Research products and the cost of the organizations responsible for developing and delivering the Research products (excluding the costs and revenues from SiriusDecisions products). In addition, this segment includes

Consulting revenues primarily from the delivery of advisory services (such as workshops, speeches and advisory days) delivered by our research analysts.

The SiriusDecisions segment includes the revenues of the legacy SiriusDecisions products and the costs of the organizations responsible for developing and delivering these products. In addition, this segment includes the costs of ~~our Analytics, Connect~~marketing, technology development and Events organizations. Revenue in this segment includes all of our revenue (including Research and Connect) except for revenue from advisory services and project consulting services that are delivered by personnel in the Research and Project Consulting segments.

The Research segment includes the costs of our research personnel who are responsible for writing the research and performing the webinars and inquiries for our Research and Connect products. In addition, the research personnel deliver advisory services (such as workshops, speeches and advisory days) and a portion of our project consulting services. Revenue in this segment includes only revenue from advisory services and project consulting services that are delivered by the research personnel in this segment.

~~The Project Consulting segment includes the costs~~business support departments 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.~~legacy SiriusDecisions business.

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, except as noted above for the SiriusDecisions segment, selling and marketing expenses, general and administrative expenses, stock-based compensation expense, depreciation expense, adjustments to incentive bonus compensation from target amounts, amortization of intangible assets, interest and other ~~income (expense)~~expense, and losses on investments. The accounting policies used by the segments are the same as those used in the consolidated financial statements.

	Products			Research			SiriusDecisions		Consolidated
Three Months Ended March 31, 2019
Research services revenues
Research	$	—		$	36,437		$	13,343	$	49,780
Connect		13,115			—			456		13,571
Analytics		5,258			—			—		5,258
Total research services revenues		18,373			36,437			13,799		68,609

Advisory services and events revenues
Consulting		17,837			12,768			1,182		31,787
Events		27			—			226		253
Total advisory services and events revenues		17,864			12,768			1,408		32,040
Total segment revenues		36,237			49,205			15,207		100,649
Segment expenses		18,177			14,029			9,410		41,616
Contribution margin		18,060			35,176			5,797		59,033
Year over year revenue change		15	%		6	%	N/A			29	%
Year over year expense change		13	%		5	%	N/A			41	%

Project

Product

Research

Consulting

Consolidated

Three Months Ended March 31, 2018

Research services revenues

Research

$
34,643

$
—

$
—

$
34,643

Connect

12,564

—

—

12,564

Analytics

4,493

—

—

4,493

Total research services revenues

51,700

—

—

51,700

Advisory services and events revenues

Advisory services

—

9,480

34

9,514

Consulting services

—

2,162

12,409

14,571

Events

—

—

—

—

Analytics services

1,964

—

—

1,964

Total advisory services and events revenues

1,964

11,642

12,443

26,049

Total segment revenues

53,664

11,642

12,443

77,749

Segment expenses

10,117

12,713

6,864

29,694

Contribution margin (loss)

43,547

(1,071
)

5,579

48,055

Year over year revenue change

(1
%)

11
%

—

1
%
Year over year expense change

10
%

5
%

17
%

9
%

						Project				Products		Research		SiriusDecisions		Consolidated
	Product		Research			Consulting		Consolidated
Three Months Ended March 31, 2017
Three Months Ended March 31, 2018
Research services revenues
Research	$	35,524	$	—		$	—	$	35,524	$	—	$	34,643	$	—	$	34,643
Connect		11,637		—			—		11,637		12,564		—		—		12,564
Analytics		4,582		—			—		4,582		4,493		—		—		4,493
Total research services revenues		51,743		—			—		51,743		17,057		34,643		—		51,700

Advisory services and events revenues
Advisory services		—		8,536			77		8,613
Consulting services		—		1,957			12,380		14,337
Consulting											14,407		11,642		—		26,049
Events		80		—			—		80		—		—		—		—
Analytics services		2,421		—			—		2,421
Total advisory services and events revenues		2,501		10,493			12,457		25,451		14,407		11,642		—		26,049
Total segment revenues		54,244		10,493			12,457		77,194		31,464		46,285		—		77,749
Segment expenses		9,227		12,143			5,854		27,224		16,056		13,411		—		29,467
Contribution margin (loss)		45,017		(1,650	)		6,603		49,970
Contribution margin											15,408		32,874		—		48,282

