George Colony - Chairman, Chief Executive Officer Michael Morhardt - Chief Sales Officer Michael Doyle - Chief Financial Officer.

Timothy McHugh - William Blair & Company Bill Sutherland - Emerging Growth Equities Allen Klee - Sidoti & Company Vincent Colicchio - Barrington Research Associates.

Good afternoon. Thank you for joining today's call. With me today are George Colony, Forrester's Chairman of the Board and CEO; Michael Morhardt, Forrester's Chief Sales Officer; and Mike Doyle, Forrester's Chief Financial Officer. George will open the call. Mike Morhardt will follow George to discuss sales.

Mike Doyle will then follow Michael Morhardt to discuss our financials. We will then open the call to Q&A. A replay of this call will be available until March 10, 2017 and can be accessed by dialing 1-888-843-7419 or, internationally, 1-630-652-3042.

Please reference the passcode 8392738# Before we begin, I'd like to remind you that this call will contain 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.

These statements are based on the Company's current plans and expectations and involve risks and uncertainties that could cause future activities and results of operations to be materially different from those set forth in the forward-looking statements.

Some of the important factors that could cause actual results to differ as discussed in our reports and filings with the Securities and Exchange Commission. The Company undertakes no obligation to update publicly any forward-looking statements whether as a result of new information, future events or otherwise.

I will now hand the call over to George Colony..

Thanks for joining our first quarter call for 2017. I will give a short brief on the quarter, I will then hand the call over to Mike Morhardt who will outline the state of sales and the customer engagement model our new go to market structure.

Mike Doyle, Forrester’s CFO will give a financial review of the quarter and then the three of us will take questions. In the Age of the Customer companies must have been closer to their buyers and this maxim also applies to Forrester.

In 2017, we are working to drive engagements, increasing client usage of our products through improved responsiveness, ease of use and value.

To this end we are pursuing three initiatives; one, rolling out a new selling model, two, covering down the digital to make our products engagement accessible and three, expanding how we work with our user clients.

Successfully executing these efforts will enable the company to increase renewal rates, expand enrichment levels, win new business and ultimately lay the foundation for revenue and ETF growth. Looking sort of the high level view of the road of our new selling structure, what we internally call the customer engagement model.

As you remember our model splits accounts into two segments. Core, our smaller clients that purchase a limited set of products and Premier, our largest clients who deploy complex solutions. Most of our Core accounts will be served with an inside sales force based in Nashville, Tennessee.

Our Premier accounts are served with the client executives focused on expanding the accounts, a solutions partner configuring the right products to solve the customers’ problems and a client success manager devoted to working with the account to ensure they are just getting the highest possible value from its investments.

In the fourth quarter of 2016, we beta tested the Premier selling motion and I reported on the last call that we experienced better than expected results.

In the first quarter we launched three new Premier teams and experienced that increase in year-over-year renewal rates and an year-over-year wallet share and Mike Morhardt will give you more detail in a few moments. We are on schedule to launch four additional Premier teams in Q2.

Hiring and training plans are on track and we will complete the full North American transition by the end of 2017. Client feedback with the new model has been very positive. A large North American transportation company that had 23 empty return seats had those seats filled within one month after having the transition over to the new model.

On the Core transition, we are on pace with hiring in Nashville adding approximately five new associates per month. We have signed a lease for permanent space in the city with a moving date in the October, November timeframe. So I am very glad to report that our sales transition is proceeding on schedule with early good results.

In addition to the customer engagement model, we are continuing to improve our business technology, this is the technology, systems and processes to win serve and retain clients. As I reported for the fourth quarter, two products that we digitized in 2016 experienced faster sales and performance than expected.

This was the customer experience index in digital reprint and that trend continues into the first quarter. Over the last 30 days, our new digital communities grew by 10% increasing client engagement with Forrester advisors and with peers.

We have launched a second generation of research app to the iPad and iPhone, a universal interface that operates seamlessly across the two platforms. This app will be available on android later in 2017.

To increase engagement, we introduced a new website experience actually earlier this week that enables clients to more quickly access research which is most relevant with projects and challenges.

