Navigating Contradictions: Insights from the Latest Earnings Call on Government Business and Sales Strategies

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Revenue Decline Amidst Economic Uncertainty:
- Forrester Research reported revenue of $89.9 million in Q1 2025, a 10% decrease compared to the prior year, with CV research business impacted and consulting business showing mixed results.
- The decline was attributed to macroeconomic uncertainty, government efficiency efforts, tariffs, and budget tightening across various industries, particularly in Asia and Europe.

Deferred Sales Activities and Pipeline Improvement:
- Forrester experienced a decrease in both revenue and contract value in Q1, however, sales activities and sales pipelines are showing month-on-month increases.
- The company is optimizing its go-to-market motion to reach higher-level executives and expand the number of personas served within accounts, contributing to pipeline growth.

Economic and Governmental Challenges Impacting Forrester's Business:
- The U.S. federal government, comprising less than 6% of Forrester's contract value, has resulted in several contract cancellations due to the U.S. federal government efforts.
- Tariffs imposed by the U.S. government are causing hesitancy among buyers, particularly in Asian and European markets, leading to budget tightening and spending pauses in certain verticals.

AI Research and Services Expansion:
- Forrester continues to expand its research in artificial intelligence across all 14 of its Forrester Decision Services, focusing on both generative and Agentic AI, which are expected to transform large corporate systems in the next five years.
- The company's proprietary large language model, Izola, is being integrated to provide unbiased research guidance to clients, enhancing buying assistance and streamlining internal operations.