Product segment revenues ~~decreased 1%~~increased 15% during the three months ended March 31, ~~2018~~2019 compared to the prior year period. ~~Research services~~Connect revenues ~~were essentially flat~~increased 4% driven by our new learning product and Analytics revenues grew 17% due primarily to the FeedbackNow product line. Consulting revenues increased 24% driven by healthy backlog entering the quarter and higher utilization of our consultants. Product segment expenses increased 13% during the three months ended March 31, 2018 compared to the prior year period. A decrease in revenues for our Research and Analytics products was essentially offset by an increase in revenues for our Connect products. Adjustments of $1.7 million resulting from new revenue guidance had the effect of reducing research services revenue by 3% compared to the prior year period. Advisory services and events revenues, which is comprised of Analytics consulting and Events revenues in this segment, decreased 22% during the three months ended March 31, 2018 compared to the prior year period. The decrease in advisory services and events revenues during the three months ended March 31, 2018 was primarily due to a $0.5 million decrease in Analytics consulting revenues. Product segment expenses increased 10% during the three months ended March 31, 20182019 compared to the prior year period. The increase in expenses was primarily due to a ~~$0.5~~$1.3 million increase in compensation and benefit costs due to an increase in the number of employees as well as a ~~$0.4~~$0.5 million increase in ~~professional services~~billable expenses ~~driven by an increase in fees related to the delivery of reprints on our digital reprint platform,~~ and ~~an increase in costs for the digitization of our Analytics products.~~

Research segment revenues increased ~~11%~~6% during the three months ended March 31, ~~2018~~2019 compared to the prior year ~~period~~period. The Research product line increased 5% driven by ~~an 11% increase in both~~our reprint product and Consulting revenues increased 10% due to strong delivery of advisory services and ~~consulting revenues.~~project consulting. Research segment expenses increased 5% during the three months ended March 31, ~~2018~~2019 compared to the prior year period. The increase in expenses ~~during the three months ended March 31, 2018~~ was primarily due to an increase in compensation and benefit costs, ~~of $0.4 million compared to the prior year period.~~professional services, and travel and entertainment.

Project Consulting segment revenues remained essentially flat during the three months ended March 31, 2018 compared to the prior year period due primarily due to a slight decline in revenues from our content marketing group that was essentially offset by an slight increase in revenues from ~~our~~ strategic consulting group. Project Consulting expenses increased 17% during the three months ended March 31, 2018 compared to the prior year period. The increase in expenses during the three months ended March 31, 2018 was primarily due to an increase in compensation and benefit costs of $0.8 million compared to the prior year period.

The amounts reported in our earnings release and Form 8-K filed on April 30, 2019 for cash generated from operating activities and cash used for acquisitions of $26.5 million and $(239.4) million, respectively, have been adjusted in this Form 10-Q to $26.0 million and $(238.9) million, respectively.

We have historically financed our operations primarily through funds generated from operations. ~~Memberships for research~~Research services revenues, which constituted approximately ~~67%~~68% of our revenues during the three months ended March 31, ~~2018,~~2019, are generally renewable annually and are typically payable in advance. We generated cash from operating activities of ~~$7.8~~$26.0 million and ~~$19.5~~$7.8 million during the three months ended March 31, ~~2018~~2019 and ~~2017,~~2018, respectively. The ~~$11.7~~$18.2 million ~~decrease~~increase in cash provided from operations for the three months ended March 31, ~~2018~~2019 was ~~primarily~~ attributable to a ~~$7.4~~$33.5 million ~~decrease~~increase in cash generated from working capital, ~~and~~driven by (a) a ~~$4.2~~$23.2 million ~~decrease~~increase from accounts receivable in ~~net income and the effect of non-cash items. The decrease in cash from working capital was primarily~~deferred revenue due to ~~increases~~strong bookings and collections activity in the current period and due to the prior period having lower than normal cash generation due to system changes implemented in the first quarter of 2018 which delayed client invoicing and (b) $7.6 million of lower cash used for accrued expenses ~~resulting from the payout of year end incentive compensation as well as cash used for prepaids and other current assets~~ due to ~~early renewals~~an increase of large contracts, the timing of benefit payments, and tax payments exceeding our current tax provision. We expect cash from operating activities to improve during the next three months compared to the comparable prior year period as accounts receivable is approximately $7$7.0 million ~~higher at March 31, 2018 compared to March 31, 2017, resulting from a delay~~in accrued income taxes in the ~~invoicing~~current period (which partially offset the non-cash deferred tax expense of ~~our clients at~~$10.5 million). These increases were partially offset by a $15.3 million decrease in net loss combined with the ~~beginning~~effect of non-cash items, which was due to a $10.5 million deferred tax expense recorded in the current ~~year due to system modifications related to the adoption of the new revenue standard as of January 1, 2018.~~ period and increased acquisition and integration costs.