The second generation in this site will be launched in mid-May, which will unite and connect all of Forrester products in one place, data, research, leadership boards consulting and events. Forrester’s weekly podcast and it’s called What It Means is now available on iTunes, SoundCloud, TuneIn, Stitcher and Google Play.

Each podcast runs for approximately 30 minutes and features analysis from a Forrester research leader. And I would urge listeners on this call to check it out if you want to get a window in some of our most provocative findings and advise. What It Means has had over 9500 unique downloads since its launch. I want to turn now to our user business.

The company is changing the way it works with its user clients. To increase user renewal rates and new business. Firstly, we are focusing on the 12 vertical markets that have mostly impacted in the Age of the Customer and we call that our ideal client profile.

Secondly, we have intensified our research coverage on the critical business technologies that companies must master to win customers. Forrester’s output of waves, this is our methodology for evaluating technology increased 21% in 2016.

And have worked with clients that we analyzed over 400 technology categories ranging from MarTech, to security risk management, to internet of things to artificial intelligence. In 2017, we will evaluate over 800 vendor offerings through our wave technology and that’s a 50% increase since 2014.

Finally, we are also tracking user company engagements with a goal of simulating users. Levels of report download, weather on participation, equal usage and event attendance could have a significant influence on renewal and enrichment rates.

And I am pleased to report that user company engagement loads appreciably in the first quarter, so those companies served by the new customer engagement model teams. While it is still early in our efforts, user renewal and enrichment rates both improved in the first quarter.

So to conclude, our goal for 2017 is to add value through every client engagement across every product line. It is good. Our new selling motion is resonating results including clients, our digital products are stimulating usage and engagement targets are having a positive impact on our user business.

While there is still work to be done, I believe we are setting a solid foundation for growth throughout 2017. I’d now like to hand the call over to Mike Morhardt, Forrester’s Head of Sales.

Mike?.

Thanks, George. In Q1, Forrester’s sales organization made progress across our two key focus areas for 2017 hitting targets and migrating to the new customer engagement model. From a performance perspective, we hit our Q1 target and saw a solid performance in Asia-Pac, Europe, and our International partners.

In North America, we had mixed performance with a strong performance in our vendors, in small user client teams. Our large user client teams had mixed performance across the various regions. Our second area of focus in 2017 is the customer engagement model.

We made significant progress in migrating our sales and service organizations into the new model based on the strong results we saw in our Q4 beta test. Our first goal for Q1 for the customer engagement model was to move three additional teams into the model.

North America has a total of 13 Premier user teams, four are now set up, four will be added in Q2, and we will add two more in July and the last two in October. Based on the results of the beta, we have accelerated our plans for the year. In late February, we added the three additional teams to the model. The results continued to be promising.

To the team that entered the model back in September of 2016, we saw a continued improvement year-over-year in every metric, bookings, retention, wallet share, enrichment booking and pipeline conversion.

With a dedicated person, the Customer Success Manager, focused on engagement and retention, the sales person now has more time to grow their clients in conjunction with the solution partner. The three other teams started their migration at the end of February.

While their metrics in many cases were better year-over-year, we expect a three to five months ramp to see the kind of results we saw in the beta team. The North American transition to the new model will be completed by the end of the year. As George mentioned, we are on track from a training, hiring, and overall implementation perspective.

We will be following the same process in Europe and Asia and we will focus more efforts on these geographies in the second half of 2017 and into 2018. We also made significant progress in our Core client segment. In Q1, the team met expectations across hiring, training, and bookings performance.

We are currently tracking to our goal to have 40 to 50 inside sales professionals in our new office by the end of the year. Finally, we ended Q1 at our planned headcount of 535. Based on our plans, we will be increasing net new hires in Q2 with a planned goal of growing the sales organization by 7% to 10% by the end of the year.

Attrition was lower in Q1 than expected, so we feel confident we can hit this goal by the end of 2017. With that, I will turn it over to Mike Doyle for the financial update..

total revenues of approximately $324 million to $332 million; pro forma operating margin of approximately 10.5% to 11.5%; pro forma effective tax rate of 40%; pro forma diluted earnings per share of approximately $1.13 to $1.20 and we have provided guidance on a GAAP basis for the second quarter and full year 2017 in our press release and 8-K filed today.

