Forrester Research (FORR) Earnings Date & Reports

Key Takeaways

• Forrester Research reported third-quarter 2026 revenue of $86.1 million, down roughly 9% year over year but above the $81.76 million consensus estimate.
• Adjusted earnings per share (EPS) came in at $0.24, beating the $0.21 analyst consensus, though down from $0.37 in the prior-year quarter.
• GAAP (Generally Accepted Accounting Principles) net loss widened to $4.4 million, or $0.23 per diluted share, versus a $2.1 million loss a year earlier.
• Contract value, a closely watched forward-looking metric, declined 3.5% year over year to $281.9 million, even as client retention improved to 78%.
• Management narrowed its full-year adjusted EPS outlook, raising the low end to $0.77 for a new range of $0.77 to $0.82.
• Forrester's AI-related usage expanded sharply, with prompts up 142% year over year, signaling growing traction in its AI product lineup.
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Earnings Context and Why It Matters

Forrester Research's third-quarter 2026 results offer an important read on the health of the research and advisory industry and on the company's multi-quarter turnaround effort. Revenue has been contracting for several periods, driven by a sharp pullback in consulting work and softer enterprise spending. This report matters because it tests whether management's push into AI-enabled research products and improved client retention can offset a shrinking contract base. Investors are also watching whether the company can hold its full-year guidance while stabilizing contract value, a leading indicator of future subscription revenue. The results delivered a mixed picture: a consensus beat alongside ongoing top-line decline.

Reported Results

Forrester Research posted total revenue of $86.1 million for the third quarter ended September 30, 2026, a decline of about 9% from $94.3 million in the year-ago period, but above the $81.76 million consensus estimate. Research revenue fell 3% to $70.1 million, while consulting revenue dropped 31% to $14.7 million, reflecting continuing market uncertainty and the company's earlier exit from its strategic consulting business.

On an adjusted basis, the company earned $0.24 per diluted share, beating the $0.21 consensus, though down from $0.37 a year ago. Adjusted operating income declined 35% to $6.5 million, with adjusted operating margin contracting to 7.6% from 10.5%. On a GAAP basis, net loss widened to $4.4 million, or $0.23 per diluted share, from $2.1 million, or $0.11 per share, in the prior-year quarter.

Contract value declined 3.5% year over year to $281.9 million, an improvement from the 7% decline in the prior-year period. Retention improved to 89%, up three percentage points, while client retention rose four points to 78%. Management maintained its full-year revenue outlook of $350 million to $360 million and raised the low end of its adjusted EPS guidance to $0.77, for a new range of $0.77 to $0.82.

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Market Reaction and Investor Sentiment

Investor sentiment heading into the report was cautiously optimistic, as FORR shares had risen nearly 49% over the trailing 12 months despite the company's declining revenue. The third-quarter results supported that optimism in the near term: shares moved higher in after-hours trading after the company beat consensus estimates on revenue, margin, and adjusted EPS, while simultaneously narrowing and raising the low end of its full-year earnings outlook.

Still, the reaction reflects a balancing act. Investors weighed the encouraging retention and AI-usage metrics against a persistent decline in contract value and a sharp consulting contraction. The market's willingness to look past the GAAP net loss and focus on the adjusted beat and improved guidance suggests sentiment is leaning toward the view that Forrester's stabilization efforts are gaining traction, even if a full revenue recovery has not yet arrived.

Forward Outlook and Key Factors to Monitor

Following this report, the most important signal to watch is contract value. Management now expects year-end contract value to range from a 2% decline to 2% growth, centered around flat. Because contract value is a leading indicator of future subscription revenue, whether it stabilizes or returns to growth will shape how investors view the company's trajectory into 2027.

Retention metrics are another key area. The improvement to 89% retention and 78% client retention suggests Forrester is doing a better job keeping existing clients, but investors will want to see whether these gains translate into new contract wins. The continued strength in the technology research vertical is a positive, while the consulting segment remains a drag.

AI adoption is an emerging catalyst. Forrester reported that AI prompts increased 142% year over year, and management has pointed to new AI-enabled products and sales initiatives as supports for a return to contract value growth. Finally, cost discipline and capital allocation remain in focus, with management citing share buybacks and careful expense management as reasons it could raise the low end of its EPS guidance. Together, these factors will determine whether the company's stabilization story converts into sustained growth.

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