During the three months ended March 31, 2019, we used cash in investing activities of $241.7 million, consisting primarily of $238.9 million for the acquisition of SiriusDecisions, net of cash acquired, and $2.8 million in purchases of property and equipment. Property and equipment purchases during 2019 consisted primarily of software and leasehold improvements. During the three months ended March 31, 2018, we used $1.4 million of cash from investing activities, consisting primarily of $1.3 million of purchases of property and equipment and $0.1 million in net purchases of marketable investments. Property and equipment purchases during 2018 consisted primarily of ~~software~~software.~~. During the three months ended March 31, 2017, we used $0.7 million of cash from investing activities, consisting primarily~~ of $1.5 million of purchases of property and equipment partially offset by $0.7 million in net proceeds from sales and maturities of marketable investments. Property and equipment purchases during 2017 consisted primarily of computer equipment and software.

We ~~used $5.5~~generated $151.4 million of cash from financing activities during the three months ended March 31, ~~2018~~2019 primarily due to $171.3 million of borrowings, which reflects the face value of debt of $175.0 million less $3.7 million that was netted against the proceeds to pay debt issuance costs. This was partially offset by $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. We used $5.5 million of cash in financing activities during the three months ended March 31, 2018 primarily due to the use of $4.4 million for purchases of our common stock and and the payment of a $3.6 million quarterly dividend, at $0.20 per share, which were partially offset by $2.5 million of proceeds from the exercise of stock options and our employee stock purchase plan. ~~We used $22.2 million of cash from financing activities during the three months ended~~At March 31, ~~2017 primarily~~ ~~due~~2019, we had $30.0 million outstanding on our revolving credit facility and plan to ~~$21.5 million for purchases of~~use excess cash flow, if any, to continue to make discretionary payments on our common stock and the payment of a $3.5 million quarterly dividend, at $0.19 per share, which was partially offset by $2.7 million of proceeds from the exercise of stock options and our employee stock purchase plan. revolving credit facility.

~~In February 2018, our Board of Directors increased our stock repurchase authorization by an additional $50.0 million.~~ As of March 31, ~~2018,~~2019, our remaining stock repurchase authorization was approximately ~~$65.7~~$60.1 million.

In connection with the acquisition of SiriusDecisions, we entered into a $200.0 million credit agreement on January 3, 2019. 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 ~~plan~~utilized the full $125.0 million of the Term Loans and $50.0 million of the Revolving Credit Facility to ~~repurchase~~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 on this debt is provided in Note 3 – Debt included herein

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 LIBOR-based loans. The Term Loans must be prepaid with net cash proceeds of (i) certain debt incurred or issued by us and our ~~common~~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) the London Interbank Offering Rate (“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 equal to 0.35% per annum on the average daily unused portion of the Revolving Credit Facility, payable quarterly, in arrears. The commitment fee may decrease to 0.30% or 0.25% based on our consolidated total leverage ratio.

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, ~~as market conditions warrant.~~change fiscal year, or enter into certain transactions with affiliates and subsidiaries. The first covenant reporting period was March 31, 2019 and we were in full compliance. The credit agreement also contains customary events of default, representations, and warranties.

As of March 31, ~~2018,~~2019, we had cash and cash equivalents of ~~$82.1 million and marketable investments of $54.3~~$75.0 million. These balances include ~~$68.8~~$46.0 million held outside of the U.S. If these funds 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. We would not expect these additional taxes to be significant. 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 contractual obligations table as disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2017.~~2018 due to the acquisition of SiriusDecisions that closed on January 3, 2019. As of March 31, 2019, we have the following new future contractual obligations (in thousands):

See Note 1 and Note 1012 of 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~~Except as noted below, there have been no material ~~changes~~change 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, ~~2017.~~2018.

As of March 31, 2019, we had $153.4 million in total debt principal outstanding. See Note 3 — Debt herein for additional information regarding our outstanding debt obligations.

All of our debt outstanding as of March 31, 2019 was based on a floating base rate of interest, which potentially exposes us to increases in interest rates. As an indication of our potential exposure to changes in interest rates, a hypothetical 25 basis point increase or decrease in interest rates could change our annual pretax interest expense for the following 12 month period by approximately $0.4 million.

We maintain “disclosure controls and procedures,” as such term is defined under Securities Exchange Act Rule 13a-15(e), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures. In designing and evaluating the disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures as of March 31, ~~2018.~~2019. 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.

The foregoing assessment excludes our acquisition on January 3, 2019 of SiriusDecisions, for which we paid $247.3 million at closing. See Note 2 to the Consolidated Financial Statements for additional information. This exclusion is in accordance with the general guidance issued by the Staff of the SEC that an assessment of a recent business acquisition may be omitted from management’s report on internal control over financial reporting in the first year of consolidation.

