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 every Interactive Data File required to be submitted 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 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.

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 6, ~~2019, 18,437,000~~2020, 18,760,000 shares of the registrant’s common stock were outstanding.

	March 31,			December 31,			March 31,			December 31,
	2019			2018			2020			2019
ASSETS
Current Assets:
Cash and cash equivalents	$	75,012		$	140,296		$	69,815		$	67,904
Accounts receivable, net		69,122			67,318
Accounts receivable, net of allowance for expected credit losses of $1,144 and $628 as of March 31, 2020 and December 31, 2019, respectively								59,505			84,605
Deferred commissions		17,254			15,677			18,603			20,326
Prepaid expenses and other current assets		16,299			12,802			24,980			19,201
Total current assets		177,687			236,093			172,903			192,036
Property and equipment, net		26,357			22,005			28,748			29,937
Operating lease right-of-use assets		71,529			—			64,220			69,100
Goodwill		242,543			85,165			242,690			243,895
Intangible assets, net		114,684			4,951			92,655			97,363
Other assets		7,578			5,310			7,082			6,829
Total assets	$	640,378		$	353,524		$	608,298		$	639,160
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable	$	1,209		$	588		$	352		$	505
Accrued expenses and other current liabilities		69,946			54,065			51,450			79,857
Current portion of long-term debt		7,031			—			10,156			9,375
Deferred revenue		191,612			135,332			195,399			179,194
Total current liabilities		269,798			189,985			257,357			268,931
Long-term debt, net of deferred financing fees		143,728			—			104,202			121,170
Non-current operating lease liabilities		63,843			—			63,840			67,062
Other non-current liabilities		19,195			11,939			24,727			23,909
Total liabilities		496,564			201,924			450,126			481,072

Stockholders' Equity (Note 10):
Stockholders' Equity (Note 12):
Preferred stock, $0.01 par value
Authorized - 500 shares; issued and outstanding - none		—			—			—			—
Common stock, $0.01 par value
Authorized - 125,000 shares
Issued - 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
Issued - 23,389 and 23,275 shares as of March 31, 2020 and December 31, 2019, respectively
Outstanding - 18,758 and 18,644 shares as of March 31, 2020 and December 31, 2019, respectively								234			233
Additional paid-in capital		206,655			200,696			220,308			216,454
Retained earnings		114,401			127,717			117,477			118,147
Treasury stock - 4,631 shares as of March 31, 2019 and December 31, 2018, at cost		(171,889	)		(171,889	)
Treasury stock - 4,631 shares as of March 31, 2020 and December 31, 2019, at cost								(171,889	)		(171,889	)
Accumulated other comprehensive loss		(5,584	)		(5,154	)		(7,958	)		(4,857	)
Total stockholders’ equity		143,814			151,600			158,172			158,088
Total liabilities and stockholders’ equity	$	640,378		$	353,524		$	608,298		$	639,160

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

	Three Months Ended						Three Months Ended
	March 31,						March 31,
	2019			2018			2020			2019
Revenues:
Research services	$	68,609		$	51,700		$	72,796		$	68,609
Advisory services and events		32,040			26,049			33,549			32,040
Total revenues		100,649			77,749			106,345			100,649
Operating expenses:
Cost of services and fulfillment		45,110			34,105			43,353			45,110
Selling and marketing		42,033			33,011			40,273			42,033
General and administrative		13,190			10,739			12,005			13,190
Depreciation		2,023			1,996			2,406			2,023
Amortization of intangible assets		6,210			186			4,712			6,210
Acquisition and integration costs		2,967			—			2,875			2,967
Total operating expenses		111,533			80,037			105,624			111,533
Loss from operations		(10,884	)		(2,288	)
Income (loss) from operations								721			(10,884	)
Interest expense		(2,352	)		—			(1,538	)		(2,352	)
Other expense, net		(270	)		(118	)
Losses on investments, net		(36	)		(25	)
Other income (expense), net								310			(270	)
Gain (loss) on investments, net								13			(36	)
Loss before income taxes		(13,542	)		(2,431	)		(494	)		(13,542	)
Income tax benefit		(226	)		(698	)
Income tax expense (benefit)								19			(226	)
Net loss	$	(13,316	)	$	(1,733	)	$	(513	)	$	(13,316	)
Basic loss per common share	$	(0.73	)	$	(0.10	)	$	(0.03	)	$	(0.73	)
Diluted loss per common share	$	(0.73	)	$	(0.10	)	$	(0.03	)	$	(0.73	)
Basic weighted average common shares outstanding		18,363			18,036			18,705			18,363
Diluted weighted average common shares outstanding		18,363			18,036			18,705			18,363
Cash dividends declared per common share	$	—		$	0.20

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

	Three Months Ended						Three Months Ended
	March 31,						March 31,
	2019			2018			2020			2019
Cash flows from operating activities:
Net loss	$	(13,316	)	$	(1,733	)	$	(513	)	$	(13,316	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation		2,023			1,996			2,406			2,023
Impairment of property and equipment								626			—
Amortization of intangible assets		6,210			186			4,712			6,210
Net losses from investments		36			25
Net (gains) losses from investments								(13	)		36
Deferred income taxes		(10,529	)		93			(251	)		(10,529	)
Stock-based compensation		2,685			1,963			2,802			2,685
Operating lease right-of-use asset amortization and impairments								4,535			3,225
Amortization of deferred financing fees		230			—			244			230
Amortization of premium on investments		—			25
Foreign currency losses		330			387
Foreign currency (gains) losses								(229	)		330
Changes in assets and liabilities, net of acquisitions:
Accounts receivable		19,239			7,921			24,556			19,239
Deferred commissions		(1,577	)		(122	)		1,723			(1,577	)
Prepaid expenses and other current assets		(1,945	)		(5,454	)		(6,943	)		(1,945	)
Operating lease right-of-use asset		3,225			—
Accounts payable		902			133			(143	)		902
Accrued expenses and other liabilities		(7,244	)		(14,890	)		(27,264	)		(7,244	)
Deferred revenue		29,108			17,275			18,574			29,108
Operating lease liabilities		(3,389	)		—			(2,999	)		(3,389	)
Net cash provided by operating activities		25,988			7,805			21,823			25,988
Cash flows from investing activities:
Acquisitions, net of cash acquired		(238,943	)		—			—			(238,943	)
Purchases of property and equipment		(2,772	)		(1,324	)		(2,401	)		(2,772	)
Purchases of marketable investments		—			(11,604	)
Proceeds from sales and maturities of marketable investments		—			11,500
Net cash used in investing activities		(241,715	)		(1,428	)		(2,401	)		(241,715	)
Cash flows from financing activities:
Proceeds from borrowings, net of costs		171,275			—			—			171,275
Payments on borrowings		(21,563	)		—			(16,344	)		(21,563	)
Payment of debt issuance costs		(857	)		—			—			(857	)
Deferred acquisition payments		(766	)		—			—			(766	)
Dividends paid on common stock		—			(3,611	)
Repurchases of common stock		—			(4,367	)
Proceeds from issuance of common stock under employee equity incentive plans		3,361			2,530			1,955			3,361
Taxes paid related to net share settlements of stock-based compensation awards		(89	)		(66	)		(902	)		(89	)
Net cash provided by (used in) financing activities		151,361			(5,514	)		(15,291	)		151,361
Effect of exchange rate changes on cash, cash equivalents and restricted cash		438			1,420			(2,683	)		438
Net change in cash, cash equivalents and restricted cash		(63,928	)		2,283			1,448			(63,928	)
Cash, cash equivalents and restricted cash, beginning of period		140,296			79,790			69,192			140,296
Cash, cash equivalents and restricted cash, end of period	$	76,368		$	82,073		$	70,640		$	76,368
Supplemental disclosure of cash flow information:
Cash paid for interest	$	1,948			—		$	1,286		$	1,948
Cash paid for income taxes	$	849		$	669		$	1,356		$	849

Non-cash financing activities for the three months ended March 31, 2019 include $3.7 million of debt issuance costs deducted directly from the proceeds of borrowings by the lender. Refer to Note 34 – 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 generally accepted accounting principles ~~generally accepted~~ in the United States of America (“GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for reporting on Form 10-Q. Accordingly, certain information and footnote disclosures required for complete financial statements are not included herein. The year-end balance sheet data was derived from audited financial statements, but does not include all disclosures required by ~~accounting principles generally accepted in the United States of America.~~GAAP. It is recommended that these financial statements be read in conjunction with the consolidated financial statements and related notes that appear in the Forrester Research, Inc. (“Forrester”) Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2019. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair statement of the financial position, results of operations, comprehensive 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, ~~2019~~2020 may not be indicative of the results for the year ending December 31, ~~2019,~~2020, or any other period.

