Challenges and downward trends persist for Forrester, but hope abounds with signs of increased client engagement. Headwinds related to macroeconomic and geopolitical uncertainties pose major challenges for Forrester and its clients. Still, Forrester is confident in its ability to navigate these uncertainties and assist its clients in doing the same.
What You Need to Know
- Forrester’s revenue declined
- Q1 2025 revenue was $89.9 million, a 10% decline from $100.1 million in Q1 2024.
- Research-specific revenue also declined in Q1 2025, an 11% decrease from Q1 2024. Q1 2025 marks the ninth consecutive quarter of decline for research-specific revenue.
- Forrester’s client count stands at 1,822, a 14% decline from Q1 2024.
- Forrester’s total headcount has decreased by 10% from Q1 2024.
- Forrester has maintained their guidance for 2025, projecting that revenue will continue to decline.
- The firm’s guidance is $400 to $415 million for 2025, a decline of 7.5% to 4.0% compared to 2024.
Q1 2025 Metrics
- Total Revenue: $89.9M, down 10% YoY
- Contract Value: $291M, down 7% YoY
- Research Revenue: $68M, down 11% YoY
- Consulting Revenue: $21M, down 7% YoY
- Overall Headcount: 1,510, down 10% YoY
Spotlight Take on Forrester Q1 2025 Earnings
- Dubbed “the AI Research Company”
- Forrester continues to expand their AI research across all FD services, extensively covering both generative AI and agentic AI. Izola, Forrester’s proprietary LLM, has also expanded to include consumer and technographics data and Wave research. George Colony believes Forrester to be the leading AI research company.
- Izola Usage
- A top use case for Izola has been finding vendors and products. Nearly 40% of Izola prompts submitted by Forrester’s technology client executives are about products or vendors in a specific market.
- New Volatility Research Stream
- Forrester launched a new research stream for helping clients manage through volatility, covering personas and topics within B2C and B2B marketing, technology, cybersecurity, and the workforce. This volatility research has been the most read in Forrester’s portfolio over the past month and is the second highest topic in guidance sessions, driving optimism around increased client engagement amidst market volatility.
- Economic and Geopolitical Uncertainty
- Tariffs are driving buyer hesitancy, particularly in APAC and EMEA. Key sectors facing challenges include manufacturing, financial services, retail, and government. Forrester plans for this uncertainty to persist throughout the year, but is not currently accounting for a recession in their yearly guidance.
- Government Contracts:
- The U.S. Federal Government makes up less than 6% of Forrester’s contract value, and several contracts have been cancelled by DOGE. Federal actions have had a small negative impact on earnings, and future contract cancellations will be a headwind. However, Forrester is responding to DOGE disruptions by seeking out client contracts in no-bid markets and by using Forrester’s AI and cybersecurity expertise to appeal to government departments emphasizing these technologies.
- Updated GTM Strategy:
- Forrester is now optimizing their go-to-market motion to match the Forrester Decisions platform. This strategy revolves around reaching higher-level executives and expanding the number of personas served by focusing on team-based licenses over single-seat subscriptions.
- Client Decline Demographics
- Forrester attributes the 14% YoY decline in client count to the loss of small vendor clients with revenues of $50 million or less. George Colony acknowledged that the primary cause of nonretention has been a mismatch between client personas and Forrester products.