~~As of January 1, 2018, we implemented ASC 606,~~ ~~Revenue from Contracts with Customers. As a result, we implemented~~There were no changes to our accounting processes and procedures related to revenue recognition, the control activities within them and the system functionalities to enable the preparation of financial information. This included the development of new policies based on the five-step model provided in the new revenue standard, new training, gathering and analysis of information for disclosures and determining and recording adjustments to beginning retained earnings for the modified retrospective transition adoption method. There was no other change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended March 31, ~~2018~~2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial ~~reporting.~~

reporting with respect to historical Forrester operations. We are currently in the process of integrating our acquisition of SiriusDecisions, evaluating its internal controls and implementing our internal control structure over its operations, which may lead us to modify certain internal controls in future periods.

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, ~~2017,~~2018, 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. The risks described in our Annual Report on Form 10-K are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

Through March 31, ~~2018,~~2019, our Board of Directors authorized an aggregate $535.0 million to purchase common stock under our stock repurchase ~~program, including $50.0 million authorized in February 2018.~~program. During the quarter ended March 31, ~~2018,~~2019, we ~~purchased the following~~did not purchase any shares of our common stock under the stock repurchase ~~program:~~

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

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

Large accelerated filer	☐	Accelerated filer	☒

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


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

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

Consolidated Balance Sheets as of March 31, ~~2018~~2019 and December 31, ~~2017~~2018		3

Consolidated Statements of ~~Income (Loss)~~Operations for the Three Months Ended March 31, ~~2018~~2019 and ~~2017~~2018		4

Consolidated Statements of Comprehensive ~~Income (Loss)~~Loss for the Three Months Ended March 31, ~~2018~~2019 and ~~2017~~2018		5

Consolidated Statements of Cash Flows for the Three Months Ended March 31, ~~2018~~2019 and ~~2017~~2018		6

Notes to Consolidated Financial Statements		7
Item 2.	~~ITEM 2.~~ Management’s Discussion and Analysis of Financial Condition and Results of Operations		20
Item 3.	~~ITEM 3.~~ Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	28

~~ITEM 4. Controls and Procedures~~PART II		28OTHER INFORMATION
~~PART II. OTHER INFORMATION~~Item 1A.		29
~~ITEM 1A.~~ Risk Factors		29
Item 2.	~~ITEM 2.~~ Unregistered Sales of Equity Securities and Use of Proceeds		29
Item 6.	~~ITEM 6.~~ Exhibits		30

	Three Months Ended
	March 31, 2019
Operating lease cost	$	3,569
Short-term lease cost		255
Variable lease cost		1,234
Total lease cost	$	5,058

	Three Months Ended
	March 31, 2019
Cash paid for operating cash flows from operating leases	$	3,753
Operating right-of-use assets obtained in exchange for lease obligations	$	12,011
Weighted-average remaining lease term - operating leases (years)		7.0
Weighted-average discount rate - operating leases		5.1	%

2019	$	9,590
2020		15,030
2021		12,692
2022		11,993
2023		11,988
Thereafter		35,041
Total lease payments		96,334
Less imputed interest		(16,087	)
Present value of lease liabilities	$	80,247

Operating lease right-of-use assets	$	71,529

Short term operating lease liability (1)	$	16,404
Non-current operating lease liabilities		63,843
Total operating lease liabilities	$	80,247

Consolidated Balance Sheet
	As of March 31, 2018
			Amounts as
			if Previous
			Guidance in
	As Reported		Effect
Accounts receivable, net	$	62,154	$	67,826
Deferred commissions		14,722		13,791
Prepaid expenses and other current assets		18,641		23,427
Total current assets		231,848		241,375
Other assets		6,942		6,380
Total assets		340,736		349,702

Deferred revenue	$	155,425	$	166,669
Total current liabilities		191,038		202,282
Total liabilities		199,441		210,685
Retained earnings		121,495		119,217
Total stockholders’ equity		141,295		139,017
Total liabilities and stockholders’ equity		340,736		349,702

Consolidated Statement of Income (Loss)
	Three Months Ended March 31, 2018
				Amounts as
				if Previous
				Guidance in
	As Reported			Effect
Revenues:
Research services	$	51,700		$	53,387
Advisory services and events		26,049			26,618
Total revenues		77,749			80,005
Operating expenses:
Cost of services and fulfillment		34,105			34,090
Selling and marketing		33,011			33,073
Total operating expenses		80,037			80,084
Income from operations		(2,288	)		(79	)
Income before income taxes		(2,431	)		(222	)
Income tax provision		(698	)		(13	)
Net loss		(1,733	)		(209	)
Basic loss per common share	$	(0.10	)	$	(0.01	)
Diluted loss per common share	$	(0.10	)	$	(0.01	)