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

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

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

The Company assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably ~~approximate their fair values because~~available to it and the ~~rates~~unknown future impacts COVID-19 as of ~~interest on those borrowings reflect current market rates~~March 31, 2020 and through the date of ~~interest. See Note 5 –~~ ~~Fair Value Measurements,~~this report. The accounting matters assessed included, but were not limited to, the allowance for expected credit losses, the carrying value of our goodwill and other long-lived assets, valuation allowances for tax assets and revenue recognition. While there was not a material impact to the consolidated financial statements as of and for the ~~fair value~~quarter ended March 31, 2020 resulting from the Company’s assessments, the Company’s future assessment of its current expectations of the ~~Company’s assets~~magnitude and ~~liabilities.~~duration of COVID-19, as well as other factors, could result in material impacts to its consolidated financial statements in future reporting periods.

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

In ~~February~~June 2016, the Financial Accounting Standards Board ~~(FASB)~~(“FASB”) issued Accounting Standards Update (“ASU”) No. ~~2016-02,~~2016-13, ~~Leases~~Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments ~~(Topic 842)~~(“Topic 326”). The standard ~~requires lessees~~amends the existing financial instrument incurred loss impairment model by requiring entities to ~~recognize the assets~~use a forward-looking approach based on expected losses and ~~liabilities from leases~~to consider a broader range of reasonable and supportable information to estimate credit losses 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 patterncertain types of ~~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 lease and non-lease components within a contract.~~

financial instruments, including trade receivables. On January 1, ~~2019,~~2020, the Company adopted ~~Topic 842~~the standard using the modified retrospective method in which prior periods are not ~~adjusted. Under this method, the~~adjusted and recorded a cumulative effect adjustment of ~~applying~~$0.2 million to decrease retained earnings. Expected losses are based, in part, on the ~~standard~~Company’s historical loss rate experience as well as management’s expectations of future losses as informed by current economic conditions.

The allowance for expected credit losses on accounts receivable for the three months ended March 31, 2020 is ~~recorded at the date of initial application. Adoption of the~~summarized as follows (in thousands):

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

The Company adopted the guidance in ASU No. 2018-13, Fair Value Measurement Disclosure Framework – Changes to the 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 liabilitiesDisclosure Requirements for Fair Value Measurement on January 1, 2020. The new standard modifies the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, including changes to fair value transfers and Level 3 ~~2019 as~~fair value measurements. Changes required upon adoption of this standard are included in Note 8 – Fair Value Measurements and did not impact the Company’s financial position or results of operations.

The Company adopted the guidance in ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a ~~result~~Cloud Computing Arrangement That is a Service Contract on January 1, 2020. The new standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The adoption of ~~the acquisition of SiriusDecisions (see to Note 2 –~~ ~~Acquisitions). Adoption of the~~this standard did not have a material impact on the Company’s financial position or results of ~~operations or cash flows.~~operations.

The Company elected the package of practical expedients permitted under the new lease standard that allowed the carry forward of the historical lease classification for all leases that existed as of the adoption date. 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 lease at inception. The Company accounts for a lease when it has the right to control the leased asset for a period of time while obtaining substantially all of the 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~~In December 2019, the FASB issued ASU No. 2019-12, Income Taxes – Simplifying the Accounting for Income Taxes. The new standard provides guidance to simplify the accounting for income taxes in certain areas, changes the accounting for select income tax transactions and makes other minor improvements. The new standard will be effective for the Company on January 1, 2021. The Company is currently evaluating the potential impact that this standard may have on its financial position and results of ~~March 31, 2019 are as follows (in thousands):~~

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

~~The Company~~Forrester accounts for business combinations in accordance with the acquisition method of accounting as prescribed by ~~Accounting~~Accounts Standards Codification (“ASC”) Topic 805, Business Combinations (“Topic 805”).��The acquisition method of accounting requires the Company to record the assets and liabilities acquired based on their estimated fair values as of the acquisition date, with any excess of the consideration transferred over the estimated fair value of the net assets acquired, including identifiable intangible assets, to be recorded to goodwill.

On July 6, 2018, Forrester acquired 100% of the issued and outstanding shares of S.NOW SA, a Switzerland-based business that operates as FeedbackNow. FeedbackNow is a maker of physical buttons and monitoring software that companies deploy to measure, analyze, and improve customer experience. The acquisition is part of Forrester's plan to build a real-time CX cloud solution. FeedbackNow provides a high-volume input source for the real-time CX cloud solution. The Company paid $8.4 million on the closing date. An additional $1.5 million is payable during a two-year period from the closing date and is subject to typical indemnity provisions from the seller. The Company also paid additional purchase price based on the acquired working capital of $0.8 milliondid not have any business combinations during the three months ended March 31, 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.2020.

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~~SiriusDecisions equips business-to-business (B2B) sales, marketing, and product leaders with the ~~combination of its expertise in strategy with SiriusDecisions’ focus on~~actionable research, frameworks, tools, operational ~~excellence will create additional market~~benchmarks and expert advice they need to maximize performance and drive alignment. The acquisition creates several opportunities for the Company, including cross-selling services to the Company’s respective client bases, extending SiriusDecisions’ platform, methodologies, data, and best-practices tools into new roles, and accelerating international and industry growth. The acquisition of SiriusDecisions was determined to be an acquisition of a business under the provisions of ~~ASC~~Topic 805.

Pursuant to the terms of the merger agreement, the Company paid ~~$247.3~~$246.8 million at closing after certain transaction expense adjustments, which iswas 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~~a 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.adjustment.

~~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):~~

The allocation of the purchase price for SiriusDecisions is preliminary with respect to the 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 end of 2019.

~~The Company’s financial statements include the operating results of SiriusDecisions beginning on January 3, 2019, the date of the acquisition. SiriusDecision’s~~SiriusDecisions’ operating results and the related goodwill are ~~being~~ reported ~~as its own operating segment (refer to Note 11 –~~ ~~Operating Segments). The goodwill is not deductible for income tax purposes.~~ The acquisition of SiriusDecisions added approximately $15.2 million of additional revenue and $24.9 million of direct expenses including intangible amortization for the three months ended March 31, 2019. Had the Company acquired SiriusDecisions in prior periods,within the Company’s ~~operating results would have been materially different,~~Products and Research segments, as ~~a result the following unaudited pro forma financial information is presented as if SiriusDecisions had been acquired by the Company~~realigned on January 1, ~~2018 (in thousands, except per share amounts):~~

~~The pro forma results have been prepared~~2020 and further discussed in ~~accordance with U.S. GAAP and include~~Note 14 – Operating Segments. During the ~~following pro forma adjustments for~~year ended December 31, 2019, the ~~three months ended March 31, 2018: (1) an increase in interest expense and amortization of debt issuance costs related to~~Company finalized the ~~financing of the SiriusDecisions acquisition (refer to Note 3 –~~ ~~Debt~~ ~~for further information on the Company’s borrowings related to the acquisition); (2) a decrease in revenue as a result of 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~~related accounting 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.

