Earnings Call Transcript - FORR Q4 2022

Operator, Operator

Good afternoon and thank you for standing by. Welcome to Forrester's Fourth Quarter and Full Year 2022 Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there'll be a question-and-answer session. Please be advised that today's conference is being recorded. I'd now like to turn the conference over to Vice President of Investor Relations, Tyson Seely, please go ahead.

Tyson Seely, Vice President of Investor Relations

Thank you, and hello, everyone. Thanks for joining today's call. Earlier this afternoon, we issued our press release for the fourth quarter and full year 2022. If you need a copy, you can find one on our website in the Investors section. 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. Factors that could cause actual results to differ are discussed in our reports and filings with the Securities and Exchange Commission and the company undertakes no obligation to publicly update any forward-looking statements whether as a result of new information, further events, or otherwise. Lastly, consistent with our previous calls, today we will be discussing our performance on an adjusted basis, which excludes items affecting comparability. While reporting on an adjusted basis is not in accordance with GAAP, we believe that reporting numbers on this adjusted basis provides a meaningful comparison and an appropriate basis for our discussion. You can find a detailed list of items excluded from these adjusted results in our press release. And with that, I'll hand it over to George Colony, Forrester's CEO and Chairman. George?

George Colony, CEO and Chairman

Thanks, Tyson. And welcome to Forrester's fourth quarter and full year 2022 investor call. Following my update, Chris Finn, Forrester's CFO will give a financial review of the quarter and full year. At the end of the call, I'll ask Nate Swan, Forrester's new Chief Sales Officer to give a few remarks. We will then move on to the Q&A portion of the call joined by Carrie Johnson, our Chief Product Officer. In the fourth quarter 2022, Forrester's revenue increased 2% with adjusted operating margin at 9.4% and EPS at $0.45. Total CV increased 3% in the fourth quarter, down 4 points from Q3. Wallet retention was 94%. For the full year revenue increased 9%, adjusted operating margin was 13%, and EPS grew 18%. These results were driven by healthy bookings in the first half of 2022, as well as continued close management of our cost structure in the second half of the year. 2022 was a tale of two cities. In the first half of the year the company was focused on hiring employees as we look to expand contract value at rates aligned with our strong 2021 pace. At mid-year, we recognized three factors impacting our progress. One, funding and budget pressure on our smaller technology clients. Two, inflation, geopolitical uncertainty, and the turbulent economy. And three, the complexity of transitioning our clients out of legacy research products and into our new platform, Forrester Decisions. While we had hired aggressively and built new systems to enable the company to sustain double-digit CV growth, these moves were not enough to enable us to outrun the three intervening factors. Subsequently, we did not achieve our bookings plans in the second half of the year, and this impacted CV growth, deferred revenue, wallet retention, and ultimately revenue growth. That said, we made progress in parts of the business that will be important drivers of growth beyond 2022, specifically Forrester Decisions. As you all know, Forrester Decisions was launched in 2021 as our power research platform integrating Forrester and SiriusDecisions Research in one offering. It delivers vision research, strategy research, and operational research to over a dozen different executive personas across technology, marketing, sales, product, customer experience, and digital. To be clear, Forrester Decisions is the future of the company. In 2022, we achieved our goal of moving approximately one-third of our CV to Forrester Decisions. While our overall research retained at 74%, Forrester Decisions renewed in 2022 at 89%. Client engagement is considerably higher with Forrester Decisions; on average, Forrester Decisions users visit our site 50% more than users of our legacy research. And finally, clients enrich Forrester Decisions at significantly higher rates than our legacy products. In Q4, the platform had 101% wallet retention, as compared to total wallet retention of 94%. In our Customer Experience Index, Forrester Decisions is the top-performing Forrester product. Here are a few client testimonials. From the Chief Revenue Officer of a large tech company, organizations such as ours tend to have a variety of priorities across leadership. The Forrester team provides a North Star for everyone and shows us where change is