Consolidated Statement of Comprehensive Income (Loss)
	Three Months Ended March 31, 2018
				Amounts as
				if Previous
				Guidance in
	As Reported			Effect
Net loss	$	(1,733	)	$	(209	)
Comprehensive income (loss)		(145	)		1,379

Consolidated Statement of Cash Flows
	Three Months Ended March 31, 2018
				Amounts as
				if Previous
				Guidance in
	As Reported			Effect
Cash flows from operating activities:
Net income	$	(1,733	)	$	(209	)
Accounts receivable		7,921			2,249
Deferred commissions		(122	)		(75	)
Prepaid expenses and other current assets		(5,454	)		(4,769	)
Deferred revenue		17,275			20,691

2019	$	4,688
2020		9,375
2021		12,500
2022		12,500
2023		15,625
Thereafter		68,750
Total principal payments	$	123,438

Description:	March 31, 2019			December 31, 2018
Term loan facility (1)	$	123,438		$	��
Revolving credit facility (1) (2)		30,000			—
Principal amount outstanding (3)		153,438			—
Less: Deferred financing fees		(2,679	)		—
Net balance sheet carrying amount	$	150,759		$	—

	As of March 31, 2018
			Gross		Gross
	Amortized		Unrealized		Unrealized			Market
	Cost		Gains		Losses			Value
Federal agency obligations	$	1,800	$	—	$	(6	)	$	1,794
Corporate obligations		52,800		—		(336	)		52,464
Total	$	54,600	$	—	$	(342	)	$	54,258

	As of December 31, 2017
			Gross		Gross
	Amortized		Unrealized		Unrealized			Market
	Cost		Gains		Losses			Value
Federal agency obligations	$	1,800	$	—	$	(7	)	$	1,793
Corporate obligations		52,721		—		(181	)		52,540
Total	$	54,521	$	—	$	(188	)	$	54,333

	FY 2018		FY 2019		FY2020		Total
Federal agency obligations	$	1,794	$	—	$	—	$	1,794
Corporate obligations		19,970		26,720	$	5,774		52,464
Total	$	21,764	$	26,720	$	5,774	$	54,258

	As of March 31, 2018
	Less Than 12 Months				12 Months or Greater
	Market		Unrealized		Market		Unrealized
	Value		Losses		Value		Losses
Federal agency obligations	$	—	$	—	$	1,794	$	6
Corporate obligations		39,966		295		12,498		41
Total	$	39,966	$	295	$	14,292	$	47

	As of December 31, 2018
	Level 1		Level 2		Level 3			Total
Assets:
Money market funds (1)	$	255	$	—	$	—		$	255
Total Assets:	$	255	$	—	$	—		$	255

Liabilities
Contingent purchase price (2)	$	—	$	—	$	(4,196	)	$	(4,196	)
Total Liabilities:	$	—	$	—	$	(4,196	)	$	(4,196	)

	Contingent
	Consideration
Balance at December 31, 2018	$	(4,196	)
Fair value adjustment of contingent purchase price (1)		88
Foreign exchange effect		49
Balance at March 31, 2019	$	(4,059	)

				Weighted-					Weighted-
				Average					Average
	Number of			Grant Date		Number of			Grant Date
	Shares			Fair Value		Shares			Fair Value
Unvested at December 31, 2017		509		$	37.59
Unvested at December 31, 2018							497		$	40.89
Granted		12			39.14		162			44.88
Vested		(9	)		37.39		(11	)		40.38
Forfeited		(17	)		37.62		(11	)		41.94
Unvested at March 31, 2018		495		$	37.63
Unvested at March 31, 2019							637		$	41.89

	Q1 2018			Q2 2018			Q3 2018			Q4 2018
Client retention		71	%		71	%		71	%		71	%
Dollar retention		90	%		89	%		90	%		90	%
Enrichment		110	%		107	%		109	%		109	%

Contractual Obligations (1)		Total				2019				2020				2021				2022				2023				Thereafter
Interest payments - long-term debt (2)		$	24,528			$	4,689			$	5,857			$	5,306			$	4,660			$	3,969			$	47

					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)
February 1 - February 28		44,953	$	41.28
March 1 - March 31		60,623	$	41.42
		105,576			$	65,700


10.1		Third Amendment to Office Lease dated as of March 12, 2019 between Spear Street Corridor LLC and the Company. (filed herewith)

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)