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

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

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

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

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

In connection with the acquisition of SiriusDecisions, on January 3, 2019 (the “Closing Date”) the Company entered into a $200.0 million ~~Credit Agreement on January 3, 2019~~credit agreement (the ~~“Closing Date”~~“Credit Agreement”). The Credit Agreement provides for: (1) senior secured term loans in an aggregate principal amount of $125.0 million (the “Term Loans”) and (2) a senior secured revolving credit facility in an aggregate principal amount of $75.0 million (the “Revolving Credit Facility~~” 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.~~Credit Agreement. The ~~Facilities are~~Credit Agreement is scheduled to mature on January 3, 2024.

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

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

Amounts borrowed under the ~~Facilities~~Credit Agreement bear interest, at Forrester’s option, at a rate per annum equal to either (i) ~~the London Interbank Offering Rate (“LIBOR”~~)LIBOR for the applicable interest period plus a margin that is between 1.75% and 2.50% based on Forrester’s consolidated total leverage ratio or (ii) the alternate base rate plus a margin that is between 0.75% and 1.50% based on Forrester’s consolidated total leverage ratio. In addition, the Company ~~will pay~~pays a commitment fee ~~equal to~~that is between 0.25% and 0.35% per annum, based on Forrester’s consolidated total leverage ratio, on the average daily unused portion of the Revolving Credit Facility, payable quarterly, in arrears. ~~The commitment fee may decrease to 0.30% or 0.25% based on Forrester’s consolidated total leverage ratio.~~

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

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

As of March 31, 2020, $0.9 million in letters of credit were issued under the Revolving Credit Facility.

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

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

The ~~Facilities contain~~Credit Agreement contains certain customary restrictive loan covenants, including among others, financial covenants that apply a maximum leverage ratio and minimum fixed charge coverage ratio. The maximum leverage ratio is based on total debt outstanding at the measurement date divided by EBITDA (as defined in the Credit Agreement) and the fixed charge coverage ratio is based upon EBITDA, as defined, less capital expenditures, as a ratio to certain fixed charges, including Term Loan amortization, cash interest expense and cash taxes. The negative covenants limit, subject to various exceptions, the Company’s ability to incur additional indebtedness, create liens on assets, merge, consolidate, liquidate or dissolve any part of the Company, sell assets, pay dividends or other payments in respect to capital stock, change fiscal year, or enter into certain transactions with affiliates and subsidiaries. The ~~first covenant reporting period was March 31, 2019 and the Company was in full compliance. The Facilities~~Credit Agreement also ~~contain~~contains customary events of default, representations, and warranties.

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

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

~~Note 4 — Accumulated Other Comprehensive Loss~~All of the Company’s leases are operating leases, the majority of which are for office space. Operating lease right-of-use (“ROU”) assets and non-current operating lease liabilities are included as individual line items on the Consolidated Balance Sheets, while short-term operating lease liabilities are recorded within accrued expenses and other current liabilities. Leases with an initial term of twelve months or less are not recorded on the Consolidated Balance Sheets and are not material.

The components of ~~accumulated other comprehensive loss~~lease expense were as follows (in thousands):

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

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

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
)

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

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 classifiedLease balances 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 and liabilities that2020 are ~~measured at fair value on a recurring basis~~as follows (in thousands):

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
)

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

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

Level 3 liabilities at March 31, 2019 consist entirely of the contingent purchase price related to the acquisition of FeedbackNow. Changes in the fair value of Level 3 contingent consideration for the three months ended March 31, 2019 were as follows (in thousands):

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

The Company’s ~~non-marketable investments at March 31, 2019~~leases do not contain residual value guarantees, material restrictions or covenants, and all sublease transactions are ~~being accounted for using the equity method as the investments are limited partnerships and the~~not material. The Company ~~has an ownership interest in excess~~incurred $1.4 million of ~~5% and, accordingly, the Company records its share of the investee’s operating results each period. Losses from non-marketable investments were immaterial~~ROU asset impairments during the three months ended March 31, ~~2019~~2020 related to facility leases from the SiriusDecisions, Inc. acquisition and ~~March 31, 2018. Losses~~ are ~~included~~recorded in ~~losses on investments, net~~acquisition and integration costs in the Consolidated Statements of Operations.

During the three months ended March 31, ~~2019~~2020, the Company entered into several operating leases for office space which do not commence until later in 2020. These operating leases, which aggregated $17.2 million of undiscounted lease payments, have lease terms of up to ten years. Additionally, the Company could receive a variable incentive payment from its landlord to terminate one of its office space leases early. The range of possible incentive payments is zero to $3.5 million, would be received in late 2020 or the first half of 2021, and ~~March 31, 2018, no distributions were received from~~is dependent on the ~~funds.~~Company’s ability to exit the existing facility by the proposed early termination dates.

Accounts receivable includes amounts billed and currently due from customers. Since the only condition for payment of our invoices is the passage of time, the Company records a receivable on the date the invoice is issued. Also included in accounts receivable are unbilled amounts resulting from revenue exceeding the amount billed to the customer, where the right to payment is unconditional. If the right to payment for services performed was conditional on something other than the passage of time, the unbilled amount would be recorded as a separate contract asset. There were no contract assets as of March 31, ~~2019~~2020 or ~~2018.~~2019.

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

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

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

~~During~~The Company recognized revenue of $69.9 and $58.1 million during the three months ended March 31, 2020 and 2019, ~~the Company recognized approximately $58.1 million of revenue~~respectively, 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~~beginning of ~~revenue related to its deferred revenue balance at January 1, 2018.~~each such period. To determine revenue recognized in ~~the current~~each such period from deferred revenue at the beginning of the period, the Company first allocates revenue to the individual deferred revenue balance outstanding at the beginning of the period, until the revenue equals that balance.

Approximately ~~$357.9~~$343.6 million of revenue is expected to be recognized during the next 12 to 24 months from remaining performance obligations as of March 31, ~~2019.~~2020.

The Company capitalizes commissions paid to internal sales representatives and related fringe benefits costs that are incremental to obtaining customer contracts. These costs are included in deferred commissions on the Consolidated Balance Sheets. The Company accounts for these costs at a portfolio level as the Company’s contracts are similar in nature and the amortization model used closely matches the amortization expense that would be recognized on a contract-by-contract basis. Costs to obtain a contract are amortized to operations as the related revenue is recognized over the initial contract term. Amortization expense related to deferred commissions was ~~$7.2~~$8.1 million and ~~$7.1~~$7.2 million for the three months ended March 31, ~~2019~~2020 and ~~March 31, 2018,~~2019, respectively. The Company evaluates the recoverability of deferred commissions at each balance sheet date.

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

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

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

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

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

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

The carrying amounts reflected in the Consolidated Balance Sheets for cash, accounts receivable, accounts payable, and accrued expenses (excluding the contingent consideration discussed below) approximate fair value due to their short-term maturities. The Company’s financial instruments also include its outstanding variable-rate borrowings (refer to Note 4 – Debt). 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.

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

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

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

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

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

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

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

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

During the three months ended March 31, 2020 and 2019, the Company did not transfer assets or liabilities between levels of the fair value hierarchy. Additionally, there have been no changes to the valuation techniques for Level 2 or Level 3 liabilities.

Level 3 liabilities at March 31, 2020 consist entirely of the contingent purchase price related to the acquisition of FeedbackNow. Changes in the fair value of Level 3 contingent consideration for the three months ended March 31, 2020 were as follows (in thousands):

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

Income tax expense for the three months ended March 31, 2020 was $19 thousand resulting in an effective tax rate of negative 3.8% for the period. Income tax benefit for the three months ended March 31, 2019 was $0.2 million resulting in an effective tax rate of 1.7% for the period. ~~The Company 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~~2020 will be approximately ~~5% due~~10% to 15%.