needed. From an enterprise architect at a large financial services company, in the face of budget cuts, I chose Forrester because I found them more biased, more engaging, and able to provide insights I can act on. I double down on Forrester to better my ROI. And finally, from the Chief Enterprise Architect at a workforce management services company, our sister company is using Forrester Decisions for a strategic initiative to enter new industries worth hundreds of billions of dollars. Forrester is definitely a major player in our success by providing market analysis, frameworks for organizations, tech recommendations, and helping us avoid the wrong sub-segments. Forrester Decisions uniquely aligns technology and business leaders to accelerate growth. As examples, we closed a number of substantial deals in Q4, including a $760,000 contract with a large European bank spending both technology and marketing services within Forrester Decisions. We also closed a multi-year $850,000 deal with a personal care company encompassing our technology executive, technology architecture and delivery, security and risk, and digital business and strategy services. In addition to Forrester Decisions, 2022 was a successful year for our events business. As COVID restrictions were lifted, we hosted 11 events across the course of the year with over 5,300 paid attendees, 850 of those being C-level executives. All of these events were hosted in-person via our digital platform, enabling us to reach a wider, more global audience. In the fourth quarter, we hosted five events with over 1,500 paid attendees. Our events business grew 139% in 2022. Let me turn now to our outlook and thoughts on 2023. As Chris will outline in a few moments, we anticipate that 2023 like 2022 will be a tale of two halves. We expect pressure on our key metrics in the first half, driving declines on both the top and bottom lines, before returning to growth in the second half of the year. For the full year, we expect slight declines on our top and bottom lines. Now, as I've outlined on previous calls, we are engaged in building a contract value growth engine. This engine expands CV which grows cash flow, which we then invest in product, sales, and acquisitions. Through those investments, we further increase CV and the model propels the company forward at double-digit growth rates. Accordingly, we will pursue three initiatives in 2023, all aimed at driving CV growth. We will focus on improving and enhancing Forrester Decisions as the year progresses. This will include the creation of deeper research on how executives across customer-facing functions like marketing, customer experience, and digital can all align. Companies that achieve alignment grow revenue 2.4 times faster and profit two times faster than non-aligned organizations. Our second initiative is to increase the effectiveness of our sales force. We are entering 2023 with 436 salespeople, 89% fully ramped, and these are some of the highest levels for both in the history of the company. Nate Swan, our newly hired Chief Sales Officer, is focused on three priorities: selling higher in our client organizations, cross-selling Forrester Decisions into new buying centers, and expanding our new business team. We are very happy to have Nate leading sales and he is already executing his plan to create a high-performance selling team. Nate brings decades of sales experience in the research industry, with deep knowledge of building data-driven, repeatable, scalable selling motions. And I'll let Nate introduce himself in a few minutes. Our third initiative is to continue to optimize our consulting and events businesses to be more potent drivers of CV. Much of this work will center on ensuring that our consulting and events are augmenting and stimulating new research contracts. We are laser-focused on these three initiatives. By year-end, we anticipate that approximately two-thirds of our CV will be transitioned to the new product. As we progress through the year, we will provide updates on our client migration. In summary, while 2022 was not the year that anyone planned for, we remain resolute in our mission of transitioning our clients to Forrester Decisions, the platform which will enable the company to consistently grow contract value at double-digit rates. We remain a highly cash-generative company with a healthy balance sheet, over 2,700 clients including nearly half of the Fortune 500, and a trusted global brand. The business world remains highly dynamic and when you overlay technology into that world, smart companies need research to understand, compete, grow, and differentiate. That is the long-standing and long-term megatrend that fuels our business model and drives demand in our $78 billion total addressable market. I will now turn the call over to Chris Finn for our financial update. Chris?