Thanks very much and I'm now going to turn the call back over to the operator for the Q&A portion of our call..

Thank you. [Operator Instructions]. And it looks like we have our first question from Tim McHugh. .

Yes, thanks. Just wanted to follow-up on the retention metric that you wouldn’t give us as a trailing 12 month number.

So, and I guess, at least the client retention number ticked down a little, is that reflective of trends last year? I guess, just kind of rolling into that 12 month number, can you give us anymore real-time sense of how retention was trending here early in 2017?.

Tim, it’s Mike Doyle. Yes, I mean, just absolute client retention did tick down. In terms of the specifics, it was 74.8 to 74.3 to give you a very specific number. So about a half a point and from Q4 to Q1 I guess, there is – there it can be, but slight tick down. That said, it’s a big focus for us.

Our goal with the new customer engagement model is to drive that back up. It’s been as high as 80%, Tim, and that’s what we need to march to. Dollar retention, if I get to the specifics, it went actually maybe 6.5 to 87, a tick up a half point the other way. These, still aren’t the numbers we want.

We are looking to be at 80 and 90 and the focus of the customer engagement model is to drive that kind of performance. So, as I look at it, there wasn’t a spike down, it sort of flattened out for the most part. What we need to see is obviously a steady movement upwards into the right on these. .

Tim it’s Mike Morhardt, and from the teams that went into the customer engagement model we thought a 3 to 4 point jump in retentions. So this is a mix across all the different teams. These are vendor of those teams that are in the model, those teams are not..

Okay, and just, the agreement value, I guess, the agreement value includes I believe the consulting as well as the research business and I guess, I was a little surprised by the relative performance of those two in terms of revenues.

I guess, when we look at what’s coming in the door, are you still seeing that split a little bit where in the flat agreement value, is that more weighted to a consulting versus research? And is this kind of more of a – I guess, a sustained trend we are seeing in the business shifting?.

Agreement value for us does not include consulting, Tim..

Okay..

That’s not factored in. So, what you are seeing essentially is primarily our research business and again, I think this is, we talked in the last year with a flat sales it kind of actually dipped a bit in the fourth quarter.

So this is just a reflection of our bookings activity that for us is essentially low single-digit in that area right now and again, we’ve expanded sales headcount in the first quarter and the expectation to the point Mike make is, is this Mike, is that going to continue to happen and the early results in the data we are getting productivity out of the – certainly the first team analyses stood up team working throughout the four, the expectation is we are going to see that start moving up in a meaningful way and it doesn’t capture the consulting activity which we haven’t a really good fourth quarter for consulting, which translated – from a booking standpoint, translated into good revenue in the first quarter in consulting and now, so we are trying.

That could tamper a little bit, because the bookings activity was good, but not as big as we like in the first quarter, but we are focused now to build that back up in Q2. .

And is that comment on bookings, is that you had a comment in there about performance probably not being as good in Q2.

Are you just referring to that bookings level?.

Well, for consulting, it’s a function of where we sit with the backlog and we had a really big backlog at the end of the fourth quarter and so we went into the first quarter and had really strong consulting performance and I think now, it’s – we are back to building more backlog in Q2.

So revenue will probably tamper as consultants are writing more proposals and doing large deliveries. So, it’s a little bit of this give and take and ebb and flow that seems to happen in the consulting business. So, that’s what I mean, I think it will tamper, and I think it’s still going to grow probably not as high as it did in Q1..

Okay. Fair enough. All right, Thank you..

Thank you. .

Thanks, Tim..

And we have our next question from Bill Sutherland. Go ahead..

Thanks very much. Want to follow-up on Tim’s questions of AV. So, when you have all the teams in place by October, you feel like they – the timing there and to be part of the selling season will be about right for realizing most of that increase in sales for kind of directly reflected in kind of an AV growth number..

Yes, that’s the Bill. So the way that we are looking at it right now is that we’ll have all the teams sit up in North America by October, November. As I mentioned in my comments, we are seeing about a three to four to five months lag kind of as people ramp as they get introduced to the accounts as they learn to work together.