On March 27, 2020, Congress enacted the Coronavirus Aid, Relief and Economic Security ("CARES") Act to provide certain relief as a ~~projected pretax loss for~~result of the ~~year. Income tax benefit for~~COVID-19 outbreak. The Company is currently evaluating the ~~three months ended March 31, 2018 was $0.7 million resulting~~potential impact that the provisions in ~~an effective tax rate~~the CARES may have on its financial position and results of ~~28.7% for the period.~~operations.

~~In July 2015, the U.S. Tax Court issued an opinion in Altera Corp. v. Commissioner related to the treatment~~Note 10 — Accumulated Other Comprehensive Loss

The components 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 Ninth Circuit is reviewing the case and a final decision is yet to be issued. The Company will continue to monitor ongoing developments and potential impacts to its consolidated financial statements.accumulated other comprehensive loss are as follows (in thousands):

Basic net loss per common share is computed by dividing net loss by the basic weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed by dividing net 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						Three Months Ended March 31, 2020
	Common Stock				Additional					Treasury Stock					Other						Common Stock									Treasury Stock					Accumulated
	Number of		$0.01 Par		Paid-in		Retained			Number of					Comprehensive			Total			Number of Shares		$0.01 Par Value		Additional Paid-in Capital		Retained Earnings			Number of Shares		Cost			Other Comprehensive Income (Loss)			Total Equity
	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
Balance at December 31, 2019																						23,275	$	233	$	216,454	$	118,147			4,631	$	(171,889	)	$	(4,857	)	$	158,088
Issuance of common stock under stock plans, net																						114		1		1,052		—			—		—			—			1,053
Stock-based compensation expense		—		—		2,685		—			—		—			—			2,685			—		—		2,802		—			—		—			—			2,802
Cumulative effect adjustment due to adoption of new accounting pronouncement, net of tax of $61																						—		—		—		(157	)		—		—			—			(157	)
Net loss		—		—		—		(13,316	)		—		—			—			(13,316	)		—		—		—		(513	)		—		—			—			(513	)
Net change in interest rate swap, net of tax of $462																						—		—		—		—			—		—			(1,181	)		(1,181	)
Foreign currency translation		—		—		—		—			—		—			(430	)		(430	)		—		—		—		—			—		—			(1,920	)		(1,920	)
Balance at March 31, 2019		23,050	$	231	$	206,655	$	114,401			4,631	$	(171,889	)	$	(5,584	)	$	143,814
Balance at March 31, 2020																						23,389	$	234	$	220,308	$	117,477			4,631	$	(171,889	)	$	(7,958	)	$	158,172

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

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

Restricted stock unit activity for the three months ended March 31, ~~2019~~2020 is presented below (in thousands, except per share data):

Stock option activity for the three months ended March 31, ~~2019~~2020 is presented below (in thousands, except per share data and contractual term):

Weighted -

Weighted -

Average

Average

Exercise

Remaining

Aggregate

Number

Price Per

Contractual

Intrinsic

of Shares

Share

Term (in years)

Value

Outstanding at December 31, 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

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

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

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

As a result of the acquisition of SiriusDecisions on January 3, 2019 (see Note 2 – Acquisitions), and the related debt incurred to fund the acquisition (see Note 4 – Debt), the Company suspended its ~~dividend~~dividends program in ~~November 2018. Accordingly, the~~2019. The Company did not declare or pay any ~~dividend~~dividends in the three months ended March 31, ~~2019. In the three months ended~~2020 and March 31, ~~2018, the Company declared and paid dividends of $0.20 per share or $3.6 million in the aggregate.~~2019, respectively.

As of March 31, ~~2019,~~2020, Forrester’s Board of Directors had authorized an aggregate $535.0 million to purchase common stock under its stock repurchase program. The shares repurchased may be used, among other things, in connection with Forrester’s equity incentive and purchase plans. In the three months ended March 31, 2020 and 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.~~ From the inception of the program through March 31, ~~2019,~~2020, the Company repurchased 16.3 million shares of common stock at an aggregate cost of $474.9 million.

At March 31, 2020 and December 31, 2019, the carrying value of the Company’s non-marketable investments, which were composed of interests in technology-related private equity funds, was $2.5 million, and is included in other assets in the Consolidated Balance Sheets.

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

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

The Products segment includes the revenues of the Connect, Analytics, and Events products ~~(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~~and the related cost of the Company’s project consulting ~~organization that is included in this segment.~~organization. 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.

The Research segment includes the revenues of the Research products and the cost of the organizations responsible for developing and delivering the Company’s Research ~~products (excluding the costs and revenues from SiriusDecisions products).~~products. In addition, this segment includes Consulting revenues primarily from the delivery of advisory services (such as workshops, speeches and advisory days) delivered by the Company’s 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 marketing, technology development and business support departments of the 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,~~excludes 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 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~~provides disaggregated revenue by product in the segment tables below (in thousands)~~. The 2018 amounts have been reclassified to conform to the 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
)

	Products			Research			Consolidated
Three Months Ended March 31, 2020
Research services revenues
Research	$	—		$	53,606		$	53,606
Connect		13,889			—			13,889
Analytics		5,301			—			5,301
Total research services revenues		19,190			53,606			72,796

Advisory services and events revenues
Consulting		20,638			12,821			33,459
Events		90			—			90
Total advisory services and events revenues		20,728			12,821			33,549
Total segment revenues		39,918			66,427			106,345
Segment expenses		(19,378	)		(18,784	)		(38,162	)
Selling, marketing, administrative and other expenses								(59,875	)
Amortization of intangible assets								(4,712	)
Acquisition and integration costs								(2,875	)
Interest expense, other income and gain on investments								(1,215	)
Loss before income taxes							$	(494	)

	Products		Research		SiriusDecisions		Consolidated			Products			Research			Consolidated
Three Months Ended March 31, 2018
Three Months Ended March 31, 2019
Research services revenues
Research	$	—	$	34,643	$	—	$	34,643		$	—		$	49,780		$	49,780
Connect		12,564		—		—		12,564			13,571			—			13,571
Analytics		4,493		—		—		4,493			5,258			—			5,258
Total research services revenues		17,057		34,643		—		51,700			18,829			49,780			68,609

Advisory services and events revenues
Consulting		14,407		11,642		—		26,049			18,885			12,902			31,787
Events		—		—		—		—			253			—			253
Total advisory services and events revenues		14,407		11,642		—		26,049			19,138			12,902			32,040
Total segment revenues		31,464		46,285		—		77,749			37,967			62,682			100,649
Segment expenses		16,056		13,411		—		29,467			(19,948	)		(20,397	)		(40,345	)
Contribution margin		15,408		32,874		—		48,282
Selling, marketing, administrative and other expenses								(50,384	)								(62,011	)
Amortization of intangible assets								(186	)								(6,210	)
Acquisition and integration costs								—									(2,967	)
Other expense and loss on investments								(143	)
Interest expense, other income and loss on investments																	(2,658	)
Loss before income taxes							$	(2,431	)							$	(13,542	)

~~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, payments pursuant to existing acquisition agreements, acquisition and integration costs, future dividends, future share repurchases, future growth rates and operating income, future compliance with financial covenants under our credit facility, anticipated increases in, and productivity of, our sales force and headcount, ~~changes to our customer engagement model,~~ and the adequacy of our cash and cash flows to satisfy our working capital and capital expenditures. These statements are based on our current plans and expectations and involve risks and uncertainties that could cause actual future activities and results of operations to be materially different from those set forth in the forward-looking statements. Important factors that could cause actual future activities and results to differ include, among others, our ability to retain and enrich ~~memberships for~~subscriptions to, and licenses of, our ~~research, connect~~Research, Connect, and ~~analytics services,~~Analytics products, our ability to fulfill existing or generate new ~~project~~advisory and consulting engagements, our ability to ~~integrate~~generate and increase demand for our Events we host, technology spending, our ability to mitigate the ~~operations~~adverse impact from the widespread outbreak of ~~acquired companies, the impact of~~COVID-19 which could disrupt or restrict our ~~outstanding debt, the impact of~~ability to sell or fulfill, or reduce demand for, our ~~evolving customer engagement model, technology spending,~~products, services, and events, the risks and challenges inherent in international business activities including any impact of Brexit, our ability to offer new products and services, our dependence on key personnel, ~~the~~our ability to attract and retain qualified professional staff, our ability to respond to business and economic conditions and market trends, our ability to integrate the operations of acquired companies, the impact of our outstanding debt, the possibility of network disruptions and security breaches, competition and industry consolidation, our ability to enforce and protect our intellectual property rights, compliance with privacy laws, possible variations in our quarterly operating results, taxation risks, concentration of our stock ownership and any weakness identified in our system of internal controls. These risks are described more completely in our Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2019 and in Item 1A of Part II of this Quarterly Report on Form 10-Q for the year ended March 31, 2020. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.