Chris Finn, CFO

Thanks, George. And thank you everyone for joining us this afternoon. As George discussed, our fourth quarter results were mixed. We were in line with our guide on the topline, while we exceeded our guidance for adjusted operating margins and EPS. At the same time, we continue to see a few of our key metrics decline compared to the previous quarter. Before getting into our detailed fourth quarter and full year results for 2022, I'd like to take a step back and discuss a few of the important decisions we made over the course of the past year. As we've talked about on our recent calls, we along with the broader market faced a lot of uncertainty: global inflation, war in Europe, FX headwinds, lingering impacts from COVID, and the possibility of a recession in the U.S. Unfortunately, most of these headwinds have not abated. Fortunately, though, we have taken actions to weather what's ahead and manage our P&L, and drive CV growth as we exit 2023. To this end, there are two specific areas I will highlight: our cost management and the accelerated transition to Forrester Decisions. Regarding cost management, as George noted, we began to tightly manage our cost structure going into the second half of the year. This culminated in a difficult decision in early 2023 to reduce approximately 4% of our workforce. This along with ongoing prudent management across our cost base allows us to remain agile for the year we see ahead. Further, we made the decision in mid-2022 to accelerate our CV transition to our new research platform, Forrester Decisions, and announced the sunsetting of our remaining legacy products. While this has created some churn within our smaller clients, the decision to pivot more quickly on the migration efforts has begun to pay off. I'm happy to report that we exited the fourth quarter with approximately one-third of our CV on the Forrester Decisions platform representing over $113 million in contribution. Furthermore, client and wallet retention within the Forrester Decisions platform was both strong, which I'll highlight later in my comments. Given the metrics, we exited 2022 with combined strong client acceptance of this new platform, we have confidence in our goal of converting approximately two-thirds of CV into Forrester Decisions by year-end 2023. We still have work to do, but by managing our cost and driving the transition to Forrester Decisions, we are building a strong base on which we can grow in the years ahead. Said another way, we continue to manage what is within our control and at the same time create a foundation of the business that can navigate the uncertainty in the market over the next few quarters. I will provide additional details when I discuss guidance in a moment, but let me now turn to our results for the fourth quarter and full year 2022. As you look at the fourth quarter, as anticipated, we continue to see our key metrics decline. Specifically, CV growth was 3% in the fourth quarter, which was down from 7% growth in the prior quarter. In addition, overall wallet retention was 94% and client retention was 74%, down 3 points to 1 point respectively from the prior quarter. While we're not happy with these numbers as we expressed in our third quarter call, they were not unexpected. The bright spot here though is within the Forrester Decisions platform, where these metrics were significantly higher. Specifically, wallet retention for Forrester Decisions in the fourth quarter was 101%, 7 points higher than the total portfolio number and client retention for Forrester Decisions in the fourth quarter was 89%, 15 points higher than the total portfolio number. As we continue to migrate our legacy clients and drive additional cross-sell and up-sell opportunities into the Forrester Decisions base along with new acquisition sales in the platform, we expect our metrics to improve as Forrester Decisions continues to make up a larger percentage of the portfolio. In terms of sales headcount through the fourth quarter of 2022, we were up 11% versus the previous year with a record number of quota carriers going into the calendar year. As our sales force continues to gain experience selling Forrester Decisions, we expect productivity to accelerate in the back half of the year. This coupled with the success of Forrester Decisions since our launch, as evidenced by the strong metrics we reported today, allow new sales leadership to be a large part of what gives us confidence in our ability to drive future growth. Moving now to the P&L. As previously mentioned, we delivered CV growth of 3% in the fourth quarter. This combined with a decline in consulting growth for the period resulted in overall revenue growth in Q4 of 2%. For the full year, we delivered 9% revenue growth, which was fueled in part by strong CV growth in 2021 and a rebound during 2022 in our Events business due to the hybrid model we continue to execute. Specifically for the total company, we generated $136.9 million of revenue in the fourth quarter compared to $133.7 million in the prior year period. For the full year, revenue was $537.8 million compared to $494.3 million in 2021. These results include an approximately one point headwind from FX in both the fourth quarter and for the full year. Research revenues increased 3% in the fourth quarter of 2022 and 9% for the full year. As expected, client retention and wallet retention continued to decline quarter-over-quarter as previously noted. Regarding these declines, which we continue to expect for the first half of 2023, there are three specific areas to call out. One, our sales headcount continues to build. As we mentioned on our last call, we had our highest number of ramping reps in the second half of 2022. The majority of these reps are now fully ramped, which we expect to drive growth as the year unfolds. Two, we continue to transition clients to Forrester Decisions, and this creates some churn in our legacy base. As we've discussed before, the clients we transition to the new platform spend more with us. Three, macroeconomic issues continue to remain a headwind, as they are for many other companies. Turning now to our Consulting business, which posted revenues of $37.5 million in the fourth quarter of 2022 and $152.6 million for the full year, representing