We are expecting two pieces to this, it was actually three pieces. One, we are expecting better retention, because of the engagement metrics that we are tracking and holding everyone accountable too.

We are expecting better enrichment having two individuals focused on growing the accounts and we are expecting more new logos as well as we deploy our resources we are targeting these ICP, ideal client profile clients that are – lend themselves to be better client for Forrester.

So we are looking for improvements in metrics on all three of those areas and that would be towards the end of this year as more and more teams stand up where we will have eight stood up shortly of the 13 in North America, but there will be ten by the first couple of weeks of Q3. .

And the kind of metrics with the inside sales group focus to drive in all of the same categories or it is little different?.

It is a little different. We’ve seen a nice uptick in the new business on the inside sales front and our core teams’ for users and vendors which has been great. There is a scalability function to that type of model.

But our expectations are still one that with a reduced product set that they are selling, they are ramping more quickly and they have ability to engage their clients based on the client loads that they have. So we expect improvements in retention, because a lot of these clients weren’t necessarily been called on effectively in the field.

They are getting the attention and love that we want them to and that’s going to lead to both better retention and better enrichment. So, again, they are under the same metrics that we are trying to track for the Premier teams..

Consulting, pretty much been in the starts up sort of level at a time at year end is obviously there?.

I am sorry, I didn’t that catch that Bill. .

Consulting just like the Premier consulting pretty much all set up be effective into the – part of the selling season?.

Yes. As Mike mentioned, or George mentioned, we’ve signed the leases. In some cases, we are aggressively hiring down there. Right now in a particular space that we love to expand but we are – I think hopefully in Q4 we will have our own space and we can get even more aggressive.

But they are ramping more quickly and as George mentioned, we are looking to hire five associates per month and if we see what we are continuing to see we are going to hopefully accelerate that as we go into 2018. .

What was headcount at the end of the quarter, end of Q1?.

20 something, since already lot of people down there Bill..

And then last, I will focus on sales activity.

Mike, are you planning to – what are the plans for Europe with this selling model?.

Yes, as I mentioned, we are running the same play in Europe and that is the first thing we need to do is segment the clients into Core and Premier. We started to make those changes now where client’s stats are more into Premier selling model.

We want to make sure that those are into Premier selling motion and then Core, moving into the Core selling motion, we are looking at the back half of this year to continue working with the European teams. In fact, some of them over here this week talking about how we do that implementation. So, in Europe, everything is a little more complicated.

So we want to be thoughtful about how we do this, but the plan is to run the same play for both Europe and Asia-Pac. .

Beginning in third quarter..

Yes, starting in Q3 and then moving into 2018. .

Okay. So, kind of just a one year lag..

Yes, exactly..

Okay. All right. Thanks..

Thanks, Bill..

Thanks, Bill..

And we have our next question from Allen Klee..

Yes.

Can you give us a sense of – as you break out your business from Premier and Core, how much of the business is very well, each one of those areas and kind of how you think about the opportunity for each one?.

Yes, so the majority of our clients, I would say a good 65%, 70% of them from a numbers perspective are in Core. So, of the 2500 or so, 2400 clients that we have, roughly 600 or so – 600 or 700 are actually in our Premier selling motion. These represents our biggest vendor and user clients.

The ones that George mentioned that are interested in purchasing a whole suite of services from Forrester. The Core selling motion, again some of these clients are large, but they may not necessarily be in our ideal client profile.

So, they may not be on in the customer journey, they may not be interested in our data products, they may not be interested in leadership force because that’s not a focus of their business. And so while they still love our research, or they still may want to come to our events we are more than happy to service them and we do.

So we expect both of these groups to grow.

The Core selling model, we are trying to do that through a lower class servicing the sales model and gaining leverage there and in the Premier model, the idea is that we put more resources against this free up the sales organization to future partners and find executives to focus on the growth while the Customer Success Manager focuses on retention.

We have seen in the beta that that is actually working very well and we are seeing those clients if we are spending up time with them that they will grow with us. .

Great, thank you.

And then, could you just remind me again for digital of how you see that as – and you mentioned a couple of things as you said last year, but where you see kind of see that you think the growth is going to come in 2017?.