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

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

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

We derive revenues from ~~memberships of~~subscriptions to our Research, Connect and Analytics products and services, licensing electronic “reprints” of our Research, performing ~~Consulting~~advisory 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~~Subscription products are recognized as revenue ratably over the term of the contract. Accordingly, a substantial portion of our billings are initially recorded as deferred revenue. Reprints include an obligation to deliver a customer-selected research document and certain usage data provided through an on-line platform, which represents two performance obligations. We recognize revenue for the performance obligation for the data portion of the reprint ratably over the license term. We recognize revenue for the performance obligation for the research document at the time of providing access to the document. Billings for licensing of reprints are initially recorded as deferred revenue. Clients purchase ~~Consulting services (includes~~ advisory ~~services~~ and consulting ~~projects)~~services independently and/or to supplement their ~~memberships~~access to our subscription-based products. Billings attributable to advisory services and consulting projects are initially recorded as deferred revenue. Advisory 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~~Advisory service revenues, such as workshops, speeches and advisory days, are recognized when the service is complete or the customer receives the agreed upon deliverable. Billings attributable to advisory services and consulting projects are initially recorded as deferred revenue. Events revenues consist of ticket or sponsorship sales for a Forrester-hosted event. Billings for Events are also initially recorded as deferred revenue and are recognized as revenue upon completion of each Event.

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~~includes all client relationships ~~(except~~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.~~tickets. Dollar retention and enrichment are ~~now~~ calculated at a client account level ~~in comparison to a contract level in the prior calculation. This~~which results in a broader view of dollar retention and enrichment as it includes virtually all products in the calculations (except for web-based products mentioned above) and captures all enrichment that occurs within the year for an account. ~~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, provide a significant measure of our business activity.

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
	2019			2018			(Decrease)			(Decrease)			2020			2019			(Decrease)			(Decrease)
Deferred revenue	$	191.6		$	155.4		$	36.2			23	%	$	195.4		$	191.6		$	3.8			2	%
Agreement value	$	345.3		$	246.4		$	98.9			40	%	$	354.9		$	345.3		$	9.6			3	%
Client retention		72	%		71	%		1			1	%		69	%		72	%		(3	)		(4	%)
Dollar retention		90	%		90	%		—			—			89	%		90	%		(1	)		(1	%)
Enrichment		106	%		110	%		(4	)		(4	%)		102	%		106	%		(4	)		(4	%)
Number of clients		2,850			2,349			501			21	%		2,805			2,850			(45	)		(2	%)

~~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, ~~2019~~2020 increased ~~23%~~2% compared to the prior year, with 4% of the increase due to the fair value adjustment of pre-acquisition deferred revenue that reduced deferred revenue in the prior year, and a 2% decrease primarily due to ~~the acquisition of SiriusDecisions. Excluding the effect of SiriusDecisions, deferred revenue increased approximately 3% as~~a reduction in contract billings ~~exceeded revenue for~~during the ~~period.~~three months ended March 31, 2020. Agreement value increased ~~40%~~3% at March 31, ~~2019~~2020 compared to the prior year ~~with approximately 28 percentage points of growth~~ due primarily to ~~the acquisition of SiriusDecisions and the remainder due to both an increase in contract bookings and~~ increased bundling of Consulting services with our Research and Connect products in our contracts. Client retention rate ~~increased 1~~decreased 3 percentage ~~point~~points compared ~~with both the prior quarter and with~~to the prior year period. Dollar retention rate ~~was flat with both the prior quarter and~~decreased 1 percentage point compared to the prior year period. Enrichment rate decreased 4 percentage points compared to the prior year period. Retention and ~~3 percentage points compared to~~enrichment rates were negatively affected by a decrease in contract bookings experienced in March of 2020 as the ~~prior quarter period.~~economic effects of COVID-19 became widespread in Europe and North America.

Management’s discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles ~~generally accepted~~ in the United States of America (“GAAP”). The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our policies and estimates, including but not limited to, those related to our revenue recognition, ~~non-marketable investments,~~leases, goodwill, intangible and other ~~intangible~~long-lived assets, and income taxes. Management bases its estimates on historical experience, data available at the time the estimates are made and various ~~other~~ assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other

sources. Actual results may differ from these estimates under different assumptions or conditions. Our ~~other~~ critical accounting policies and estimates are described in our Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2019.

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

	Three Months Ended						Three Months Ended
	March 31,						March 31,
	2019			2018			2020			2019
Revenues:
Research services		68.2	%		66.5	%		68.5	%		68.2	%
Advisory services and events		31.8			33.5			31.5			31.8
Total revenues		100.0			100.0			100.0			100.0
Operating expenses:
Cost of services and fulfillment		44.8			43.9			40.8			44.8
Selling and marketing		41.8			42.5			37.9			41.8
General and administrative		13.1			13.8			11.3			13.1
Depreciation		2.0			2.5			2.2			2.0
Amortization of intangible assets		6.2			0.2			4.4			6.2
Acquisition and integration costs		2.9			—			2.7			2.9
Loss from operations		(10.8	)		(2.9	)
Income (loss) from operations								0.7			(10.8	)
Interest expense		(2.3	)		—			(1.4	)		(2.3	)
Other expense, net		(0.3	)		(0.2	)
Losses on investments, net		—			—
Other income (expense), net								0.2			(0.3	)
Gain (loss) on investments, net								—			—
Loss before income taxes		(13.5	)		(3.1	)		(0.5	)		(13.5	)
Income tax benefit		(0.3	)		(0.9	)
Income tax expense (benefit)								—			(0.3	)
Net loss		(13.2	%)		(2.2	%)		(0.5	%)		(13.2	%)

	Three Months Ended						Absolute			Percentage			Three Months Ended						Absolute			Percentage
	March 31,						Increase			Increase			March 31,						Increase			Increase
	2019			2018			(Decrease)			(Decrease)			2020			2019			(Decrease)			(Decrease)
	(dollars in millions)												(dollars in millions)
Revenues	$	100.6		$	77.7		$	22.9			29	%	$	106.3		$	100.6		$	5.7			6	%
Revenues from research services	$	68.6		$	51.7		$	16.9			33	%	$	72.8		$	68.6		$	4.2			6	%
Revenues from advisory services and events	$	32.0		$	26.0		$	6.0			23	%	$	33.5		$	32.0		$	1.5			5	%
Revenues attributable to customers outside of the U.S.	$	22.4		$	18.8		$	3.6			19	%	$	21.4		$	22.4		$	(1.0	)		(4	%)
Percentage of revenue attributable to customers outside of the U.S.		21	%		24	%		(3	)		(13	%)		20	%		21	%		(1	)		(5	%)
Number of events		2			—			2			100	%		—		2				(2	)		(100	%)

Total revenues increased ~~29%~~6% during the three months ended March 31, ~~2019~~2020 compared to the prior year ~~period, with SiriusDecisions contributing $15.2 million or 19.5%~~period. Approximately 4% of the ~~increase.~~growth was due to the fair value adjustment of pre-acquisition deferred revenue that reduced revenues during the three months ended March 31, 2019. Revenues from customers outside the U.S. ~~increased 19%~~ decreased 4% during the three months ended March 31, ~~2019 compared to the prior year period. The increase in revenues attributable to customers outside of the U.S. during the three months ended March 31, 2019~~2020 which was primarily due to ~~the acquisition of SiriusDecisions, which added $2.5 million in international revenue, and growth~~a decrease in revenues in Canada and the ~~Asia Pacific region in the legacy Forrester business.~~United Kingdom.

Research services revenues are recognized as revenue primarily on a ratable basis over the term of the contracts, which are generally twelve-month periods. Research services revenues increased ~~33%~~6% during the three months ended March 31, ~~2019~~2020 compared to the prior year period, ~~with SiriusDecisions contributing $13.8 million or 27% of the increase. The remainder of the increase~~which was primarily driven by ~~an increase~~growth in ~~demand for~~Research and Connect products. Approximately 5% of the ~~legacy Forrester Research products.~~growth was due to the fair value adjustment of pre-acquisition deferred revenue that reduced revenues during the three months ended March 31, 2019.

Revenues from advisory services and events increased ~~23%~~5% during the three months ended March 31, ~~2019~~2020 compared to the prior year period, ~~with SiriusDecisions contributing $1.4 million or 5% of the increase. The remainder of the increase~~which was due to ~~strong delivery~~growth of ~~legacy Forrester~~ Consulting revenues. Approximately 1% of the growth was due to the fair value adjustment of pre-acquisition deferred revenue that reduced revenues during the three months ended March 31, 2019.

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

Cost of services and fulfillment expenses ~~increased 32%~~decreased 4% during the three months ended March 31, ~~2019~~2020 compared to the prior year period. ~~Approximately $8.0 million of the increase was attributable to the acquisition of SiriusDecisions.~~ The ~~$3.0 million increase attributable to legacy Forrester activity~~decrease was primarily due to ~~(1)~~ a ~~$1.3~~$2.6 million ~~increase~~decrease in compensation and benefit costs, resulting principally from a decrease in incentive bonuses due to the cost-reduction measures implemented as a result of the impact of the COVID-19 pandemic, partially offset by an increase in ~~employees compared to the prior year period~~headcount and ~~annual~~ merit increases, ~~(2)~~and a ~~$0.5~~$0.6 million decrease in travel and entertainment expenses. These decreases were partially offset by a $1.6 million increase in professional services costs ~~primarily due to an increase in outsourcing of services performed on our revenue contracts, (3)~~ ~~a $0.4 million increase~~ ~~in travel and entertainment expenses, and (4) a $0.4 million increase in stock compensation expense.~~.

Selling and marketing expenses ~~increased 27%~~decreased 4% during the three months ended March 31, ~~2019~~2020 compared to the prior year period. ~~Approximately $8.4 million of the increase was attributable to the acquisition of SiriusDecisions.~~ The ~~$0.6 million increase attributable to legacy Forrester activity~~decrease was primarily due to (1) a ~~$0.5~~$1.1 million ~~increase~~decrease in travel and entertainment ~~expenses.~~expenses, and (2) a $0.7 million decrease in compensation and benefit costs, resulting principally from a decrease in incentive bonuses due to the cost-reduction measures implemented as a result of the impact of the COVID-19 pandemic, partially offset by an increase in headcount and merit increases.

General and administrative expenses ~~increased 23%~~decreased 9% during the three months ended March 31, ~~2019~~2020 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~~decrease was primarily due to ~~multiple small increases including an increase~~a $1.1 million decrease in compensation and ~~benefits~~benefit costs, resulting principally from ~~an increase~~a decrease in ~~employees compared~~incentive bonuses due to the ~~prior year period and an increase in professional and subscription services costs.~~cost-reduction measures implemented as a result of the impact of the COVID-19 pandemic.

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

~~Amortization expense~~ increased by ~~$6.0~~$0.4 million during the three months ended March 31, ~~2019~~2020 compared to the prior year period due to ~~our recent acquisitions.~~additional leasehold improvements being put into service.

~~During~~Amortization expense decreased by $1.5 million during the three months ended March 31, ~~2019, we incurred $3.0 million of acquisition~~2020 compared to the prior year period due to certain technology intangible assets becoming fully amortized.

Acquisition and integration ~~costs. The~~ costs ~~consist of~~remained consistent during the ~~direct and incremental costs to acquire and integrate the companies as well as certain fair value adjustments related~~three months ended March 31, 2020 compared 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.prior year period. We expect to incur ~~acquisition and~~ integration costs in a range of ~~$6.5~~$3.5 million to ~~$7.5~~$4.0 million for the year ending December 31, ~~2019.~~2020.

~~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 previous acquisition of SiriusDecisions.

~~Other~~ Interest expense ~~net primarily consists of losses on foreign currency partially offset~~decreased by ~~interest income. The increase in other expense, net of $0.2~~$0.8 million during the three months ended March 31, ~~2019~~ 2020 compared to the prior year period. This decrease was primarily due to lower average outstanding borrowings and lower effective interest rates.

Other income (expense), net primarily consists of gains (losses) on foreign currency and interest income. The increase in other income (expense), net of $0.6 million during the three months ended March 31, 2020 compared to the prior year period was primarily due to a decrease in ~~interest income.~~foreign currency losses.

~~Losses~~Gain (loss) on investments, net primarily represents our share of equity method investment gains and losses from our technology-related investment funds. ~~Losses~~Gain (loss) on investments, net remained essentially consistent during the three months ended March 31, ~~2019~~2020 compared to the prior year period.

Income tax ~~benefit during~~expense for the three months ended March 31, ~~2019 includes a~~2020 was $19 thousand resulting in an effective tax rate of negative 3.8% for the period due to discrete items for the period, primarily tax expense related to the exercise of ~~$0.6 million due to a settlement with U.S. Competent Authority during~~stock options and the ~~period.~~ vesting of restricted stock units. For the full year ~~2019,~~2020, we anticipate that our effective tax rate will be approximately ~~5% due~~10% to ~~a projected pretax loss for the year.~~15%.

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. We previously recorded a tax benefit based on the opinion in the case. Currently the U.S. Court of Appeals for the Ninth Circuit is reviewing the case and a final decision is yet to be issued. We will continue to monitor ongoing developments and potential impacts to our consolidated financial statements.

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

The 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~~and the related cost of our project consulting ~~organization that is included in this segment.~~organization. The project consulting organization delivers a majority of our 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.

The Research segment includes the revenues of the Research products and the cost of the organizations responsible for developing and delivering ~~the~~our Research ~~products (excluding the costs and revenues from SiriusDecisions products).~~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.

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 expense, and ~~losses~~gains (losses) on investments. The accounting policies used by the segments are the same as those used in the consolidated financial statements.