declines of 4% and 2% respectively versus the prior year periods. As we've stated before, these declines continued to be driven by a combination of our analysts shifting a portion of their focus to delivering on our CV business and the overall effects of the macroeconomic environment. And finally, our events business grew 43% in the fourth quarter to $7.2 million. For the full year, the segment was up nearly 140% to $30.7 million, driven by strong demand from attendees and sponsors, and our continued hybrid approach to in-person events. As George noted, we held 11 events with over 5,300 paid attendees. We expect to host similarly sized events in 2023, but I acknowledge there may be some growth challenges based on potential reductions in corporate-related travel budgets due to the ongoing macroeconomic environment. Continuing down our P&L on an adjusted basis, operating expenses for the fourth quarter increased by 7%, largely driven by higher headcount costs. Specifically on headcount, for the fourth quarter, we were up 14% compared to the same period in 2021. On a full-year basis, operating expenses increased 9%, also largely driven by headcount. These headcount increases were materially related to our investments in our go-to-market engine and research, as well as infrastructure projects to drive efficiencies in the business. These are now largely behind us. Operating income in the fourth quarter decreased by 28% to $12.9 million, or 9.4% of revenue in the current quarter compared to $17.8 million, or 13.3% of revenue in the fourth quarter of 2021. On a full-year basis, operating income increased by 9% to $69.7 million, or 13% of revenue, compared with $64.2 million, or 13% of revenue in 2021. Interest expense for the fourth quarter of 2022 was $0.7 million as compared to $1 million in the same period of 2021. On a full-year basis, interest expense was $2.5 million compared to $4.2 million in 2021. This reduction was driven by lower outstanding debt. Finally, net income decreased 25% to $8.5 million in the fourth quarter of 2022, compared to $11.3 million in the previous year's period. EPS decreased 24% in the fourth quarter to $0.45 compared to $0.59 in the year-ago quarter. On a full-year basis, net income increased 17% to $47.2 million and EPS increased 18% to $2.46. Looking at our capital structure, year-to-date cash flow from operating activities reached $39.4 million and capital expenditures were $5.7 million, resulting in $123.3 million of cash and investments on hand as we exited the fourth quarter. There were no debt payments or stock buybacks this quarter, leaving us with $50 million of outstanding debt and approximately $75 million of our stock repurchase authorization intact. Let me now walk you through how we expect 2023 to unfold. While the macroeconomic outlook remains challenging, we have incorporated the following assumptions into the guidance we're providing today. Specifically, one, uncertainty in the tech sector will continue to affect us, while we have a great sales team in place and new leadership that we're confident in, and believe we can manage through what is ahead, the turnover in the technology industry remains a challenge. Two, we continue to anticipate macro headwinds, including the likelihood of recession in the first half with some improvement in the back half of the year going into 2024. Three, as we continue to transition clients to Forrester Decisions and sunset our legacy products, we expect ongoing churn with smaller clients. This will cause some of our key metrics such as client and wallet retention to remain under pressure over the next quarter or two. But we fully expect these to rebound later this year as we continue to grow our Forrester Decisions platform. Putting all this together, we expect our CV growth to continue to decline through the first half of the year and begin to rebound in the second half of the year to mid-to-high single digits as we progress through our Forrester Decisions transition. As such revenue growth should follow a similar trajectory, down in the first half of the year and returning to low single-digit growth in the back half. Finally, as a reminder from our third quarter call, starting this year we will only provide guidance on a full-year basis, and where we see appropriate we will give color around the timing of various metrics over the course of the year, but at the end of the day, we're managing the business for the long term. And we believe that providing guidance on a yearly basis aligns with that philosophy. We'll continue to provide an update on our annual outlook during our quarterly calls. Turning to guidance, starting with the topline, for 2023, we expect revenue to be $518 million to $538 million, or down 4% to flat growth versus 2022. This guidance assumes a low single-digit decline to flat growth over the course of the year in our research business, with ramping in the back half of the year, as well as modest growth in events. We expect consulting to be down slightly for the year, given the reasons I outlined previously. Given the actions we've taken to control costs, we would expect our operating margins to be in the range of 12% to 13% for 2023. Interest expense is expected to be $2.5 million for the year, and we are guiding to a full-year tax rate of approximately 29%. Taking all this into account, we would expect EPS to be in the range of $2.25 to $2.45 for the full year. We have incorporated an appropriate level of caution into our outlook, ensuring we have taken all factors whether external or internal into account. To the extent the tech environment can rebound from where it is, and the macro environment plays out less severely than currently forecasted, there could be upside to this guidance. In summary, we continue to believe that 2023 will be another challenging year. But as we demonstrated in 2022, we have confidence in the team's ability to navigate these challenges. While we anticipate the year to be mixed with a slow start and then growth ramping in the back half, we have the right strategy and team in place to face these challenges. We continue to be excited about the ongoing migration of Forrester Decisions and the value it brings to our clients, and the growth that will bring to the company in the long term.