Yes, George here. I think what you are looking at is, a gradual transition of all of our products over from, I mean, they were obviously – they were web based over to a more interactive digital form and that’s a – that happen to be a customer stream index.

That’s what happened to the reprint business and what you see now is two of the data products moved to be fully digital by the end of this year. We are experimenting a lot of ideas in our research - in the research format is to have a maybe more interactive – how we can split them and offer IT in a variety of different packages from the same force.

So there is a lot of creativity going on right now that within Forrester. We have this – we have a bigger Forrester lab. We do lot of the testing. Most of the labs that we run are not successful but we’ve had a couple of very good successes there. So, it is – we are spending a lot of money, lot of investment here.

And again, as I said before, as we sort of succeed, we saw very rapid increase in bookings for CXI and also in reprint in Q4 and that was driven to a great extent by the digital format. .

So, lots of spacing. Okay, thank you.

And then, I think I heard you say as you bought back 21.5 million of stock during the quarter, any view on how that is – and how you will allocate this free cash flow going forward?.

Yes, at the end of – in our February call, what we had said was and what we had talked about with the Board was to be opportunistic with our balance sheet and our cash in particular. And we were able to – we thought when the stock dipped a little bit, we were able to take advantage of some good pricing and we bought. And we will continue to do that.

I mean, we said before that we want to be opportunistic with our cash and being thereby and we felt like the pricing dips to a level we think it’s not really justified. And at the same time, we continue to evaluate other options to the balance sheet in terms of both internal investments to George’s point and acquisitions.

So, it’s sort of an ongoing dialogue and we really don’t – we continue to focus on it and we don’t want the balance sheet to be dormant, so. .

And then just following up on that, I think last call you said you would ideally like to do one M&A deal this year.

If you could pick kind of the perfect kind of the deal or whatever, what type of things would you be excited about?.

So, Allen, we look across really three dynamics, one is, globalization, most global, so buying outside of the US, that would be one. Second would be, to enhance our current products, especially to buy the new roles as an example, HR might be an example of that, maybe CFO be an example of that.

And then the third which is really new for us is to look at certain – at companies that may have technology that could help us with our digitization but also bring in new digital products to our clients as they look to capture their customers through technology. So it’s really technology geography and then product plays role.

And I would say that we’ve been very active over the last – over the last six months and we have a very good portfolio and backlog of potential deals.

As you know about M&A, it’s been always on finished volume and then there is no action, but so it’s hard to predict, but we feel good about the amount of – what we have in the portfolio and also the amount of action we had on our side. So, extremely good news. I am not guaranteeing one this year, but that is certainly our goal..

Thank you..

Thanks. .

We have our next question from Vincent Colicchio. .

It Vince Colicchio here back in. Mike Morhardt, you had mentioned that large users were mixed.

I am just curious if there is any particular vertical or region that stands out and is any of that weakness carrying over to April?.

Yes, so we saw – we saw good performance up in Canada, well, overall, we saw good performance for those teams that had entered into the new plan engagement model. We saw the good signs that we had hoped to be had seen. So not all the teams have been migrated over. So, in general that’s a statement.

If you look at sort of the metrics of all the different teams, that is one of the things that we saw. We also saw some good performance specifically up in Canada, which was great. But those teams that don’t necessarily have all of the similar resources, it wasn’t bad across the board.

They were below what some of the expectations of these teams that have gone through the customer engagement model were. So, not hair on fire, just they want to try some of the other teams that have done well..

Okay, thanks for that and, Mike Doyle, I am sorry, if I missed it, but how the consulting revenue perform in the quarter?.

Consulting and advisory revenue was up about 8%. So, a good quarter. So, it was, from our perspective, we were happy with the performance. Again, we went into the quarter with a good backlog that we had from the fourth quarter. So, felt pretty good about things. .

Okay and certainly, thank you. .

Thanks, Vince..

Thank you. And it looks like we have no further questions at this time. I would now turn the call over to Mike Doyle for closing remarks. .

Great. Thanks everybody for joining the call. We are looking forward to getting out on the road and seeing a number of you. We expect to be active and busy during the quarter. So, thanks again, and we will see you soon. .

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect..