##### Table of Contents



FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934.
 FOR THE QUARTERLY PERIOD ENDED March 31, 2011
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934.
 COMMISSION FILE NUMBER: 000-21433
 FORRESTER RESEARCH, INC.
  DELAWARE
(State or other jurisdiction of 
incorporation or organization)
    
    04-2797789
(I.R.S. Employer
Identification Number)
 400 TECHNOLOGY SQUARE 
CAMBRIDGE, MASSACHUSETTS
(Address of principal executive
offices)
    
    02139
(Zip Code)
   þ o
  o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
  o þ




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##### 



PAGEPART I. FINANCIAL INFORMATION
    
    
    3ITEM 1. Financial Statements
    
    
    3Consolidated Balance Sheets as of March 31, 2011 (Unaudited) and December 31, 2010
    
    
    3Consolidated Statements of Income for the Three Months Ended March 31, 2011 and
2010 (Unaudited)
    
    
    4Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2011
and 2010 (Unaudited)
    
    
    5Notes to Consolidated Financial Statements
    
    
    6ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations
    
    
    14ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    19ITEM 4. Controls and Procedures
    
    
    19PART II. OTHER INFORMATION
    
    
    19ITEM 1A. Risk Factors
    
    
    19ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    19ITEM 6. Exhibits
    
    
    21EX-31.1EX-31.2EX-32.1EX-32.2
  2




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##### Table of Contents



ITEM 1.
    
    FINANCIAL STATEMENTS
  
 
 March 31,
    
    
    December 31,2011
    
    
    2010(Unaudited)ASSETSCurrent Assets:Cash and cash equivalents
    
    $
    97,600
    
    
    $
    86,927Marketable investments (Note 3)
    
    
    133,090
    
    
    
    119,990Accounts receivable, net
    
    
    48,280
    
    
    
    73,574Deferred income taxes
    
    
    4,040
    
    
    
    4,089Deferred commissions
    
    
    11,795
    
    
    
    12,598Prepaid expenses and other current assets
    
    
    19,426
    
    
    
    16,733Restricted cash
    
    
    3,683
    
    
    
    3,879Total current assets
    
    
    317,914
    
    
    
    317,790Long-term marketable securities (Note 3)
    
    
    9,117
    
    
    
    9,117Restricted cash
    
    
    4,623
    
    
    
    11,609Property and equipment, net
    
    
    30,875
    
    
    
    19,838Deferred income taxes
    
    
    7,743
    
    
    
    7,779Goodwill
    
    
    68,237
    
    
    
    67,958Intangible assets, net
    
    
    7,794
    
    
    
    8,487Non-marketable investments (Note 4)
    
    
    7,834
    
    
    
    7,359Other assets
    
    
    557
    
    
    
    540Total assets
    
    $
    454,694
    
    
    $
    450,477LIABILITIES AND STOCKHOLDERS EQUITYCurrent Liabilities:Accounts payable
    
    $
    4,675
    
    
    $
    3,644Accrued expenses
    
    
    31,768
    
    
    
    36,485Deferred revenue
    
    
    137,527
    
    
    
    131,521Total current liabilities
    
    
    173,970
    
    
    
    171,650Non-current liabilities
    
    
    8,685
    
    
    
    6,920Total liabilities
    
    
    182,655
    
    
    
    178,570Stockholders Equity (Note 7):Preferred stock, $.01 par valueAuthorized - 500 shares, issued and outstanding  none
    
    
    
    
    
    
    Common stock, $.01 par valueAuthorized - 125,000 sharesIssued -
30,578 and 30,500 as of March 31, 2011 andDecember 31, 2010, respectivelyOutstanding
- 22,653 and 22,812 as of March 31, 2011 andDecember 31, 2010, respectively
    
    
    306
    
    
    
    305Additional paid-in capital
    
    
    361,541
    
    
    
    358,017Retained earnings
    
    
    84,563
    
    
    
    81,652Treasury stock - 7,925 and 7,688 as of March 31, 2011 andDecember 31, 2010, respectively, at cost
    
    
    (171,162
    )
    
    
    (162,595
    )Accumulated other comprehensive loss
    
    
    (3,209
    )
    
    
    (5,472
    )Total stockholders equity
    
    
    272,039
    
    
    
    271,907Total liabilities and stockholders equity
    
    $
    454,694
    
    
    $
    450,477
  3




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##### Table of Contents



Three Months Ended March 31,2011
    
    
    2010(Unaudited)Revenues:Research services
    
    $
    44,547
    
    
    $
    39,416Advisory services and other
    
    
    21,195
    
    
    
    19,764Total revenues
    
    
    65,742
    
    
    
    59,180Operating expenses:Cost of services and fulfillment
    
    
    25,498
    
    
    
    22,327Selling and marketing
    
    
    25,465
    
    
    
    20,088General and administrative
    
    
    8,918
    
    
    
    7,204Depreciation
    
    
    970
    
    
    
    918Amortization of intangible assets
    
    
    693
    
    
    
    905Total operating expenses
    
    
    61,544
    
    
    
    51,442Income from operations
    
    
    4,198
    
    
    
    7,738Other income (expense), net
    
    
    (109
    )
    
    
    1,075Gains on investments, net
    
    
    582
    
    
    
    425Income before income taxes
    
    
    4,671
    
    
    
    9,238Income tax provision
    
    
    1,760
    
    
    
    3,466Net income
    
    $
    2,911
    
    
    $
    5,772Basic income per common share
    
    $
    0.13
    
    
    $
    0.26Diluted income per
common share
    
    $
    0.13
    
    
    $
    0.25Basic weighted
average common shares
outstanding
    
    
    22,713
    
    
    
    22,389Diluted weighted
average common shares
outstanding
    
    
    23,252
    
    
    
    22,877
  4




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##### Table of Contents



Three Months Ended March 31,2011
    
    
    2010(Unaudited)Cash flows
from operating
activities:Net income
    
    $
    2,911
    
    
    $
    5,772Adjustments to reconcile net income to net cash provided by operating
activities:Depreciation
    
    
    970
    
    
    
    919Amortization of intangible assets
    
    
    693
    
    
    
    905Net gains from
investments
    
    
    (582
    )
    
    
    (425
    )Deferred income taxes
    
    
    495
    
    
    
    (336
    )Stock-based
compensation
    
    
    1,438
    
    
    
    1,106Amortization of
premium on
investments
    
    
    812
    
    
    
    400Foreign currency
(gains) losses
    
    
    562
    
    
    
    (386
    )Other non-cash items
    
    
    
    
    
    
    193Changes in assets
and liabilities,
net of acquisitionsAccounts receivable
    
    
    25,956
    
    
    
    19,809Deferred commissions
    
    
    804
    
    
    
    (469
    )Prepaid expenses
and other current
assets
    
    
    (2,627
    )
    
    
    (3,998
    )Accounts payable
    
    
    988
    
    
    
    900Accrued expenses
    
    
    (4,754
    )
    
    
    (2,350
    )Deferred revenue
    
    
    4,495
    
    
    
    1,088Net cash provided
by operating
activities
    
    
    32,161
    
    
    
    23,128Cash flows from
investing
activities:Acquisitions
    
    
    
    
    
    
    (1,660
    )Purchases of property and equipment
    
    
    (10,711
    )
    
    
    (1,402
    )Purchases of
marketable
investments
    
    
    (32,038
    )
    
    
    (19,820
    )Proceeds from sales
and maturities of
marketable
investments
    
    
    18,039
    
    
    
    33,566Decrease in
restricted cash
    
    
    7,182
    
    
    
    1,934Other investing
activity
    
    
    82
    
    
    
    39Net cash provided
by (used in)
investing
activities
    
    
    (17,446
    )
    
    
    12,657Cash flows from
financing
activities:Proceeds from issuance of common stock under employee equity
incentive plans
    
    
    2,055
    
    
    
    3,780Excess tax benefits from stock-based compensation
    
    
    31
    
    
    
    133Repurchases of
common stock
    
    
    (8,567
    )
    
    
    Net cash provided
by (used in)
financing
activities
    
    
    (6,481
    )
    
    
    3,913Effect of exchange
rate changes on
cash and cash
equivalents
    
    
    2,439
    
    
    
    (2,257
    )Net increase in
cash and cash
equivalents
    
    
    10,673
    
    
    
    37,441Cash and cash
equivalents,
beginning of period
    
    
    86,927
    
    
    
    97,805Cash and cash
equivalents, end of
period
    
    $
    97,600
    
    
    $
    135,246
  5




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##### Table of Contents



FORRESTER RESEARCH, INC.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 1  Interim Consolidated Financial Statements
 Basis of Presentation
  Note 2  Revenue Recognition
 Multiple-Deliverable Revenue
Arrangements  a consensus of the FASB Emerging Issues Task Force
   6




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##### Table of Contents



FORRESTER RESEARCH, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Note 3  Marketable Investments
  Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    MarketCost
    
    
    Gains
    
    
    Losses
    
    
    ValueMarch 31, 2011Available-for-sale securitiesState and municipal obligations
    
    $
    11,968
    
    
    $
    22
    
    
    $
    (17
    )
    
    
    11,973Federal agency and corporate obligations
    
    
    120,909
    
    
    
    378
    
    
    
    (170
    )
    
    
    121,117Total short-term available-for-sale securities
    
    
    132,877
    
    
    
    400
    
    
    
    (187
    )
    
    
    133,090ARS, long-term
    
    
    11,000
    
    
    
    
    
    
    
    (1,883
    )
    
    
    9,117Total available-for-sale securities
    
    $
    143,877
    
    
    $
    400
    
    
    $
    (2,070
    )
    
    $
    142,207
 Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    MarketCost
    
    
    Gains
    
    
    Losses
    
    
    ValueDecember 31, 2010Available-for-sale securitiesState and municipal obligations
    
    $
    12,011
    
    
    $
    23
    
    
    $
    (25
    )
    
    $
    12,009Federal agency and corporate obligations
    
    
    107,669
    
    
    
    483
    
    
    
    (171
    )
    
    
    107,981Total short-term available-for-sale securities
    
    
    119,680
    
    
    
    506
    
    
    
    (196
    )
    
    
    119,990ARS, long-term
    
    
    11,000
    
    
    
    
    
    
    
    (1,883
    )
    
    
    9,117Total available-for-sale securities
    
    $
    130,680
    
    
    $
    506
    
    
    $
    (2,079
    )
    
    $
    129,107
   FY2011
    
    
    FY2012
    
    
    FY2013
    
    
    Thereafter
    
    
    TotalFederal agency and corporate obligations
    
    $
    42,016
    
    
    $
    50,542
    
    
    $
    23,560
    
    
    $
    4,999
    
    
    $
    121,117State and municipal obligations
    
    
    6,213
    
    
    
    5,760
    
    
    
    
    
    
    
    
    
    
    
    11,973ARS
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,117
    
    
    
    9,117Total short and long-term
    
    $
    48,229
    
    
    $
    56,302
    
    
    $
    23,560
    
    
    $
    14,116
    
    
    $
    142,207
  7




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##### Table of Contents



FORRESTER RESEARCH, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 As of March 31, 2011Less Than 12 Months
    
    
    12 Months or GreaterMarket
    
    
    Unrealized
    
    
    Market
    
    
    UnrealizedValue
    
    
    Losses
    
    
    Value
    
    
    LossesState and municipal bonds
    
    $
    1,120
    
    
    $
    17
    
    
    $
    
    
    
    $
    Federal agency and
corporate obligations
    
    
    51,533
    
    
    
    170
    
    
    
    
    
    
    
    ARS
    
    
    
    
    
    
    
    
    
    
    9,117
    
    
    
    1,883Total
    
    $
    52,653
    
    
    $
    187
    
    
    $
    9,117
    
    
    $
    1,883
 As of December 31, 2010Less Than 12 Months
    
    
    12 Months or GreaterMarket
    
    
    Unrealized
    
    
    Market
    
    
    UnrealizedValue
    
    
    Losses
    
    
    Value
    
    
    LossesState and municipal bonds
    
    $
    3,258
    
    
    $
    25
    
    
    $
    
    
    
    $
    Federal agency and
corporate obligations
    
    
    45,928
    
    
    
    171
    
    
    
    
    
    
    
    ARS
    
    
    
    
    
    
    
    
    
    
    9,117
    
    
    
    1,883Total
    
    $
    49,186
    
    
    $
    196
    
    
    $
    9,117
    
    
    $
    1,883
 Fair Value
      As of March 31, 2011Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    TotalMoney market funds (1)
    
    $
    5,696
    
    
    $
    
    
    
    $
    
    
    
    $
    5,696Federal agency and corporate obligations (2)
    
    
    
    
    
    
    126,014
    
    
    
    
    
    
    
    126,014State and municipal obligations (3)
    
    
    
    
    
    
    14,073
    
    
    
    9,117
    
    
    
    23,190Total
    
    $
    5,696
    
    
    $
    140,087
    
    
    $
    9,117
    
    
    $
    154,900
 As of December 31, 2010Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    TotalMoney market funds (1)
    
    $
    25,222
    
    
    $
    
    
    
    $
    
    
    
    $
    25,222Federal agency and corporate obligations
    
    
    
    
    
    
    107,981
    
    
    
    
    
    
    
    107,981State and municipal obligations
    
    
    
    
    
    
    12,009
    
    
    
    9,117
    
    
    
    21,126Total
    
    $
    25,222
    
    
    $
    119,990
    
    
    $
    9,117
    
    
    $
    154,329
 
 (1)
    
    Included in cash and cash equivalents.(2)
    
    $4,897 included in cash and cash equivalents as original maturities at the time of
purchase were 90 days or less. 8




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FORRESTER RESEARCH, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 (3)
    
    $2,100 included in cash and cash equivalents as original maturities at the time of
purchase were 90 days or less.     ARSBalance at December 31, 2010
    
    $
    9,117Sales/Maturities
    
    
    Total gains (losses):Included in other comprehensive income
    
    
    Included in earnings
    
    
    Balance at March 31, 2011
    
    $
    9,117
 9




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FORRESTER RESEARCH, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 UBSRight
    
    
    ARSBalance at December 31, 2009
    
    $
    2,100
    
    
    $
    39,525Sales/Maturities
    
    
    
    
    
    
    (2,450
    )Total gains (losses):Included in other comprehensive
income
    
    
    
    
    
    
    272Included in earnings
    
    
    (350
    )
    
    
    350Balance at March 31, 2010
    
    $
    1,750
    
    
    $
    37,697
 Note 4 Non-Marketable Investments
   Note 5  Reorganization
  FacilityConsolidation
    
    
    TotalAccrual at December 31, 2010
    
    $
    446
    
    
    $
    446Cash payments
    
    
    (195
    )
    
    
    (195
    )Accrual at March 31, 2011
    
    $
    251
    
    
    $
    251
  Note 6  Net Income Per Common Share
   Three Months EndedMarch 31,2011
    
    
    2010Basic weighted average common shares outstanding
    
    
    22,713
    
    
    
    22,389Weighted average common equivalent shares
    
    
    539
    
    
    
    488Diluted weighted average common shares outstanding
    
    
    23,252
    
    
    
    22,877Options excluded from diluted weighted average share calculation
as effect would have been anti-dilutive
    
    
    57
    
    
    
    773
 10




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##### Table of Contents



FORRESTER RESEARCH, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Note 7  Stockholders Equity
 Comprehensive Income
  Three Months EndedMarch 31,2011
    
    
    2010Net income
    
    $
    2,911
    
    
    $
    5,772Cumulative translation adjustment
    
    
    2,264
    
    
    
    (2,313
    )Unrealized gain (loss) on marketable investments, net of tax
    
    
    (1
    )
    
    
    50Total comprehensive income
    
    $
    5,174
    
    
    $
    3,509
 Equity Plans
  Weighted -
    
    
    Weighted -Average
    
    
    AverageExercise
    
    
    Remaining
    
    
    AggregateNumber
    
    
    Price Per
    
    
    Contractual
    
    
    Intrinsicof Shares
    
    
    Share
    
    
    Term (in years)
    
    
    ValueOutstanding at December 31,
2010
    
    
    2,215
    
    
    $
    26.00Granted
    
    
    39
    
    
    
    36.13Exercised
    
    
    (78
    )
    
    
    26.09Forfeited
    
    
    (38
    )
    
    
    32.82Outstanding at March 31, 2011
    
    
    2,138
    
    
    $
    26.06
    
    
    
    6.59
    
    
    $
    26,150Exercisable at March 31, 2011
    
    
    1,311
    
    
    $
    24.70
    
    
    
    5.41
    
    
    $
    17,813
  Weighted-AverageGrant DateRSUs
    
    
    Fair ValueUnvested at December 31, 2010
    
    
    192
    
    
    $
    27.64Granted
    
    
    
    
    
    
    Vested or settled
    
    
    
    
    
    
    Forfeited
    
    
    (8
    )
    
    
    27.36Unvested at March 31, 2011
    
    
    184
    
    
    $
    27.65
 Stock-Based Compensation
  11




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FORRESTER RESEARCH, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Three Months EndedMarch 31,2011
    
    
    2010Cost of services and fulfillment
    
    $
    615
    
    
    $
    449Selling and marketing
    
    
    339
    
    
    
    244General and administrative
    
    
    484
    
    
    
    413Total
    
    $
    1,438
    
    
    $
    1,106
  Three Months Ended
    
    
    Three Months EndedMarch 31, 2011
    
    
    March 31, 2010Equity Incentive
    
    
    Employee Stock
    
    
    Equity Incentive
    
    
    Employee StockPlans
    
    
    Purchase Plan
    
    
    Plans
    
    
    Purchase PlanAverage risk-free interest rate
    
    
    1.51
    %
    
    
    0.18
    %
    
    
    1.99
    %
    
    
    0.15
    %Expected dividend yield
    
    None
    
    
    None
    
    
    None
    
    
    NoneExpected life
    
    3.5 Years
    
    
    0.5 Years
    
    
    3.5 Years
    
    
    0.5 YearsExpected volatility
    
    
    40
    %
    
    
    28
    %
    
    
    40
    %
    
    
    25
    %Weighted average fair value
    
    $
    11.05
    
    
    $
    8.23
    
    
    $
    8.58
    
    
    $
    5.89
 Treasury Stock
  Note 8  Income Taxes
  Note 9  Operating Segments
     12




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FORRESTER RESEARCH, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 IT
    
    
    TI
    
    
    M&S
    
    
    Events
    
    
    ConsolidatedThree months ended March 31, 2011Revenue
    
    $
    24,034
    
    
    $
    19,640
    
    
    $
    20,063
    
    
    $
    2,005
    
    
    $
    65,742Direct margin
    
    
    16,187
    
    
    
    14,600
    
    
    
    12,208
    
    
    
    588
    
    
    
    43,583Selling, marketing, administrative and other expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (38,692
    )Amortization of intangible assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (693
    )Income from operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    4,198
 IT
    
    
    TI
    
    
    M&S
    
    
    Events
    
    
    ConsolidatedThree months ended March 31, 2010Revenue
    
    $
    22,811
    
    
    $
    18,530
    
    
    $
    16,760
    
    
    $
    1,079
    
    
    $
    59,180Direct margin
    
    
    15,913
    
    
    
    13,915
    
    
    
    10,159
    
    
    
    (120
    )
    
    
    39,867Selling, marketing, administrative and other expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (31,224
    )Amortization of intangible assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (905
    )Income from operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    7,738
 13




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##### Table of Contents



Overview
     
    
    Deferred revenue- billings in advance of revenue recognition as of the measurement date.
    
    Agreement value- the total revenues recognizable from all research and advisory service
contracts in force at a given time (but not including advisory-only contracts), without
regard to how much revenue has already been recognized.
    
    Client retention- the percentage of client companies with memberships expiring during
the most recent twelve-month period that renewed one or more of those memberships during
that same period.
    
    Dollar retention- the percentage of the dollar value of all client membership
contracts renewed during the most recent twelve-month period to the total dollar value
of all client membership contracts that expired during the period.
    
    Enrichment- the percentage of the dollar value of client membership contracts renewed
during the most recent twelve-month period to the dollar value of the corresponding
expiring contracts.
  14




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As of
    
    
    Absolute
    
    
    PercentageMarch 31,
    
    
    Increase
    
    
    Increase2011
    
    
    2010
    
    
    (Decrease)
    
    
    (Decrease)Deferred revenue
    
    $
    137.5
    
    
    $
    117.6
    
    
    $
    19.9
    
    
    
    17
    %Agreement value
    
    $
    200.5
    
    
    $
    185.3
    
    
    $
    15.2
    
    
    
    8
    %Client retention
    
    
    80
    %
    
    
    77
    %
    
    
    3
    
    
    
    4
    %Dollar retention
    
    
    91
    %
    
    
    88
    %
    
    
    3
    
    
    
    3
    %Enrichment
    
    
    103
    %
    
    
    98
    %
    
    
    5
    
    
    
    5
    %Number of clients
    
    
    2,605
    
    
    
    2,487
    
    
    
    118
    
    
    
    5
    %
  Critical Accounting Policies and Estimates
 Multiple-Deliverable Revenue Arrangements 
a consensus of the FASB Emerging Issue Task Force
 Multiple-Deliverable
 Revenue Arrangements  a consensus of the FASB Emerging Issues Task Force
   Results of Operations
  Three Months EndedMarch 31,2011
    
    
    2010Revenues:Research services
    
    
    68
    %
    
    
    67
    %Advisory services and other
    
    
    32
    
    
    
    33Total revenues
    
    
    100
    
    
    
    100Operating expenses:Cost of services and fulfillment
    
    
    39
    
    
    
    38Selling and marketing
    
    
    39
    
    
    
    34General and administrative
    
    
    14
    
    
    
    12Depreciation
    
    
    1
    
    
    
    2Amortization of intangible
assets
    
    
    1
    
    
    
    1Income from
operations
    
    
    6
    
    
    
    13Other income, net
    
    
    
    
    
    
    2Gains on investments, net
    
    
    1
    
    
    
    1Income before income taxes
    
    
    7
    
    
    
    16Income tax provision
    
    
    3
    
    
    
    6Net income
    
    
    4
    %
    
    
    10
    %
 Three Months Ended March 31, 2011 and March 31, 2010
 Revenues
 15




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Three Months Ended
    
    
    Absolute
    
    
    PercentageMarch 31,
    
    
    Increase
    
    
    Increase2011
    
    
    2010
    
    
    (Decrease)
    
    
    (Decrease)(dollars in millions)Revenues
    
    $
    65.7
    
    
    $
    59.2
    
    
    $
    6.5
    
    
    
    11
    %Revenues from research services
    
    $
    44.5
    
    
    $
    39.4
    
    
    $
    5.1
    
    
    
    13
    %Revenues from advisory services and other
    
    $
    21.2
    
    
    $
    19.8
    
    
    $
    1.4
    
    
    
    7
    %Revenues
attributable to customers outside of the U.S.
    
    $
    19.9
    
    
    $
    17.6
    
    
    $
    2.3
    
    
    
    13
    %Percentage of revenue attributable to customers outside
of the U.S.
    
    
    30
    %
    
    
    30
    %
    
    
    
    
    
    
    Number of clients (at end of period)
    
    
    2,605
    
    
    
    2,487
    
    
    
    118
    
    
    
    5
    %Number of events
    
    
    4
    
    
    
    4
    
    
    
    
    
    
    
    
  Cost of Services and Fulfillment
 Three Months Ended
    
    
    Absolute
    
    
    PercentageMarch 31,
    
    
    Increase
    
    
    Increase2011
    
    
    2010
    
    
    (Decrease)
    
    
    (Decrease)Cost of services and fulfillment (dollars in millions)
    
    $
    25.5
    
    
    $
    22.3
    
    
    $
    3.2
    
    
    
    14
    %Cost of services and fulfillment as a percentage of
total revenues
    
    
    39
    %
    
    
    38
    %
    
    
    1
    
    
    
    3
    %Number of research and fulfillment employees (at end
of period)
    
    
    482
    
    
    
    429
    
    
    
    53
    
    
    
    12
    %
  Selling and Marketing
 Three Months Ended
    
    
    Absolute
    
    
    PercentageMarch 31,
    
    
    Increase
    
    
    Increase2011
    
    
    2010
    
    
    (Decrease)
    
    
    (Decrease)Selling and marketing expenses (dollars in millions)
    
    $
    25.5
    
    
    $
    20.1
    
    
    $
    5.4
    
    
    
    27
    %Selling and marketing expenses as a percentage
of total revenues
    
    
    39
    %
    
    
    34
    %
    
    
    5
    
    
    
    15
    %Selling and marketing employees (at end of period)
    
    
    465
    
    
    
    404
    
    
    
    61
    
    
    
    15
    %
  16




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General and Administrative
 Three Months Ended
    
    
    Absolute
    
    
    PercentageMarch 31,
    
    
    Increase
    
    
    Increase2011
    
    
    2010
    
    
    (Decrease)
    
    
    (Decrease)General and administrative expenses (dollars in millions)
    
    $
    8.9
    
    
    $
    7.2
    
    
    $
    1.7
    
    
    
    24
    %General and administrative expenses as a percentage
of total revenues
    
    
    14
    %
    
    
    12
    %
    
    
    2
    
    
    