George Colony, CEO and Chairman

To summarize today's comments, the tech slowdown, economic conditions, and the transition to our new research platform dampened our growth in 2022. But we remain laser-focused on rolling out Forrester Decisions, which is fast growing, renewing at high rates, with high client engagement. We expect 2023 to start slowly, with improving performance in the second half of the year. Now before we head off to Q&A, I wanted to turn the call over to Nate Swan, our new Chief Sales Officer. Nate?

Nate Swan, Chief Sales Officer

Thanks for the warm welcome, George, and good afternoon, everyone. I'd like to spend a few moments talking about what attracted me to Forrester, as well as provide a high-level view of my philosophy and approach that I'm bringing to the sales organization. As both George and Chris have outlined, the launch of Forrester Decisions in 2021 has proven to be a great success. This platform is still in the early innings and I look forward to leading the sales force and driving this product to the next level. But it wasn't just the product portfolio that attracted me to Forrester; it was the people. Forrester has a strong leadership team in place, as well as employees across the organization who are motivated and capable of delivering growth. Regarding my philosophy, I firmly believe that in order to be a successful growth company, we need to ensure we have a high-performing sales culture with coaching and collaboration to drive better outcomes for our customers, the business, and each other. Creating a culture of high performance happens by having a clear customer-obsessed go-to-market strategy, which includes enablement, coaching, and development plans. Teaching leaders have to be great coaches with a laser focus on developing and helping them win. Ensuring our sales leaders are focused on controllables, specifically the inputs that are going to make our reps successful with the goal of always achieving and beating the plan. Enabling our salesforce to call high in organizations and focus on the outcomes of executives and the companies they represent, and giving opportunities to everyone in the sales organization to grow their careers where they want to go, driving the biggest impact for themselves and the company. If they aren't successful, we won't be successful. The team at Forrester has shown that we have a unique value proposition and go-to-market plan that has positive results for our clients. That unique value proposition has been an incredible total addressable market, giving us no shortage of opportunity. As I see it, it's about understanding why we're successful and replicating those best practices around the business until they become standard practices that scale. In summary, Forrester's value to positively impact our customers is unique. We have untapped market opportunities to bring in new customers, as well as the ability to upsell and cross-sell within our current clients. While there is work to do, the future at Forrester is bright. I'm so happy to join all Forresterites on this path forward. Let me now hand it over to the operator for the Q&A portion of this call.

Operator, Operator

And I show our first question comes from the line of Andrew Nicholas from William Blair. Please go ahead.

Andrew Nicholas, Analyst

Hi, good afternoon. First question I wanted to ask was on how 2022 played out. George, I think you mentioned twice the three factors that are impacting progress between funding pressure on smaller tech clients, the economy, inflation, and then the transition onto the FD platform. I'm just kind of wondering relative to where we stood six months ago, which of those three buckets have deteriorated if any or if those factors are largely consistent with kind of how you expected them to play out. Just trying to get a sense for what ultimately unfolded over the past couple of quarters versus maybe what you expected six months ago?

George Colony, CEO and Chairman

I think that nobody was spending in 2022; it turned out to be a very unexpected year. As we move further into the fourth quarter, Europe is actually starting to show some improvement. The economic signals are still mixed but may appear a bit more positive as the year comes to a close. I believe that the tech sector was declining faster than the other two factors in the third and fourth quarters, which we observed through layoffs.

Andrew Nicholas, Analyst

Got it. And then, in terms of capital allocation, I apologize if I missed it in the prepared remarks, but just kind of wondering how you're viewing that for '23. It looks like you still have about $50 million of debt. I'm not sure if you have any plans to pay that down at any point, if you have prioritization of share repurchases or just kind of an update there would be great? Thank you.

Chris Finn, CFO

Certainly. We have generated a significant amount of cash, and currently, we have over $120 million in cash and investments available. Our focus moving forward in terms of capital allocation remains unchanged. First, we are committed to reinvesting in the business; second, we will be looking for value-creating acquisitions; and third, we will prioritize paying down debt. We may take a more opportunistic approach to share buybacks, but that is not a priority for us at this moment. Our main goals remain consistent. Regarding acquisitions, we recently appointed a new Head of Corporate Development, and we intend to actively explore opportunities in that area, especially given the current valuation trends in the sector. As mentioned, we have $50 million in outstanding debt and approximately $75 million remaining for share buyback authorization as we move forward.

Andrew Nicholas, Analyst

Thank you.

George Colony, CEO and Chairman

Thank you.

Chris Finn, CFO

Thank you.

Operator, Operator

Thank you. And I show our next question comes from the line of Anja Soderstrom from Sidoti. Please go ahead.

Anja Soderstrom, Analyst

Hi, thank you for taking my questions. I'm curious about the drivers you mentioned for the year, particularly in the second half, but I didn't hear anything regarding new products or offerings. What can we expect in that area and how does it factor into your forecast for the year?