	Products			Research			SiriusDecisions		Consolidated			Products			Research			Consolidated
Three Months Ended March 31, 2019
Three Months Ended March 31, 2020
Research services revenues
Research	$	—		$	36,437		$	13,343	$	49,780		$	—		$	53,606		$	53,606
Connect		13,115			—			456		13,571			13,889			—			13,889
Analytics		5,258			—			—		5,258			5,301			—			5,301
Total research services revenues		18,373			36,437			13,799		68,609			19,190			53,606			72,796

Advisory services and events revenues
Consulting		17,837			12,768			1,182		31,787			20,638			12,821			33,459
Events		27			—			226		253			90			—			90
Total advisory services and events revenues		17,864			12,768			1,408		32,040			20,728			12,821			33,549
Total segment revenues		36,237			49,205			15,207		100,649			39,918			66,427			106,345
Segment expenses		18,177			14,029			9,410		41,616			(19,378	)		(18,784	)		(38,162	)
Contribution margin		18,060			35,176			5,797		59,033
Year over year revenue change		15	%		6	%	N/A			29	%		5	%		6	%		6	%
Year over year expense change		13	%		5	%	N/A			41	%		(3	%)		(8	%)		(5	%)

	Products		Research		SiriusDecisions		Consolidated		Products			Research			Consolidated
Three Months Ended March 31, 2018
Three Months Ended March 31, 2019
Research services revenues
Research	$	—	$	34,643	$	—	$	34,643	$	—		$	49,780		$	49,780
Connect		12,564		—		—		12,564		13,571			—			13,571
Analytics		4,493		—		—		4,493		5,258			—			5,258
Total research services revenues		17,057		34,643		—		51,700		18,829			49,780			68,609

Advisory services and events revenues
Consulting		14,407		11,642		—		26,049		18,885			12,902			31,787
Events		—		—		—		—		253			—			253
Total advisory services and events revenues		14,407		11,642		—		26,049		19,138			12,902			32,040
Total segment revenues		31,464		46,285		—		77,749		37,967			62,682			100,649
Segment expenses		16,056		13,411		—		29,467		(19,948	)		(20,397	)		(40,345	)
Contribution margin		15,408		32,874		—		48,282

Product segment revenues increased ~~15%~~5% during the three months ended March 31, ~~2019~~2020 compared to the prior year period. Connect revenues increased 4%2% driven by ~~our new learning~~the executive program product ~~and~~while Analytics revenues ~~grew 17% due primarily to the FeedbackNow product line.~~increased 1%. Consulting revenues increased ~~24%~~9% driven by ~~healthy backlog entering~~strong consultant delivery. Approximately 1% of the ~~quarter and higher utilization of our consultants.~~ Product segment ~~expenses increased 13%~~growth was due to the fair value adjustment of pre-acquisition deferred revenue that reduced revenues during the three months ended March 31, ~~2019~~2019.

Product segment expenses decreased 3% during the three months ended March 31, 2020 compared to the prior year period. The ~~increase~~decrease in expenses was primarily due to a ~~$1.3~~(1) $1.5 million ~~increase~~decrease in compensation and benefit costs due to a decrease in incentive bonuses due to the cost-reduction measures implemented as a result of the impact of the COVID-19 pandemic, partially offset by an increase in ~~the number of employees as well as~~headcount and merit increases, (2) a ~~$0.5~~ $1.4 million increase in ~~billable expenses~~professional services primarily due to an increase in survey costs and ~~other~~an increase in outsourced services related to revenue delivery, and (3) a $0.4 million decrease in travel and ~~entertainment.~~entertainment expenses.

~~Research~~Research segment revenues increased 6% ~~during~~for the three months ended March 31, ~~2019~~2020 compared to the prior year period. The Research product line increased 5%8% driven by our reprint product, ~~and~~which was offset by a 1% decrease in Consulting revenues ~~increased 10%~~ due to ~~strong~~lower delivery of advisory ~~services and project consulting.~~revenues. Approximately 5% of the Research segment ~~expenses increased 5%~~growth was due to the fair value adjustment of pre-acquisition deferred revenue that reduced revenues during the three months ended March 31, ~~2019~~2019.

Research segment expenses decreased 8% during the three months ended March 31, 2020 compared to the prior year period. The ~~increase~~decrease in expenses was primarily due to ~~an increase~~a $1.5 million decrease in compensation and benefit costs ~~professional services,~~due to a decrease in incentive bonuses due to the cost-reduction measures implemented as a result of the impact of the COVID-19 pandemic, partially offset by an increase in headcount and ~~travel and entertainment.~~merit increases.

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. Research services revenues, which constituted approximately ~~68%~~69% of our revenues during the three months ended March 31, ~~2019,~~2020, are generally renewable annually and are typically payable in advance. We generated cash from operating activities of ~~$26.0~~$21.8 million and ~~$7.8~~$26.0 million during the three months ended March 31, ~~2019~~2020 and ~~2018,~~2019, respectively. The ~~$18.2~~$4.2 million ~~increase~~decrease in cash provided from operations for the three months ended March 31, ~~2019~~ 2020 was primarily attributable to a ~~$33.5~~$5.3 million ~~increase~~reduction in cash generated from ~~working capital, driven by (a) a $23.2 million increase from~~ accounts receivable inand deferred revenue due to ~~strong~~a reduction in contract bookings ~~and collections activity in~~for 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 due to an increase of $7.0 million in accrued income taxes in the current period (which partially offset the non-cash deferred tax expense of $10.5 million). These increases were partially offset by a $15.3 million decrease in net loss combined with the effect of non-cash items, which was due to a $10.5 million deferred tax expense recorded in the current period and increased acquisition and integration costs.period.

During the three months ended March 31, 2020, we used cash in investing activities of $2.4 million for purchases of property and equipment, primarily consisting of software and leasehold improvements. 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~~consisting 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.improvements.

We ~~generated $151.4~~used $15.3 million of cash from financing activities during the three months ended March 31, 2020 primarily due to $16.3 million of repayments of debt that consisted of $14.0 million of discretionary payments on our revolving credit facility and $2.3 million of required repayments of our term loan. We generated $151.4 million of cash in financing activities during the three months ended March 31, 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~~During 2020, we anticipate paying approximately $3.5 million of ~~cash in financing activities during the three months ended March 31, 2018~~ ~~primarily due~~deferred acquisition purchase price (which consists of up to ~~the use of $4.4~~$2.5 million for ~~purchases of our common stock~~a contingent consideration agreement (refer to Note 8 – Fair Value Measurements in the Notes to Consolidated Financial Statements) and ~~and the payment of a $3.6 million quarterly dividend, at $0.20 per share, which were partially offset by $2.5~~$1.0 million of ~~proceeds from~~an indemnity holdback) for the exercise of stock options and our employee stock purchase plan. At March 31, 2019, we had $30.0 million outstanding on our revolving credit facility and plan to use excess cash flow, if any, to continue to make discretionary payments on our revolving credit facility.FeedbackNow acquisition that occurred in 2018. ~~As of March 31, 2019, our remaining stock repurchase authorization was approximately $60.1 million.~~

In connection with the acquisition of SiriusDecisions, we entered into a $200.0 million credit agreement on January 3, ~~2019.~~2019 (the “Credit Agreement”). The ~~credit agreement~~Credit Agreement provides for: (1) senior secured term loans in an aggregate principal amount of $125.0 million (the “Term Loans”) and (2) a senior secured revolving credit facility in an aggregate principal amount of $75.0 million (the “Revolving Credit Facility”). We utilized the full $125.0 million of the Term Loans and $50.0 million of the Revolving Credit Facility to finance a portion of the acquisition of SiriusDecisions and to pay certain fees, costs and expenses incurred in connection with the Term Loans and Revolving Credit Facility. Additional information ~~on this debt~~ is provided in Note 34 – Debt ~~included herein~~in the Notes to Consolidated Financial Statements.

Borrowings under the ~~credit agreement~~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~~the London Interbank Offering Rate (“LIBOR”) based loans. The Term Loans must be prepaid with net cash proceeds of (i) certain debt incurred or issued by us and our restricted subsidiaries and (ii) certain asset sales and condemnation or casualty events, subject to certain reinvestment rights.

Amounts borrowed under the ~~credit agreement~~Credit Agreement bear interest, at our option, at a rate per annum equal to either (i) ~~the London Interbank Offering Rate (“LIBOR”~~)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~~that is between 0.25% and 0.35% per annum, based on our consolidated total leverage ratio, on the average daily unused portion of the Revolving Credit Facility, payable quarterly, in arrears. ~~The commitment fee may decrease~~During 2019, we entered into an interest rate swap contract to ~~0.30% or 0.25% based~~effectively convert the floating base interest rate to a fixed rate on ~~our consolidated total leverage ratio.~~approximately 80% of the outstanding Term Loan principal balance. Additional information is provided in Note 7 – Derivatives and Hedging in the Notes to the Consolidated Financial Statements.

The ~~credit agreement~~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, 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~~Credit Agreement also contains customary events of default, representations, and warranties.

As of March 31, ~~2019,~~2020, we were in compliance with our financial covenants under the Credit Agreement. We currently forecast that we will be in compliance with our financial covenants for at least one year from the issuance of these interim financial statements, after taking into consideration the cost cutting measures implemented during the first quarter of the year. If the impact of COVID-19 is more severe than currently forecasted this may impact our ability to comply with our financial covenants which could have a material adverse effect on our business.

As of March 31, 2020, we had cash and cash equivalents of ~~$75.0~~$69.8 million. ~~These balances include $46.0~~This balance includes $51.8 million held outside of the U.S. If ~~these funds~~the cash outside of the U.S. are needed for operations in the U.S., we would be required to accrue and pay U.S. state taxes and may be required to pay withholding taxes to foreign jurisdictions to repatriate these funds. ~~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 believe that our current cash balance and cash flows from operations will satisfy working capital, financing activities, and capital expenditure requirements for the next twelve months.

There has been a material change to the operating lease payments and purchase commitment lines of the contractual obligations table as disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2018 due to the acquisition of SiriusDecisions that closed on January 3,~~ 2019. As of March 31, ~~2019,~~2020, we have the following ~~new future~~updated contractual obligations (in thousands):

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

See Note 1 ~~and Note 12 of~~– Interim Consolidated Financial Statements in the Notes to Consolidated Financial Statements for a full description of recent accounting pronouncements including the expected dates of adoption and effects on results of operations and financial condition.

~~Except as noted below, there~~There have been no material ~~change~~changes in our assessment of our sensitivity to market risk since our presentation set forth in Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” in our Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2019.

~~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, ~~2019.~~2020. Based upon their evaluation and subject to the foregoing, the principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective to provide reasonable assurance as of that date.

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.

~~There were~~Except as noted below, there was no ~~changes~~change in our internal control over financial reporting (as defined in Rules 13a-15(f) ~~and 15d-15(f) under~~of the Exchange Act) that occurred during the quarter ended March 31, ~~2019 that~~2020, which has materially affected, or is reasonably likely to materially affect, our internal control over financial ~~reporting with respect~~reporting. In response to ~~historical Forrester operations. We are currently in the process of integrating~~COVID-19, we have undertaken measures to protect our ~~acquisition of SiriusDecisions, evaluating its internal controls~~employees, partners, and ~~implementing our internal control structure over its operations, which may lead~~clients, including encouraging employees to work remotely. These changes have compelled us to modify ~~certain internal controls in future periods.~~some of our control procedures. However these changes have so far not been material.

In addition to the other information set forth in this Form 10-Q, you should carefully consider the factors discussed in Part I, “Item 1A: Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, ~~2018,~~2019, which could materially affect our business, financial condition or future results. The risk factors described in our Annual Report on Form 10-K remain applicable to our business. In addition, we are updating the risk factor included in our Annual Report on Form 10-K titled “We Face Risks Related to Health Epidemics That Could Adversely Impact Our Business” as follows.

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

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

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

Through March 31, ~~2019,~~2020, our Board of Directors authorized an aggregate $535.0 million to purchase common stock under our stock repurchase program. During the quarter ended March 31, ~~2019,~~2020, we did not purchase any shares of our common stock under the stock repurchase program. As previously disclosed, subsequent to our acquisition of SiriusDecisions we anticipate continuing to substantially reduce or eliminate repurchases of our common stock during 2020.

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

~~DELAWARE~~Delaware		04-2797789
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)
60 Acorn Park Drive CAMBRIDGE, ~~MASSACHUSETTS~~Massachusetts		02140 (Zip Code)
(Address of principal executive offices)

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


~~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
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	3
	Consolidated Balance Sheets as of March 31, ~~2019~~2020 and December 31, ~~2018~~2019	3
	Consolidated Statements of Operations for the Three Months Ended March 31, ~~2019~~2020 and ~~2018~~2019	4
	Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, ~~2019~~2020 and ~~2018~~2019	5
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, ~~2019~~2020 and ~~2018~~2019	6
	Notes to Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2021
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2829
Item 4.	Controls and Procedures	2829

PART II	OTHER INFORMATION
Item 1A.	Risk Factors	2930
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2930
Item 6.	Exhibits	3031

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


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


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

Large accelerated filer	☐	Accelerated filer	☒

Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

	March 31,				Three Months Ended March 31,
	2019		2018		2020		2019
Cash and cash equivalents	$	75,012	$	82,073	$	69,815	$	75,012
Restricted cash classified in (1):
Prepaid expenses and other current assets		208		—		787		208
Other assets		1,148		—		38		1,148
Cash, cash equivalents and restricted cash shown in statement of cash flows	$	76,368	$	82,073	$	70,640	$	76,368

	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

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

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

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

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

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		March 31, 2020			December 31, 2019
Term loan facility (1)	$	123,438		$	��	$	116,406		$	118,750
Revolving credit facility (1) (2)		30,000			—
Revolving credit facility (2)							—			14,000
Principal amount outstanding (3)		153,438			—		116,406			132,750
Less: Deferred financing fees		(2,679	)		—		(2,048	)		(2,205	)
Net balance sheet carrying amount	$	150,759		$	—
Net carrying amount						$	114,358		$	130,545

				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, 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	)

	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	)

	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	)

							Total
	Net Unrealized Gain			Cumulative			Accumulated
	(Loss) on Interest			Translation			Other Comprehensive
	Rate Swap			Adjustment			Loss
Balance at December 31, 2019	$	(104	)	$	(4,753	)	$	(4,857	)
Foreign currency translation		—			(1,920	)		(1,920	)
Unrealized loss on interest rate swap, net of tax of $462		(1,181	)		—			(1,181	)
Balance at March 31, 2020	$	(1,285	)	$	(6,673	)	$	(7,958	)

				Weighted-					Weighted-
				Average					Average
	Number of			Grant Date		Number of			Grant Date
	Shares			Fair Value		Shares			Fair Value
Unvested at December 31, 2018		497		$	40.89
Unvested at December 31, 2019							656		$	42.94
Granted		162			44.88		15			37.15
Vested		(11	)		40.38		(71	)		44.34
Forfeited		(11	)		41.94		(48	)		43.71
Unvested at March 31, 2019		637		$	41.89
Unvested at March 31, 2020							552		$	42.53

	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		Total		2020		2021		2022		2023		2024		Thereafter
Interest payments - long-term debt (2)	$	24,528	$	4,689	$	5,857	$	5,306	$	4,660	$	3,969	$	47
Operating lease payments (1)															$	106,026	$	12,046	$	15,777	$	15,387	$	14,872	$	14,534	$	33,410
Purchase commitments (2)																8,372		6,632		870		870		—		—		—
															$	114,398	$	18,678	$	16,647	$	16,257	$	14,872	$	14,534	$	33,410

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

~~10.1~~3.2		~~Third~~Certificate of Amendment of the Certificate of Incorporation of Forrester Research, Inc. (see Exhibit 3.1 to Annual Report on Form 10-K for the year ended December 31, 1999)

3.3		Certificate of Amendment to ~~Office Lease dated as~~Restated Certificate of ~~March 12, 2019 between Spear Street Corridor LLC~~Incorporation of Forrester Research, Inc.

3.4		Amended and ~~the Company. (filed herewith)~~Restated By-Laws of Forrester Research, Inc.

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

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

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

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

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

101.INS		XBRL Instance Document. (filed herewith)

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

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

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

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

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

FORRESTER RESEARCH, INC.

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