    17
    %General and administrative employees (at end of period)
    
    
    173
    
    
    
    153
    
    
    
    20
    
    
    
    13
    %
  Depreciation
 Three Months Ended
    
    
    Absolute
    
    
    PercentageMarch 31,
    
    
    Increase
    
    
    Increase2011
    
    
    2010
    
    
    (Decrease)
    
    
    (Decrease)Depreciation expense (dollars in millions)
    
    $
    1.0
    
    
    $
    0.9
    
    
    $
    0.1
    
    
    
    11
    %Depreciation expense as a percentage of total revenues
    
    
    1
    %
    
    
    2
    %
    
    
    (1
    )
    
    
    (50
    %)
  Amortization of Intangible Assets
 Three Months Ended
    
    
    Absolute
    
    
    PercentageMarch 31,
    
    
    Increase
    
    
    Increase2011
    
    
    2010
    
    
    (Decrease)
    
    
    (Decrease)Amortization expense (dollars in millions)
    
    $
    0.7
    
    
    $
    0.9
    
    
    $
    (0.2
    )
    
    
    (22
    %)Amortization expense as a percentage of total revenues
    
    
    1
    %
    
    
    1
    %
    
    
    
    
    
    
    
  Other Income (Expense), Net
 Three Months Ended
    
    
    Absolute
    
    
    PercentageMarch 31,
    
    
    Increase
    
    
    Increase2011
    
    
    2010
    
    
    (Decrease)
    
    
    (Decrease)Other
income(expense),
net (dollars in
millions)
    
    $
    (0.1
    )
    
    $
    1.1
    
    
    $
    (1.2
    )
    
    
    (112
    %)Other
income(expense),
net as a percentage
of total revenues
    
    
    
    
    
    
    2
    %
    
    
    (2
    )
    
    
    (100
    %)
  Gains on Investments, Net
 17




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Three Months Ended
    
    
    Absolute
    
    
    PercentageMarch 31,
    
    
    Increase
    
    
    Increase2011
    
    
    2010
    
    
    (Decrease)
    
    
    (Decrease)Gains on investments, net (dollars in millions)
    
    $
    0.6
    
    
    $
    0.4
    
    
    $
    0.2
    
    
    
    47
    %Gains on investments, net as a percentage
of total revenues
    
    
    1
    %
    
    
    1
    %
    
    
    
    
    
    
    
  Provision for Income Taxes
 Three Months Ended
    
    
    Absolute
    
    
    PercentageMarch 31,
    
    
    Increase
    
    
    Increase2011
    
    
    2010
    
    
    (Decrease)
    
    
    (Decrease)Provision for
income taxes
(dollars in
millions)
    
    $
    1.8
    
    
    $
    3.5
    
    
    $
    (1.7
    )
    
    
    (49
    %)Effective tax rate
    
    
    38
    %
    
    
    38
    %
    
    
    
    
    
    
    
  Liquidity and Capital Resources
     18




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Contractual Obligations
  Off-Balance Sheet Arrangements
  
   
  Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control Over Financial Reporting
  
  
   
   19




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Maximum DollarValue that MayYet be PurchasedTotal Number of
    
    
    Average Price
    
    
    Under the StockPeriod
    
    Shares Purchased (1)
    
    
    Paid per Share
    
    
    Repurchase Program(In thousands)January 1- January 31
    
    
    73,020
    
    
    $
    35.60
    
    
    $
    94,806February 1 - February 28
    
    
    99,548
    
    
    $
    35.91
    
    
    $
    91,231March 1 - March 31
    
    
    64,300
    
    
    $
    37.20
    
    
    $
    88,839236,868
 
 (1)
    
    All purchases of our common stock were made under the stock repurchase program first announced in 2002. 20




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##### Table of Contents



31.1
    
    Certification of the Principal Executive Officer31.2
    
    Certification of the Principal Financial Officer32.1
    
    Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 21




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##### Table of Contents



FORRESTER RESEARCH, INC.By:
    /s/ Michael A. DoyleMichael A. DoyleChief Financial Officer and Treasurer

(Principal financial officer)  22




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##### Table of Contents



Exhibit No.
    
    Document31.1
    
    Certification of the Principal Executive Officer31.2
    
    Certification of the Principal Financial Officer32.1
    
    Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 23