George Colony, CEO and Chairman

We have a very significant product called Forrester Decisions that we are heavily focused on.

Carrie Johnson, Chief Product Officer

Sure. Hi, it's Carrie. As George said, and we heard in the comments, Forrester Decisions is still our venue product offering. We're focusing all Forrester innovation in that platform, in the research and the product itself, and the value that we're driving for customers; we're expected to not launch many new products as we look to primarily migrate our existing customer base to Forrester Decisions. Chris mentioned that would be two-thirds by the end of the year, and focusing all of our efforts there.

George Colony, CEO and Chairman

Remember one of our major priorities is enhancing that product. So we expect to put two or three very big new features into that product every year.

Anja Soderstrom, Analyst

Okay, thank you. And I understand that you are cutting some of your workforce, but how does that help the sales team? Are you still hiring and expanding there, or are you just taking a step now and focusing on what you have?

Nate Swan, Chief Sales Officer

Yes, so from a sales force perspective, we are definitely focused on hiring the sales force. We were up approximately 11% last year, so double-digit growth in the salesforce, as George noted. We've got a record number of quota-carrying reps coming into this year, and our plan is to expand quite double-digits, more like mid-single digit rates, and we're really looking very hard at productivity enhancements as we go through the year, in line with our planned growth.

Anja Soderstrom, Analyst

Okay, thank you. That was from me.

George Colony, CEO and Chairman

The reduction in force did not impact the quota-carrying at all.

Anja Soderstrom, Analyst

Okay, thank you.

George Colony, CEO and Chairman

Thank you, Anja.

Operator, Operator

Thank you. And I show our next question comes from the line of Vincent Colicchio from Barrington. Please go ahead.

Vincent Colicchio, Analyst

Yes, thanks for taking my questions. George, could you give us more color on the complexities involved in the transitions? I suppose, some things that had happened that were unexpected. Any color would help?

George Colony, CEO and Chairman

We decided when we launched Forrester Decisions that we would likely continue certain products for the next three years. The complexity we faced was primarily due to smaller tech vendors not transitioning as we had anticipated in our models. It's important to consider the general issues in the tech industry regarding funding and tighter venture capital, especially in Europe. That's my answer, and Carrie can provide additional insights; this was the main complexity we encountered in 2022. Do you have any thoughts on this?

Carrie Johnson, Chief Product Officer

No, I had the same answer. Although the goal and the design of Forrester Decisions needs to go a bit higher in both our target audience and target customer base, in terms of places where we would have the opportunity to sell the new products, and also cross-sell and enrich on that existing products. So we did expect some long vendor churn as a result of that, but I think the macroeconomic conditions contributed more to some of the complexity than we expected.

George Colony, CEO and Chairman

The good news is that many of the large tech vendors have more than 50% transitioned to Forrester Decisions. These discussions are quite complex, especially with major players like Microsoft, who have been purchasing from us and utilizing our research in a specific way. Now, with Forrester Decisions, there's a significant shift happening. However, the positive aspect is that these conversations are progressing well, and we are already halfway through this transition.

Vincent Colicchio, Analyst

I assume you're trying to attract new clients with the FD approach, so are you meeting your expectations for signing up new FD clients this quarter? What does that look like?

Carrie Johnson, Chief Product Officer

Sure. It's Carrie. We did, I mean, as you suspect the majority of Forrester Decisions sales do come from our existing base, that's by design, but we're very pleased with our new business results over half of our new business bookings in the year or to the new platform. We're very pleased with that progress as well. So we're happy with both new business and the renewable side of it.

Nate Swan, Chief Sales Officer

Okay. And I'd add one thing too Vince is that, remember from the sunsetting discussions that we've had this year, we are only selling new FD. So there's no longer new sales of legacy business. So we have a laser focus on new business sectors for sure.

George Colony, CEO and Chairman

Yes, and this may be a bit too much information for you, but remember that Forrester Decisions is focused on large tech companies. We are selling new products to these organizations, primarily targeting CMOs, CLOs, and customer experience leaders. As a result, we are attracting a whole new set of executives, which is positively impacting our business deals.

Vincent Colicchio, Analyst

Okay, thank you.

Operator, Operator

Thank you. I'm showing no further questions in the queue at this time. I'd like to turn the call back over to management for closing remarks.

George Colony, CEO and Chairman

Thank you everyone for joining us this evening. The IR team, Mr. Tyson will be around this evening and tomorrow and the weeks ahead for any follow-up questions. Please feel free to reach out to us. Thank you for joining.

Operator, Operator

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.