Forrester Announces Q3 Earnings Per Share of 37 Cents, Exceeding Consensus of 31 Cents
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Oct 30 2025
0mins
Should l Buy FORR?
Q3 Financial Performance: The company reported Q3 revenue of $94.3 million, falling short of the consensus estimate of $99.2 million, but achieved growth in operating margin and earnings per share (EPS).
AI Innovations: CEO George F. Colony highlighted the launch of Forrester AI Access, a new self-service tool leveraging their generative AI capabilities, aimed at providing clients with trusted insights and facilitating smarter decision-making.
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Analyst Views on FORR
About FORR
Forrester Research, Inc. is an independent research and advisory firm. The Company operates through three segments: Research, Consulting, and Events. The Research segment provides objective, independent and data-driven research insights utilizing both qualitative and quantitative data. Its primary subscription research services include Forrester Decisions. The Consulting segment includes consulting projects and advisory services. It delivers focused insights and recommendations to assist clients in developing and executing technology and business strategies. The Events segment hosts multiple events across North America, Europe, and the Asia-Pacific region. Its Events focused on business imperatives of significant interest to clients, including business-to-business marketing, sales and product leadership, customer experience, security and risk, technology and innovation, and data strategies and insights.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Nvidia Market Leadership: Nvidia's stock has risen 980% in the same period, currently trading at $183, with a median target price of $250 from analysts, suggesting a 37% upside and highlighting its sustained leadership in AI infrastructure.
- Strong Business Growth: Palantir has accelerated revenue growth for 10 consecutive quarters, achieving a Rule of 40 score of 127% in Q4, reflecting exceptional business fundamentals, with Morgan Stanley analysts calling it the best fundamental story in software.
- Cautious Investor Advice: Despite Palantir's 37% decline from its peak, its high P/E ratio of 205 warrants caution among investors, recommending small positions to mitigate risks if the company fails to meet Wall Street's lofty expectations.
See More
Forrester Research Q4 2025 Earnings Call Insights
- AI-Driven Business Transformation: Forrester launched AI Access in 2025, with Q4 unique users increasing by 55% year-over-year, indicating a significant rise in client demand for AI products, which is expected to drive future revenue growth.
- Declining Financial Performance: Q4 revenue was $101.1 million, down 6% year-over-year, with full-year revenue at $396.9 million, an 8% decrease, reflecting challenges following the exit from the strategy consulting business.
- Improved Client Retention: Client retention reached 87% in 2025, a 4-point improvement year-over-year, indicating enhancements in client relationship management and service quality, potentially laying a foundation for future revenue stability.
- Cautious Future Outlook: The company guided 2026 revenue between $345 million and $360 million, representing a 9% to 13% decline, primarily influenced by the exit from strategy consulting and restructuring of the events business, highlighting uncertainties in the future market.
See More
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- Quarterly Revenue Decline: Forrester Research reported fourth-quarter revenue of $101.1 million, down from $108.0 million a year ago and below the consensus estimate of $103 million, indicating significant competitive pressure in the market.
- Widening Losses: The company swung to a net loss of $33.9 million, or $1.78 per share, from a net income of $0.4 million, primarily due to a $26.8 million non-cash goodwill impairment, reflecting deteriorating financial health.
- Poor Annual Performance: For the full year, Forrester's revenue was $396.9 million, down from $432.5 million in 2024, with losses deepening to $119.4 million, or $6.28 per share, highlighting ongoing profitability challenges and market headwinds.
- Pessimistic 2026 Outlook: Forrester expects revenue between $345 million and $360 million for 2026, representing a decline of 9% to 13% from 2025, with negative operating margins projected, underscoring the need for restructuring and strategic adjustments.
See More
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- Earnings Shortfall: Forrester Research reported a Q4 non-GAAP EPS of $0.17, missing expectations by $0.04, indicating pressure on profitability that could undermine investor confidence.
- Revenue Decline: The company's Q4 revenue of $101.1 million, down 6.4% year-over-year, fell short of expectations by $2.15 million, reflecting weak market demand that may hinder future growth prospects.
- Market Dynamics: Palm Valley Capital Fund's acquisition of Ingredion and sale of Northwest Natural in Q4 suggests a shift in investment strategies among market participants, potentially impacting Forrester Research's competitive landscape.
- Historical Financial Data: Historical earnings data for Forrester Research indicates that despite current challenges, the company must focus on long-term strategies to navigate changing market conditions and restore growth.
See More
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- Index Decline: The S&P North American Technology Software Index has fallen 24% since its record high in September 2025, entering bear market territory as investors worry that AI coding tools may limit future software demand.
- Optimistic Market Outlook: Morgan Stanley's fourth-quarter CIO survey suggests that software will be the fastest-growing IT sector in 2026, indicating confidence in incumbent software vendors benefiting from AI disruption.
- Strong Datadog Performance: Datadog reported a 28% year-over-year revenue increase to $886 million in Q3, with remaining performance obligations rising 53% to $2.8 billion, although high R&D spending led to slower net income growth.
- Atlassian's Growth Potential: Atlassian's Q3 revenue grew 21% to $1.4 billion, with RPO increasing 42% to $3.3 billion, and the CEO noted that active users engaging with AI features exceeded 3.5 million, reflecting strong market demand.
See More
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- Datadog Market Share Growth: Datadog continues to gain market share in observability software, with Q3 revenue increasing 28% to $886 million and remaining performance obligations (RPO) rising 53% to $2.8 billion, indicating its leadership in AI for IT operations and expected benefits from AI advancements in the future.
- Atlassian Strong Financial Performance: Atlassian reported a 21% revenue increase to $1.4 billion in the September quarter, with RPO jumping 42% to $3.3 billion and non-GAAP earnings rising 35% to $1.04 per share, highlighting its competitive advantage in work management software, particularly in DevOps and marketing sectors.
- AI Technology Boosting Business Development: Datadog's Watchdog AI engine and Atlassian's Rovo generative AI assistant enhance efficiency for IT and non-technical teams, with Datadog recognized by Forrester as a leader in AI for IT operations and Atlassian acknowledged by Gartner for its generative AI technologies, showcasing both companies' strategic focus on innovation.
- Optimistic Market Outlook: Despite a 24% decline in the S&P North American Technology Software Index since September 2025, Morgan Stanley's survey indicates that software will be the fastest-growing IT sector in 2026, with analysts optimistic about Datadog and Atlassian's future performance, projecting adjusted earnings growth rates of 19% and 22%, respectively.
See More
