10-Q

FORM 10-Q

(MARK ONE)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934.

FOR THE QUARTERLY PERIOD ENDED March 31, 2013

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934.

COMMISSION FILE NUMBER: 000-21433

FORRESTER RESEARCH, INC.

(Exact name of registrant as specified in its charter)

DELAWARE	04-2797789
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

60 Acorn Park Drive CAMBRIDGE, MASSACHUSETTS	02140
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (617) 613-6000

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

As of May 7, 2013, 20,528,000 shares of the registrant’s common stock were outstanding.

FORRESTER RESEARCH, INC.

INDEX TO FORM 10-Q

	PAGE
PART I. FINANCIAL INFORMATION		3
ITEM 1. Financial Statements		3
Consolidated Balance Sheets as of March 31, 2013 and December 31, 2012 (Unaudited)		3
Consolidated Statements of Income for the Three Months Ended March 31, 2013 and 2012 (Unaudited)		4
Consolidated Statements of Comprehensive Income for the Three Months Ended March  31, 2013 and 2012 (Unaudited)		5
Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2013 and 2012 (Unaudited)		6
Notes to Consolidated Financial Statements		7
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		13
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk		17
ITEM 4. Controls and Procedures		17
PART II. OTHER INFORMATION		18
ITEM 1A. Risk Factors		18
ITEM 6. Exhibits		19

2

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

FORRESTER RESEARCH, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data, unaudited)

	March 31, 2013			December 31, 2012
ASSETS
Current Assets:
Cash and cash equivalents	$	143,944		$	98,810
Marketable investments (Note 2)		120,608			134,876
Accounts receivable, net		49,160			74,623
Deferred commissions		9,616			9,410
Prepaid expenses and other current assets		18,036			18,846
Total current assets		341,364			336,565
Long-term marketable investments (Note 2)		8,926			8,970
Property and equipment, net		44,554			46,300
Goodwill		78,152			78,954
Intangible assets, net		7,291			7,920
Other assets		9,815			9,123
Total assets	$	490,102		$	487,832
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	922		$	772
Accrued expenses and other current liabilities		29,586			30,078
Deferred revenue		152,188			150,479
Total current liabilities		182,696			181,329
Non-current liabilities		9,318			9,433
Total liabilities		192,014			190,762
Commitments
Stockholders’ Equity (Note 6):
Preferred stock, $.01 par value
Authorized - 500 shares, issued and outstanding - none		—			—
Common stock, $.01 par value
Authorized - 125,000 shares
Issued - 31,522 and 31,451 as of March 31, 2013 and December 31, 2012, respectively
Outstanding - 22,364 and 22,293 as of March 31, 2013 and December 31, 2012, respectively		315			315
Additional paid-in capital		392,790			389,362
Retained earnings		116,639			117,648
Treasury stock - 9,158 as of March 31, 2013 and December 31, 2012, at cost		(210,843	)		(210,843	)
Accumulated other comprehensive income (loss)		(813	)		588
Total stockholders’ equity		298,088			297,070
Total liabilities and stockholders’ equity	$	490,102		$	487,832

The accompanying notes are an integral part of these consolidated financial statements.

3

FORRESTER RESEARCH, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data, unaudited)

	Three Months Ended March 31,
	2013			2012
Revenues:
Research services	$	50,378		$	49,760
Advisory services and other		21,121			20,500
Total revenues		71,499			70,260
Operating expenses:
Cost of services and fulfillment		27,027			26,938
Selling and marketing		27,057			25,133
General and administrative		9,487			9,611
Depreciation		2,360			1,993
Amortization of intangible assets		559			614
Reorganization costs		1,591			1,343
Total operating expenses		68,081			65,632
Income from operations		3,418			4,628
Other income, net		376			409
Gains (losses) on investments, net		(51	)		59
Income before income taxes		3,743			5,096
Income tax provision		1,402			1,915
Net income	$	2,341		$	3,181
Basic income per common share	$	0.10		$	0.14
Diluted income per common share	$	0.10		$	0.14
Basic weighted average common shares outstanding		22,306			22,738
Diluted weighted average common shares outstanding		22,658			23,173
Cash dividends declared per common share	$	0.15		$	0.14

The accompanying notes are an integral part of these consolidated financial statements.

4

FORRESTER RESEARCH, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands, unaudited)

	Three Months Ended March 31,
	2013			2012
Net income	$	2,341		$	3,181
Other comprehensive income, net of taxes:
Cumulative translation adjustments		(1,355	)		681
Changes in market value of investments:
Unrealized gain (loss), net of taxes (benefits) of $(3) and $140		(46	)		316
Less: reclassification adjustment for net gains realized in net income, net of taxes of $0 and $8		—			(13	)
Net change in market value of investments		(46	)		303
Other comprehensive income (loss)		(1,401	)		984
Comprehensive income	$	940		$	4,165

The accompanying notes are an integral part of these consolidated financial statements.

5

FORRESTER RESEARCH, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, unaudited)

	Three Months Ended March 31,
	2013			2012
Cash flows from operating activities:
Net income	$	2,341		$	3,181
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		2,360			1,993
Amortization of intangible assets		559			614
Net (gains) losses from investments		51			(59	)
Deferred income taxes		(1,519	)		(549	)
Stock-based compensation		1,860			1,323
Amortization of premium on investments		636			759
Foreign currency gains		(72	)		(8	)
Changes in assets and liabilities, net of acquisitions
Accounts receivable		25,186			29,518
Deferred commissions		(206	)		1,743
Prepaid expenses and other current assets		1,271			(5,317	)
Accounts payable		111			(544	)
Accrued expenses and other liabilities		166			(669	)
Deferred revenue		2,709			2,901
Net cash provided by operating activities		35,453			34,886
Cash flows from investing activities:
Purchases of property and equipment		(939	)		(2,418	)
Purchases of marketable investments		(4,125	)		(40,301	)
Proceeds from sales and maturities of marketable investments		17,750			34,090
Change in restricted cash		—			946
Other investing activity		75			33
Net cash provided by (used in) investing activities		12,761			(7,650	)
Cash flows from financing activities:
Dividend paid on common stock		(3,350	)		(3,195	)
Repurchases of common stock		—			(7,700	)
Proceeds from issuance of common stock under employee equity incentive plans		1,447			1,997
Excess tax benefits from stock-based compensation		109			183
Payment of deferred acquisition consideration		—			(139	)
Net cash used in financing activities		(1,794	)		(8,854	)
Effect of exchange rate changes on cash and cash equivalents		(1,286	)		978
Net increase in cash and cash equivalents		45,134			19,360
Cash and cash equivalents, beginning of period		98,810			81,047
Cash and cash equivalents, end of period	$	143,944		$	100,407

The accompanying notes are an integral part of these consolidated financial statements.

6

FORRESTER RESEARCH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 — Interim Consolidated Financial Statements

Basis of Presentation

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for reporting on Form 10-Q. Accordingly, certain information and footnote disclosures required for complete financial statements are not included herein. The year-end balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. It is recommended that these financial statements be read in conjunction with the consolidated financial statements and related notes that appear in the Forrester Research, Inc. (“Forrester”) Annual Report on Form 10-K for the year ended December 31, 2012. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the financial position, results of operations, and cash flows as of the dates and for the periods presented have been included. The results of operations for the three months ended March 31, 2013 may not be indicative of the results for the year ending December 31, 2013, or any other period.

Fair Value Measurements

The carrying amounts reflected in the Consolidated Balance Sheets for cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate fair value due to their short-term maturities. See Note 2 – Marketable Investments for the fair value of the Company’s marketable investments.

Note 2 — Marketable Investments

The following table summarizes the Company’s marketable investments (in thousands):

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Market Value
March 31, 2013
Available-for-sale securities
State and municipal obligations	$	18,669	$	36	$	—		$	18,705
Federal agency and corporate obligations		101,580		338		(15	)		101,903
Total short-term available-for-sale securities		120,249		374		(15	)		120,608
ARS, long-term		11,000		—		(2,074	)		8,926
Total available-for-sale securities	$	131,249	$	374	$	(2,089	)	$	129,534

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Market Value
December 31, 2012
Available-for-sale securities
State and municipal obligations	$	18,859	$	27	$	(14	)	$	18,872
Federal agency and corporate obligations		115,653		380		(29	)		116,004
Total short-term available-for-sale securities		134,512		407		(43	)		134,876
ARS, long-term		11,000		—		(2,030	)		8,970
Total available-for-sale securities	$	145,512	$	407	$	(2,073	)	$	143,846

Realized gains and losses on securities are included in earnings and are determined using the specific identification method. Realized gains or losses on the sale of the Company’s federal agency, state, municipal and corporate obligations were not material in the three months ended March 31, 2013 or 2012.

The following table summarizes the maturity periods of the marketable securities in the Company’s portfolio as of March 31, 2013. In February 2008, certain auction rate securities (“ARS”) that Forrester held experienced failed auctions that limited the liquidity of these securities. These auction failures have continued and based on current market conditions, it is likely that auction failures will continue. The following table reflects the ARS at their contractual maturity dates of between 2024 and 2034 (in thousands).

	FY 2013		FY2014		FY2015		Thereafter		Total
State and municipal obligations	$	6,366	$	10,224	$	2,115	$	—	$	18,705
Federal agency and corporate obligations		33,193		47,892		20,818		—		101,903
ARS		—		—		—		8,926		8,926
Total	$	39,559	$	58,116	$	22,933	$	8,926	$	129,534

7

The following table shows the gross unrealized losses and market value of Forrester’s available-for-sale securities with unrealized losses that are not deemed to be other-than-temporary, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position (in thousands):

	As of March 31, 2013
	Less Than 12 Months				12 Months or Greater
	Market Value		Unrealized Losses		Market Value		Unrealized Losses
State and municipal bonds	$	—	$	—	$	—	$	—
Federal agency and corporate obligations		8,976		15		—		—
ARS		—		—		8,926		2,074
Total	$	8,976	$	15	$	8,926	$	2,074

	As of December 31, 2012
	Less Than 12 Months				12 Months or Greater
	Market Value		Unrealized Losses		Market Value		Unrealized Losses
State and municipal bonds	$	9,430	$	14	$	—	$	—
Federal agency and corporate obligations		17,716		29		—		—
ARS		—		—		8,970		2,030
Total	$	27,146	$	43	$	8,970	$	2,030

Fair Value

The Company measures certain financial assets at fair value on a recurring basis, including cash equivalents, available-for-sale securities and trading securities. The fair values of these financial assets have been classified as Level 1, 2 or 3 within the fair value hierarchy as described in the accounting standards for fair value measurements.

Level 1 - Fair value based on quoted prices in active markets for identical assets or liabilities.

Level 2 - Fair value based on inputs other than Level 1 inputs that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Fair value based on unobservable inputs that are supported by little or no market activity and such inputs are significant to the fair value of the assets or liabilities.

The following table represents the Company’s fair value hierarchy for its financial assets (cash equivalents and investments) measured at fair value on a recurring basis as of March 31, 2013 and December 31, 2012 (in thousands):

	As of March 31, 2013
	Level 1		Level 2		Level 3		Total
Money market funds (1)	$	15,314	$	—	$	—	$	15,314
State and municipal obligations		—		18,705		—		18,705
Federal agency and corporate obligations (2)		—		151,903		—		151,903
ARS		—		—		8,926		8,926
Total	$	15,314	$	170,608	$	8,926	$	194,848

	As of December 31, 2012
	Level 1		Level 2		Level 3		Total
Money market funds (1)	$	815	$	—	$	—	$	815
State and municipal obligations		—		18,872		—		18,872
Federal agency and corporate obligations (2)		—		148,117		—		148,117
ARS		—		—		8,970		8,970
Total	$	815	$	166,989	$	8,970	$	176,774

(1) Included in cash and cash equivalents.

(2) $50.0 million and $32.1 million included in cash and cash equivalents at March 31, 2013 and December 31, 2012, respectively, as original maturities at the time of purchase were 90 days or less.

Level 2 assets consist of the Company’s entire portfolio of federal, state, municipal and corporate bonds, excluding those municipal bonds described below with an auction reset feature. Level 2 assets have been initially valued at the transaction price and subsequently valued, at the end of each reporting period, typically utilizing third party pricing services or other market observable data. The pricing services utilize industry standard valuation methods, including both income and market based approaches and observable market inputs to determine value. These observable market inputs include reportable trades, benchmark yields, credit spreads, broker/dealer quotes, bids, offers, current spot rates and other industry and economic events.

8

Level 3 assets at March 31, 2013 and December 31, 2012 consist entirely of municipal bonds with an auction reset feature (ARS). Prior to 2008, the fair value of the ARS investments approximated par value due to the frequent resets through the auction process. While the Company continues to receive interest income on its ARS investments at each interest reset date (which occurs at either seven or 35 day intervals for each security), these investments trade infrequently and therefore do not have a readily determinable market value. Interest rates on the securities ranged from 0.1% to 0.4% and 0.1% to 0.4% during the three months ended March 31, 2013 and 2012, respectively. The Company values the ARS using a discounted cash flow model that includes unobservable inputs including estimates of interest rates, discount rates and expected holding periods of the securities, which is considered a Level 3 valuation. Unobservable inputs included in the valuation as of March 31, 2013 include a weighted average interest rate of 1.1%, a weighted average discount rate of 4.3%, and a weighted average holding period of 8.7 years. The valuation resulted in an unrealized loss recorded in other comprehensive income (loss) in the Consolidated Balance Sheets of $2.1 million at March 31, 2013 and $2.0 million at December 31, 2012. The Company believes that the loss is temporary due to the strong underlying credit rating of the securities and the fact that the Company does not intend to sell the securities and is not likely to be required to sell the securities. The assumptions used in valuing the ARS are volatile and subject to change as the underlying sources of these assumptions and market conditions change. Significant increases or decreases in any of the valuation assumptions in isolation would result in a significant change in the fair value.

The following table provides a summary of changes in fair value of the Company’s Level 3 financial assets for the three months ended March 31, 2013 and 2012 (in thousands):

	ARS
Balance at December 31, 2012	$	8,970
Sales		—
Total gains (losses):
Included in other comprehensive income (loss)		(44	)
Balance at March 31, 2013	$	8,926

	ARS
Balance at December 31, 2011	$	9,565
Sales		—
Total gains (losses):
Included in other comprehensive income (loss)		16
Balance at March 31, 2012	$	9,581

Note 3 — Non-Marketable Investments

At March 31, 2013 and December 31, 2012, the carrying value of the Company’s non-marketable investments, which were composed primarily of interests in technology-related private equity funds, were $6.8 million and $6.9 million, respectively, and are included in other assets in the Consolidated Balance Sheets.

One of the Company’s investments, with a book value of $1.1 million and $1.2 million at March 31, 2013 and December 31, 2012, respectively, is being accounted for using the cost method and, accordingly, is valued at cost unless an other-than-temporary impairment in its value occurs. The other investments are being accounted for using the equity method as the investments are limited partnerships and the Company has an ownership interest in excess of 5% and, accordingly, the Company records its share of the investee’s operating results each period. The Company recorded a gain (loss) from its non-marketable investments of $(0.1) million and $0.1 million during the three months ended March 31, 2013 and 2012, respectively, which are included in gains (losses) on investments, net in the Consolidated Statements of Income.

Note 4 — Reorganization

The following table rolls forward the activity in the reorganization accrual for the three months ended March 31, 2013 (in thousands):

	Workforce Reduction
Accrual at December 31, 2012	$	14
Additions		1,591
Cash payments		(459	)
Accrual at March 31, 2013	$	1,146

In the first quarter of 2013 the Company incurred $1.6 million of severance and related costs for the elimination of 31 jobs or approximately 2.5% of its workforce worldwide to streamline its operations. The Company anticipates incurring an additional $0.3 million of severance and related costs in the second quarter of 2013 related to this reduction. The accrual at March 31, 2013 and any additional costs in the second quarter are expected to be paid by the end of 2013.

Note 5 — Net Income Per Common Share

Basic net income per common share is computed by dividing net income by the basic weighted average number of common shares outstanding during the period. Diluted net income per common share is computed by dividing net income by the diluted weighted average number of common shares and common equivalent shares outstanding during the period. The weighted average number of common equivalent shares outstanding has been determined in accordance with the treasury-stock method. Common equivalent shares consist of common stock issuable on the exercise of outstanding options and vesting of restricted stock units when dilutive.

9

Basic and diluted weighted average common shares are as follows (in thousands):

	Three Months Ended March 31,
	2013		2012
Basic weighted average common shares outstanding		22,306		22,738
Weighted average common equivalent shares		352		435
Diluted weighted average common shares outstanding		22,658		23,173
Options excluded from diluted weight average share calculation as effect would have been anti-dilutive		1,198		406

Note 6 — Stockholders’ Equity

Equity Plans

Stock option activity for the three months ended March 31, 2013 is presented below (in thousands, except per share data):

	Number of Shares			Weighted - Average Exercise Price Per Share		Weighted - Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding at December 31, 2012		1,936		$	29.03
Granted		62			27.68
Exercised		(45	)		18.61
Forfeited		(32	)		30.75
Outstanding at March 31, 2013		1,921		$	29.20		6.35	$	6,332
Exercisable at March 31, 2013		1,071		$	26.88		4.69	$	5,346

Restricted stock unit activity for the three months ended March 31, 2013 is presented below (in thousands, except per share data):

	Number of Shares			Weighted - Average Grant Date Fair Value
Unvested at December 31, 2012		301		$	32.98
Granted		7			27.55
Vested or settled		—			—
Forfeited		(44	)		30.30
Unvested at March 31, 2013		264		$	33.29

Stock-Based Compensation

Forrester recognizes the fair value of stock-based compensation in net income over the requisite service period of the individual grantee, which generally equals the vesting period. Stock-based compensation was recorded in the following expense categories (in thousands):

	Three Months Ended March 31,
	2013		2012
Cost of services and fulfillment	$	904	$	653
Selling and marketing		422		224
General and administrative		534		446
Total	$	1,860	$	1,323

In 2009, the Company issued to its employees 95,496 performance-based RSUs. The vesting of the RSUs was subject to performance criteria and would vest at 100% or 40% on April 1, 2012, or the RSUs could be forfeited, depending on whether specified revenue growth and certain operating margin targets related to full year 2011 performance were achieved. Based on 2011 financial performance, 40% of the then outstanding RSUs vested on April 1, 2012. Compensation expense in 2010 and 2009 was recognized based on an estimate of 100% vesting of the RSUs and in the second quarter of 2011 the Company modified it assessment of vesting to the 40% level.

10

In 2010, the Company issued to its employees approximately 63,000 performance-based RSUs. The vesting of the RSUs was subject to performance criteria and would vest at 100% or 40% on April 1, 2013, or the RSUs could be forfeited, depending on whether specified revenue growth and certain operating margin targets related to full year 2012 performance were achieved. Based on 2012 financial performance these RSUs were forfeited. Compensation expense through the third quarter of 2011 was recognized based on an estimate of 100% vesting of the RSUs and in the fourth quarter of 2011 the Company modified its assessment of vesting to a zero percent level. The Company continued to utilize a zero percent vesting estimate through the first quarter of 2013.

In 2011, the Company issued to its employees approximately 71,000 performance-based RSUs. The vesting of the RSUs is subject to performance criteria and will vest at 100% or 40% on April 1, 2014, or the RSUs could be forfeited, depending on whether specified revenue growth and certain operating margin targets related to full year 2013 performance are achieved. Compensation expense through the third quarter of 2011 was recognized based on an estimate of 100% vesting of the RSUs and in the fourth quarter of 2011 the Company modified its assessment of vesting to a zero percent level. The Company continued to utilize a zero percent vesting estimate through the first quarter of 2013.

Forrester utilizes the Black-Scholes valuation model for estimating the fair value of stock-based compensation. Options granted under the equity incentive plans and shares subject to purchase under the employee stock purchase plan were valued using the following assumptions:

	Three Months Ended March 31, 2013						Three Months Ended March 31, 2012
	Equity Incentive Plans			Employee Stock Purchase Plan			Equity Incentive Plans			Employee Stock Purchase Plan
Average risk-free interest rate		0.81	%		0.11	%		0.84	%		0.14	%
Expected dividend yield		2.1	%		2.1	%		1.7	%		1.7	%
Expected life		4.5 Years			0.5 Years			4.5 Years			0.5 Years
Expected volatility		40	%		25	%		40	%		31	%
Weighted average fair value	$	7.72		$	5.97		$	10.05		$	7.54

Dividends

In the first quarter of 2013, the Company declared and paid a dividend of $0.15 per share or $3.4 million in the aggregate. In the first quarter of 2012, the Company declared and paid a dividend of $0.14 per share or $3.2 million in the aggregate. In April 2013, the Company declared a dividend of $0.15 per share payable on June 19, 2013 to shareholders of record as of June 5, 2013.

Treasury Stock

Forrester’s Board of Directors has authorized an aggregate $360.0 million, including $50 million authorized in February 2013, to purchase common stock under the stock repurchase program. The shares repurchased may be used, among other things, in connection with Forrester’s employee and director equity incentive and purchase plans. As of March 31, 2013, Forrester had repurchased approximately 9.2 million shares of common stock at an aggregate cost of approximately $210.8 million.

Note 7 — Income Taxes

Forrester provides for income taxes on an interim basis according to management’s estimate of the effective tax rate expected to be applicable for the full fiscal year. Certain items such as changes in tax rates and tax benefits related to disqualifying dispositions of incentive stock options are treated as discrete items and are recorded in the period in which they arise.

Note 8 — Operating Segments

Forrester is organized into two client groups with each client group responsible for writing relevant research for the roles within the client organization on a worldwide basis. The two client groups, which are considered operating segments, are: Business Technology (“BT”) and Marketing and Strategy (“M&S”). In addition, the Company’s Events segment supports both client groups. Each client group generates revenues through sales of research, advisory and other service offerings targeted at specific roles within their targeted clients. Each client group consists of research personnel focused primarily on issues relevant to particular roles and to the day-to-day responsibilities of persons within the roles. Amounts included in the Events segment relate to the operations of the events production department. Revenue reported in the Events segment consists primarily of sponsorships and event tickets to Forrester events.

Forrester evaluates reportable segment performance and allocates resources based on direct margin. Direct margin, as presented below, is defined as operating income excluding sales expenses, certain marketing and fulfillment expenses, stock-based compensation expense, general and administrative expenses, depreciation expense, amortization of intangible assets and reorganization costs. In the first quarter of 2013, the Company modified segment direct margin for each of the BT and M&S client groups to reflect the transfer of revenue and direct costs related to one product line from BT to M&S and to reallocate certain shared consulting costs between BT & M&S. Accordingly, the 2012 amounts have been reclassified to conform to the current presentation. The accounting policies used by the segments are the same as those used in the consolidated financial statements.

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The following tables present information about reportable segments (in thousands):

	BT		M&S		Events			Consolidated
Three Months Ended March 31, 2013
Revenue	$	38,875	$	31,782	$	842		$	71,499
Direct margin		27,031		21,318		(263	)		48,086
Selling, marketing, administrative and other expenses									(42,518	)
Amortization of intangible assets									(559	)
Reorganization costs									(1,591	)
Other income and gains/losses on investments									325
Income before income taxes								$	3,743

	BT		M&S		Events			Consolidated
Three Months Ended March 31, 2012
Revenue	$	38,325	$	31,180	$	755		$	70,260
Direct margin		26,207		20,680		(293	)		46,594
Selling, marketing, administrative and other expenses									(40,009	)
Amortization of intangible assets									(614	)
Reorganization costs									(1,343	)
Other income and gains/losses on investments									468
Income before income taxes								$	5,096

Note 9 — Recent Accounting Pronouncements

In July 2012, the Financial Accounting Standards Board issued ASU No. 2012-02, Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment (ASU 2012-02). This newly issued accounting standard allows an entity the option to first assess qualitative factors to determine whether it is necessary to perform a quantitative impairment test for indefinite-lived intangibles other than goodwill. Under that option, an entity would no longer be required to calculate the fair value of an indefinite-lived intangible asset unless the entity determines, based on that qualitative assessment, that it is more likely than not that the fair value of the indefinite-lived intangible asset is less than its carrying amount. This ASU is effective for annual and interim indefinite-lived intangible asset impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted. As the Company does not have any indefinite-lived intangible assets as of March 31, 2013 other than goodwill, the adoption of this standard on January 1, 2013 did not have an impact on the Company’s consolidated results.

Note 10 — Subsequent Events

On April 3, 2013 the Company commenced a “modified Dutch auction” self-tender offer to repurchase up to $130 million of its common stock at a price per share within the range of $32.00 to $36.00. A “modified Dutch auction” self-tender offer allows stockholders to indicate how many shares and at what price within the company’s specified range (in increments of $0.25 per share) they wish to tender. When the tender offer expired, based upon the number of shares tendered and the prices specified by the tendering stockholders, the Company determined the purchase price, which was the lowest price per share within the range that enabled the Company to purchase up to $130 million of its common stock. The tender offer expired on May 1, 2013 and the Company purchased 2,054,732 shares of its common stock on May 7, 2013 at a purchase price per of $36.00 per share for an aggregate price of $74.0 million, excluding expenses related to the tender offer.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

This Quarterly Report on Form 10-Q contains 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 include, but are not limited to, statements about the adequacy of our liquidity and capital resources, future growth rates, anticipated increases in our sales force, future dividends, anticipated continued repurchases of our common stock, and remediation of our internal control over financial reporting. These statements are based on our current plans and expectations and involve risks and uncertainties that could cause actual future activities and results of operations to be materially different from those set forth in the forward-looking statements. Important factors that could cause actual future activities and results to differ include, among others, our ability to retain and enrich memberships for our research products and services, technology spending, the risks and challenges inherent in international business activities, our ability to offer new products and services, our dependence on key personnel, the ability to attract and retain professional staff, our ability to respond to business and economic conditions and market trends, the possibility of network disruptions and security breaches, competition and industry consolidation, possible variations in our quarterly operating results, and our ability to remediate the identified material weakness in our internal control over financial reporting as of December 31, 2012. These risks are described more completely in our Annual Report on Form 10-K for the year ended December 31, 2012. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.

We derive revenues from memberships to our research products and services, performing advisory services and consulting projects, and hosting events. We offer contracts for our research products that are typically renewable annually and payable in advance. Research revenues are recognized as revenue ratably over the term of the contract. Accordingly, a substantial portion of our billings are initially recorded as deferred revenue. Clients purchase advisory services independently and/or to supplement their memberships to our research. Billings attributable to advisory services and consulting projects are initially recorded as deferred revenue. Advisory service revenues, such as workshops, speeches and advisory days, are recognized when the customer receives the agreed upon deliverable. Consulting project revenues, which generally are short-term in nature and based upon fixed-fee agreements, are recognized as the services are provided. Event billings are also initially recorded as deferred revenue and are recognized as revenue upon completion of each event.

Our primary operating expenses consist of cost of services and fulfillment, selling and marketing expenses and general and administrative expenses. Cost of services and fulfillment represents the costs associated with the production and delivery of our products and services, including salaries, bonuses, employee benefits and stock-based compensation expense for research personnel and all associated editorial, travel, and support services. Selling and marketing expenses include salaries, sales commissions, bonuses, employee benefits, stock-based compensation expense, travel expenses, promotional costs and other costs incurred in marketing and selling our products and services. General and administrative expenses include the costs of the technology, operations, finance, and human resources groups and our other administrative functions, including salaries, bonuses, employee benefits, and stock-based compensation expense. Overhead costs such as facilities are allocated to these categories according to the number of employees in each group.

Deferred revenue, agreement value, client retention, dollar retention, enrichment and number of clients are metrics we believe are important to understanding our business. We believe that the amount of deferred revenue, along with the agreement value of contracts to purchase research and advisory services, provide a significant measure of our business activity. We define these metrics as follows:

• 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.

• Clients - we count as a single client the various divisions and subsidiaries of a corporate parent and we also aggregate separate instrumentalities of the federal, state, and provincial governments as a single client.

Client retention, dollar retention, and enrichment are not necessarily indicative of the rate of future retention of our revenue base. A summary of our key metrics is as follows (dollars in millions):

	As of March 31,						Absolute Increase (Decrease)			Percentage Increase (Decrease)
	2013			2012
Deferred revenue	$	152.2		$	151.7		$	0.5			—
Agreement value	$	218.6		$	220.7		$	(2.1	)		(1	%)
Client retention		77	%		80	%		(3	)		(4	%)
Dollar retention		90	%		90	%		—			—
Enrichment		95	%		99	%		(4	)		(4	%)
Number of clients		2,442			2,524			(82	)		(3	%)

Deferred revenue and agreement value remained essentially flat at March 31, 2013 as compared to March 31, 2012, which continues a trend from 2012 of declining year-over-year growth due to the downward trend in the growth in overall contract bookings during this period. Enrichment at 95% for the period ending March 31, 2013 is consistent with the period ending December 31, 2012, however it represents a 4% decrease from the prior year. As the enrichment rate includes a 12-month period, the decline in the rate as of March 31, 2013 compared to the prior year reflects the challenges associated with the implementation of the sales reorganization in January 2012 as well as high sales employee attrition during 2012. Client retention, dollar retention and number of clients at March 31, 2013 remained essentially flat with December 31, 2012 and the retention metrics remain near historical levels.

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Critical Accounting Policies and Estimates

Management’s discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our policies and estimates, including but not limited to, those related to our revenue recognition, stock-based compensation, non-marketable investments, goodwill and other intangible assets, income taxes, and valuation and impairment of marketable investments. Management bases its estimates on historical experience, data available at the time the estimates are made and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Our other critical accounting policies and estimates are described in our Annual Report on Form 10-K for the year ended December 31, 2012.

Results of Operations

The following table sets forth our statement of income as a percentage of total revenues for the periods indicated:

	Three Months Ended March 31,
	2013			2012
Revenues:
Research services		70.5	%		70.8	%
Advisory services and other		29.5			29.2
Total revenues		100.0			100.0
Operating expenses:
Cost of services and fulfillment		37.8			38.3
Selling and marketing		37.8			35.8
General and administrative		13.3			13.8
Depreciation		3.3			2.8
Amortization of intangible assets		0.8			0.9
Reorganization costs		2.2			1.9
Income from operations		4.8			6.5
Other income, net		0.5			0.6
Gains (losses) on investments, net		(0.1	)		0.1
Income before income taxes		5.2			7.2
Income tax provision		1.9			2.7
Net income		3.3	%		4.5	%

Three Months Ended March 31, 2013 and March 31, 2012

Revenues

	Three Months Ended March 31,						Absolute Increase (Decrease)			Percentage Increase (Decrease)
	2013			2012
	(dollars in millions)
Revenues	$	71.5		$	70.3		$	1.2			2	%
Revenues from research services	$	50.4		$	49.8		$	0.6			1	%
Revenues from advisory services and other	$	21.1		$	20.5		$	0.6			3	%
Revenues attributable to customers outside of the U.S.	$	19.1		$	20.1		$	(1.0	)		(5	%)
Percentage of revenue attributable to customers outside of the U.S.		27	%		29	%		(2	)		(7	%)
Number of clients (at end of period)		2,442			2,524			(82	)		(3	%)
Number of events		2			1			1			100	%

The 2% increase in total revenues during the three months ended March 31, 2013 compared to the prior year was driven by a 3% increase in advisory services and other revenue and a 1% increase in research services revenue. Foreign exchange fluctuations had an insignificant impact on revenue growth during the quarter. Revenues from customers outside of the U.S. in the 2013 quarter declined by 2% as a percentage of total revenues compared to the prior year due primarily to a decline in revenue from the European region. The general economic conditions in Europe as well as open positions in our European sales leadership team have contributed to a difficult selling environment in that region.

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Research services revenues are generally recognized as revenue ratably over the term of the contracts, which are generally twelve-month periods. Revenue growth in the first quarter of 2013 continues the downward trend in year-over-year growth rates experienced in the second half of 2012, reflecting a downward trend in the growth in overall contract bookings during this period.

Revenue from advisory services and other increased $0.6 million or 3% during the three months ended March 31, 2013 compared to the prior year primarily due to higher productivity during the current quarter from the research analysts delivering the revenue. Event revenue increased approximately $0.1 million during the current quarter compared to the prior year due to the addition of one small event in the Asia Pacific region during the current quarter.

Please refer to the “Segment Results” section below for a discussion of revenue and direct margin results by segment.

Cost of Services and Fulfillment

	Three Months Ended March 31,						Absolute Increase (Decrease)			Percentage Increase (Decrease)
	2013			2012
Cost of services and fulfillment (dollars in millions)	$	27.0		$	26.9		$	0.1			—
Cost of services and fulfillment as a percentage of total revenues		37.8	%		38.3	%		(0.5	)		(1	%)
Number of research and fulfillment employees (at end of period)		531			537			(6	)		(1	%)

The small increase in cost of services and fulfillment in dollars during the three months ended March 31, 2013 compared to the prior year period is primarily due to an increase in stock compensation expense resulting primarily from an increase in the amount of awards granted and an increase in facility costs due to new office space in the Asia Pacific region. These increases were partially offset by a decrease in professional services fees primarily related to a reduction in the cost and amount of surveys performed.

Selling and Marketing

	Three Months Ended March 31,						Absolute Increase (Decrease)		Percentage Increase (Decrease)
	2013			2012
Selling and marketing expenses (dollars in millions)	$	27.1		$	25.1		$	2.0		8	%
Selling and marketing expenses as a percentage of total revenues		37.8	%		35.8	%		2.0		6	%
Selling and marketing employees (at end of period)		523			491			32		7	%

The increase in selling and marketing expenses during the three months ended March 31, 2013 compared to the prior year period is primarily due to an increase in compensation costs resulting from an increase in sales and marketing employees, an increase in stock compensation costs and increased facility costs. Subject to the business environment, we intend to expand our sales force by approximately 10% in 2013 as compared to 2012. Increased sales of our research services are generally recognized over a twelve-month period, which typically results in an increase in selling and marketing expense as a percentage of revenues during periods of sales force expansion.

General and Administrative

	Three Months Ended March 31,						Absolute Increase (Decrease)			Percentage Increase (Decrease)
	2013			2012
General and administrative expenses (dollars in millions)	$	9.5		$	9.6		$	(0.1	)		(1	%)
General and administrative expenses as a percentage of total revenues		13.3	%		13.8	%		(0.5	)		(4	%)
General and administrative employees (at end of period)		168			176			(8	)		(5	%)

The decrease in general and administrative expenses during the three months ended March 31, 2013 compared to the prior year period is primarily due to a decrease in professional service fees for information technology projects, partially offset by an increase in stock compensation costs and increased facility costs.

Depreciation

Depreciation expense increased approximately $0.4 million during the three months ended March 31, 2013 compared to the prior year primarily resulting from the initiation of depreciation for our new website in March 2012.

Amortization of Intangible Assets

Amortization expense remained essentially consistent during the three months ended March 31, 2013 compared to the prior year.

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Reorganization Costs

During the three months ended March 31, 2013 we incurred $1.6 million of severance and related costs for the elimination of 31 jobs or approximately 2.5% of our workforce worldwide to streamline our operations. We anticipate incurring an additional $0.3 million of severance and related costs in the second quarter of 2013 related to this reduction. The accrual at March 31, 2013 and any additional costs in the second quarter are expected to be paid by the end of 2013.

During the three months ended March 31, 2012 we realigned our sales force to simplify the selling process to our customers. We incurred $1.3 million of severance and related costs in the first quarter of 2012 for the termination of 17 additional employees related to the sales reorganization and other cost reduction initiatives. In addition, we incurred an additional $0.1 million of severance and related costs in the second quarter of 2012 related to these initiatives.

Other Income, Net

Other income, net remained essentially consistent during the three months ended March 31, 2013 compared to the prior year.

Gains (Losses) on Investments, Net

Gains (losses) on investments, net were insignificant during the three months ended March 31, 2013 and 2012.

Provision for Income Taxes

	Three Months Ended March 31,						Absolute Increase (Decrease)			Percentage Increase (Decrease)
	2013			2012
Provision for income taxes (dollars in millions)	$	1.4		$	1.9		$	(0.5	)		(27	%)
Effective tax rate		37.5	%		37.6	%		(0.1	)		—

The effective tax rate has remained relatively consistent during the three months ended March 31, 2013 as compared to the prior year period.

Segment Results

We are organized into two client groups with each client group responsible for writing relevant research for the roles within the client organization on a worldwide basis. The two client groups, which are considered operating segments, are: Business Technology (“BT”) and Marketing and Strategy (“M&S”). In addition, our Events segment supports both client groups. Each client group generates revenues through sales of research, advisory and other service offerings targeted at specific roles within their targeted clients. Each client group consists of research personnel focused primarily on issues relevant to particular roles and to the day-to-day responsibilities of persons within the roles. Amounts included in the Events segment relate to the operations of the events production department. Revenue reported in the Events segment consists primarily of sponsorships and event tickets to Forrester events.

We evaluate reportable segment performance and allocate resources based on direct margin. Direct margin, as presented below, is defined as operating income excluding sales expenses, certain marketing and fulfillment expenses, stock-based compensation expense, general and administrative expenses, depreciation expense, amortization of intangible assets and reorganization costs. In the first quarter of 2013, we modified segment direct margin for each of the BT and M&S clients groups to reflect the transfer of revenue and direct costs related to one product line from BT to M&S and to reallocate certain shared consulting costs between BT and M&S. Accordingly, the 2012 amounts have been reclassified to conform to the current presentation. The accounting policies used by the segments are the same as those used in the consolidated financial statements.

	BT			M&S			Events			Consolidated
Three Months Ended March 31, 2013
Revenue (in thousands)	$	38,875		$	31,782		$	842		$	71,499
Direct margin	$	27,031		$	21,318		$	(263	)	$	48,086
Year over year revenue growth		1	%		2	%		12	%		2	%
Direct margin percentage		69.5	%		67.1	%		-31.2	%		67.3	%

	BT			M&S			Events			Consolidated
Three Months Ended March 31, 2012
Revenue (in thousands)	$	38,325		$	31,180		$	755		$	70,260
Direct margin	$	26,207		$	20,680		$	(293	)	$	46,594
Direct margin percentage		68.4	%		66.3	%		-38.8	%		66.3	%

BT revenue increased 1% during the three months ended March 31, 2013 compared to the prior year due to a 3% increase in research services revenue partially offset by a 2% decrease in advisory services and other revenue. The increase in direct margin percentage during the three months ended March 31, 2013 compared to the prior year is due to a decrease in direct costs during the three months ended March 31, 2013 primarily resulting from a decrease in professional services related to a reduction in the cost and amount of surveys performed.

M&S revenue increased 2% during the three months ended March 31, 2013 compared to the prior year due to an 8% increase in advisory services and other revenue partially offset by a 1% decrease in research services revenue. The increase in direct margin percentage during the three months ended March 31, 2013 compared to the prior year is due to direct costs remaining flat during the three months ended March 31, 2013 compared to the prior year primarily resulting from a decrease in professional services related to a reduction in the cost and amount of surveys performed.

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Events revenue and margin are insignificant during the three months ended March 31, 2013 and 2012 as only two events, including a small event in the Asia Pacific region, were held during the three months ended March 31, 2013 and only one event was held during the three months ended March 31, 2012. We typically hold the majority of our events during the second and fourth quarters of the year.

Liquidity and Capital Resources

We have historically financed our operations primarily through funds generated from operations. Memberships for research services, which constituted approximately 70% of our revenues during the three months ended March 31, 2013, are annually renewable and are generally payable in advance. We generated cash from operating activities of $35.5 million and $34.9 million during the three months ended March 31, 2013 and 2012, respectively. The $0.6 million increase in cash provided from operations for the three months ended March 31, 2013 is primarily attributable to a decrease in cash paid for income taxes due to the timing of estimated payments in the current year, which was partially offset by lower collections of accounts receivable during the 2013 period due to a lower amount of accounts receivable outstanding at the end of 2012 compared to the prior year. For the three months ended March 31, 2013, we generated $25.2 million of cash from collections of accounts receivable. In the first quarter of the year, we traditionally generate a significant amount of cash from the collection of accounts receivable as a large portion of our business is contracted for and billed in the fourth quarter of the year.

During the three months ended March 31, 2013, we generated $12.8 million of cash from investing activities, consisting primarily of $13.6 million in net maturities of marketable investments partially offset by $0.9 million of purchases of property and equipment. Property and equipment purchases during the 2013 period consisted primarily of software and leasehold improvements. We expect property and equipment purchases to be in the range of $3.0 million to $6.0 million in 2013. During the three months ended March 31, 2012, we used $7.7 million of cash from investing activities, consisting primarily of $6.2 million in net purchases of marketable investments and $2.4 million of purchases of property and equipment. Property and equipment purchases during the 2012 period consisted primarily of software and leasehold improvements. We regularly invest excess funds in short and intermediate-term interest-bearing obligations of investment grade.

We used $1.8 million of cash from financing activities during the three months ended March 31, 2013 resulting from a $3.4 million dividend payment, partially offset by $1.4 million of proceeds from exercises of stock options. We did not repurchase any of our common stock during the three months ended March 31, 2013. We used $8.9 million of cash from financing activities during the three months ended March 31, 2012 resulting from $7.7 million of purchases of our common stock and a $3.2 million dividend payment, partially offset by $2.0 million of proceeds from exercises of stock options.

On April 3, 2013 we commenced a “modified Dutch auction” self-tender offer to repurchase up to $130 million of our common stock at a price per share within the range of $32.00 to $36.00. A “modified Dutch auction” self-tender offer allows stockholders to indicate how many shares and at what price within the company’s specified range (in increments of $0.25 per share) they wish to tender. When the tender offer expired, based upon the number of shares tendered and the prices specified by the tendering stockholders, we determined the purchase price, which was the lowest price per share within the range that enabled us to purchase up to $130 million of our common stock. The tender offer expired on May 1, 2013 and we purchased 2,054,732 shares of our common stock on May 7, 2013 at a purchase price per of $36.00 per share for an aggregate price of $74.0 million, excluding expenses related to the tender offer. We funded the repurchase from cash and marketable securities on hand. At March 31, 2013, we had $149.2 million remaining on our stock repurchase authorization and after the tender offer we have approximately $75.2 million remaining on the authorization. We plan to continue to repurchase our common stock during the remainder of 2013, as market conditions warrant.

As of March 31, 2013, we held approximately $8.9 million ($11.0 million par value) of state and municipal bonds with an auction reset feature (auction rate securities or “ARS”). In February 2008, auctions began to fail for these securities and have continued to fail. As a result, our ability to liquidate our investment and fully recover the carrying value of our investment in the near term may be limited or not exist. Based on our expected operating cash flows and our cash resources, we do not anticipate the current lack of liquidity of our ARS investments will affect our ability to execute our current business plan.

As of March 31, 2013, we had cash and cash equivalents of $143.9 million and marketable investments of $129.5 million. We do not have a line of credit and do not presently anticipate the need to access a line of credit in the foreseeable future. We believe that our current cash balance, marketable investments, and cash flows from operations will satisfy working capital, financing activities (including the tender offer discussed above), and capital expenditure requirements for at least the next two years.

Contractual Obligations

There have been no material changes to the contractual obligations table as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2012.

Off-Balance Sheet Arrangements

We do not maintain any off-balance sheet financing arrangements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in our assessment of our sensitivity to market risk since our presentation set forth in Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” in our Annual Report on Form 10-K for the year ended December 31, 2012.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as such term is defined under Securities Exchange Act Rule 13a-15(e), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures. In designing and evaluating the disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As of December 31, 2012, we reported that management had identified a material weakness in the Company’s internal control over financial reporting related to

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revenue for advisory services and consulting projects. Specifically, we did not design and operate effective controls to evidence that our advisory services and consulting projects were monitored for services performed in support of the revenue recognized. Although the deficiency did not result in the identification of a material misstatement during 2012, this deficiency could have resulted in a misstatement of the Company’s annual or interim consolidated financial statements that would have been material and would not have been prevented or detected. Management concluded that as a result of such material weakness, our internal control over financial reporting was not effective as of December 31, 2012.

Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2013. As part of our evaluation, we considered whether the control deficiencies related to the above described material weakness in our internal control over financial reporting continued to exist. Although we have commenced implementation of the remediation plan described below, and have made progress in that regard, our management has concluded that the control deficiencies relating to the material weakness had not been remediated as of March 31, 2013. Based upon their evaluation and subject to the foregoing, the principal executive officer and principal financial officer concluded that, because of the material weakness described above, our disclosure controls and procedures were not effective as of March 31, 2013. Notwithstanding such material weakness, management believes that the unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented in conformity with accounting principles generally accepted in the United States.

Remediation Plan

We are in the process of remediating the above described material weakness. These remedial efforts as outlined below are intended to address the identified material weakness and to enhance our overall control environment. Management believes these efforts will effectively remediate the material weakness.

1. Consulting Project Scoping: During the scoping phase of each project, we will ensure that evidence is maintained of the review and approval of the allocation of the project revenue to the services to be delivered to the client.

2. Advisory Services and Consulting Project Performance: Our project managers will more closely monitor the performance of each advisory service and consulting project and will maintain evidence of their review and approval of the services performed.

3. Training: We will ensure that we conduct proper training so that the remedial actions identified above are understood and followed by applicable personnel.

Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended March 31, 2013 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this Form 10-Q, you should carefully consider the factors discussed in Part I, “Item 1A: Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2012, which could materially affect our business, financial condition or future results. The risk factors described in our Annual Report on Form 10-K remain applicable to our business. The risks described in our Annual Report on Form 10-K are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

18

ITEM 6. EXHIBITS

10.1	Amended and Restated Executive Cash Incentive Plan (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K previously filed on March 19, 2013, file No. 000-21433, and incorporated herein by reference)
31.1	Certification of the Principal Executive Officer. (filed herewith)
31.2	Certification of the Principal Financial Officer. (filed herewith)
32.1	Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (furnished herewith)
32.2	Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (furnished herewith)
101.INS*	XBRL Instance Document. (furnished herewith)
101.SCH*	XBRL Taxonomy Extension Schema. (furnished herewith)
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase. (furnished herewith)
101.DEF*	XBRL Taxonomy Extension Definition Linkbase. (furnished herewith)
101.LAB*	XBRL Taxonomy Extension Label Linkbase. (furnished herewith)
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase. (furnished herewith)

* Pursuant to Rule 406T of Regulation S-T, these interactive date files shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.

19

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	FORRESTER RESEARCH, INC.
	By:	/s/ Michael A. Doyle
		Michael A. Doyle
		Chief Financial Officer and Treasurer (Principal financial officer)
Date: May 10, 2013

20

Exhibit Index

Exhibit No.	Document
10.1	Amended and Restated Executive Cash Incentive Plan (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K previously filed on March 19, 2013, file No. 000-21433, and incorporated herein by reference)
31.1	Certification of the Principal Executive Officer. (filed herewith)
31.2	Certification of the Principal Financial Officer. (filed herewith)
32.1	Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (furnished herewith)
32.2	Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (furnished herewith)
101.INS*	XBRL Instance Document. (furnished herewith)
101.SCH*	XBRL Taxonomy Extension Schema. (furnished herewith)
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase. (furnished herewith)
101.DEF*	XBRL Taxonomy Extension Definition Linkbase. (furnished herewith)
101.LAB*	XBRL Taxonomy Extension Label Linkbase. (furnished herewith)
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase. (furnished herewith)

* Pursuant to Rule 406T of Regulation S-T, these interactive date files shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.

EX-31.1

Exhibit 31.1

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER

I, George F. Colony, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Forrester Research, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ GEORGE F. COLONY

George F. Colony

Chairman of the Board and Chief Executive Officer

(Principal executive officer)

Date: May 10, 2013

EX-31.2

Exhibit 31.2

CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER

I, Michael A. Doyle, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Forrester Research, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ MICHAEL A. DOYLE

Michael A. Doyle

Chief Financial Officer and Treasurer

(Principal financial officer)

Date: May 10, 2013

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

SECTION 1350, CHAPTER 63 OF TITLE 18, UNITED STATES CODE,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned, as Chief Executive Officer of Forrester Research, Inc. (the “Company”), does hereby certify that to the undersigned’s knowledge:

1) the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, as filed with the Securities and Exchange Commission (the “10-Q Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2) the information contained in the 10-Q Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ George F. Colony

George F. Colony

Chairman of the Board and

Chief Executive Officer

Dated: May 10, 2013

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

SECTION 1350, CHAPTER 63 OF TITLE 18, UNITED STATES CODE,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned, as Chief Financial Officer of Forrester Research, Inc. (the “Company”), does hereby certify that to the undersigned’s knowledge:

1) the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, as filed with the Securities and Exchange Commission (the “10-Q Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2) the information contained in the 10-Q Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ MICHAEL A. DOYLE

Michael A. Doyle

Chief Financial Officer and Treasurer

Dated: May 10, 2013

XML

Operating Segments (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Summary of reportable segments
Revenue	$ 71,499	$ 70,260
Direct margin	48,086	46,594
Selling, marketing, administrative and other expenses	(42,518)	(40,009)
Amortization of intangible assets	(559)	(614)
Reorganization costs	(1,591)	(1,343)
Other income and gains/losses on investments	325	468
Income before income taxes	3,743	5,096
BT [Member]
Summary of reportable segments
Revenue	38,875	38,325
Direct margin	27,031	26,207
M&S [Member]
Summary of reportable segments
Revenue	31,782	31,180
Direct margin	21,318	20,680
Events [Member]
Summary of reportable segments
Revenue	842	755
Direct margin	$ (263)	$ (293)

XML

Net Income Per Common Share (Details) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Summary of basic and diluted weighted average common shares
Basic weighted average common shares outstanding	22,306	22,738
Weighted average common equivalent shares	352	435
Diluted weighted average common shares outstanding	22,658	23,173
Options excluded from diluted weight average share calculation as effect would have been anti-dilutive	1,198	406

XML

Marketable Investments (Details 1) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Summary of available for sale securities at their contractual maturity date
FY 2013, Total	$ 39,559
FY 2014, Total	58,116
FY 2015, Total	22,933
Thereafter, Total	8,926
Total short and long term	129,534	143,846
State and municipal obligations [Member]
Summary of available for sale securities at their contractual maturity date
FY 2013, Total	6,366
FY 2014, Total	10,224
FY 2015, Total	2,115
Total short and long term	18,705	18,872
Federal agency and corporate obligations [Member]
Summary of available for sale securities at their contractual maturity date
FY 2013, Total	33,193
FY 2014, Total	47,892
FY 2015, Total	20,818
Total short and long term	101,903	116,004
ARS [Member]
Summary of available for sale securities at their contractual maturity date
Thereafter, Total	8,926
Total short and long term	$ 8,926

XML

Subsequent Events (Details) (USD $) In Millions, except Share data, unless otherwise specified	1 Months Ended	3 Months Ended	1 Months Ended		3 Months Ended	1 Months Ended
	Feb. 28, 2013	Mar. 31, 2013	May 07, 2013 Subsequent Event [Member]	Apr. 30, 2013 Subsequent Event [Member]	Mar. 31, 2013 Subsequent Event [Member]	Apr. 30, 2013 Subsequent Event [Member] Maximum [Member]	Apr. 30, 2013 Subsequent Event [Member] Minimum [Member]
Subsequent Events (Textual) [Abstract]
Repurchase of common stock	$ 50.0	$ 360.0		$ 130.0
Common stock repurchase price						$ 36.00	$ 32.00
Increments per share				$ 0.25
Tender offer expiry date					May 01, 2013
Common stock purchase			2,054,732
Stock repurchased during period per share amount			$ 36.00
Stock repurchased during period value			$ 74.0

XML

Stockholders Equity (Details 3) (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Equity Incentive Plans [Member]
Valuation of options granted under the equity incentive plans and shares subject to purchase under the employee stock purchase plan
Average risk-free interest rate	0.81%	0.84%
Expected dividend yield	2.10%	1.70%
Expected life	4 years 6 months	4 years 6 months
Expected volatility	40.00%	40.00%
Weighted average fair value	$ 7.72	$ 10.05
Employee Stock Purchase Plan [Member]
Valuation of options granted under the equity incentive plans and shares subject to purchase under the employee stock purchase plan
Average risk-free interest rate	0.11%	0.14%
Expected dividend yield	2.10%	1.70%
Expected life	6 months	6 months
Expected volatility	25.00%	31.00%
Weighted average fair value	$ 5.97	$ 7.54

XML

Marketable Investments

3 Months Ended

Mar. 31, 2013

Marketable Investments [Abstract]

Marketable Investments

Note 2 — Marketable Investments

The following table summarizes the Company’s marketable investments (in thousands):

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Market Value
March 31, 2013
Available-for-sale securities
State and municipal obligations	$	18,669	$	36	$	—		$	18,705
Federal agency and corporate obligations		101,580		338		(15	)		101,903
Total short-term available-for-sale securities		120,249		374		(15	)		120,608
ARS, long-term		11,000		—		(2,074	)		8,926
Total available-for-sale securities	$	131,249	$	374	$	(2,089	)	$	129,534

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Market Value
December 31, 2012
Available-for-sale securities
State and municipal obligations	$	18,859	$	27	$	(14	)	$	18,872
Federal agency and corporate obligations		115,653		380		(29	)		116,004
Total short-term available-for-sale securities		134,512		407		(43	)		134,876
ARS, long-term		11,000		—		(2,030	)		8,970
Total available-for-sale securities	$	145,512	$	407	$	(2,073	)	$	143,846

Realized gains and losses on securities are included in earnings and are determined using the specific identification method. Realized gains or losses on the sale of the Company’s federal agency, state, municipal and corporate obligations were not material in the three months ended March 31, 2013 or 2012.

The following table summarizes the maturity periods of the marketable securities in the Company’s portfolio as of March 31, 2013. In February 2008, certain auction rate securities (“ARS”) that Forrester held experienced failed auctions that limited the liquidity of these securities. These auction failures have continued and based on current market conditions, it is likely that auction failures will continue. The following table reflects the ARS at their contractual maturity dates of between 2024 and 2034 (in thousands).

	FY 2013		FY2014		FY2015		Thereafter		Total
State and municipal obligations	$	6,366	$	10,224	$	2,115	$	—	$	18,705
Federal agency and corporate obligations		33,193		47,892		20,818		—		101,903
ARS		—		—		—		8,926		8,926
Total	$	39,559	$	58,116	$	22,933	$	8,926	$	129,534

The following table shows the gross unrealized losses and market value of Forrester’s available-for-sale securities with unrealized losses that are not deemed to be other-than-temporary, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position (in thousands):

	As of March 31, 2013
	Less Than 12 Months				12 Months or Greater
	Market Value		Unrealized Losses		Market Value		Unrealized Losses
State and municipal bonds	$	—	$	—	$	—	$	—
Federal agency and corporate obligations		8,976		15		—		—
ARS		—		—		8,926		2,074
Total	$	8,976	$	15	$	8,926	$	2,074

	As of December 31, 2012
	Less Than 12 Months				12 Months or Greater
	Market Value		Unrealized Losses		Market Value		Unrealized Losses
State and municipal bonds	$	9,430	$	14	$	—	$	—
Federal agency and corporate obligations		17,716		29		—		—
ARS		—		—		8,970		2,030
Total	$	27,146	$	43	$	8,970	$	2,030

Fair Value

The Company measures certain financial assets at fair value on a recurring basis, including cash equivalents, available-for-sale securities and trading securities. The fair values of these financial assets have been classified as Level 1, 2 or 3 within the fair value hierarchy as described in the accounting standards for fair value measurements.

Level 1 - Fair value based on quoted prices in active markets for identical assets or liabilities.

Level 2 - Fair value based on inputs other than Level 1 inputs that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Fair value based on unobservable inputs that are supported by little or no market activity and such inputs are significant to the fair value of the assets or liabilities.

The following table represents the Company’s fair value hierarchy for its financial assets (cash equivalents and investments) measured at fair value on a recurring basis as of March 31, 2013 and December 31, 2012 (in thousands):

	As of March 31, 2013
	Level 1		Level 2		Level 3		Total
Money market funds (1)	$	15,314	$	—	$	—	$	15,314
State and municipal obligations		—		18,705		—		18,705
Federal agency and corporate obligations (2)		—		151,903		—		151,903
ARS		—		—		8,926		8,926
Total	$	15,314	$	170,608	$	8,926	$	194,848

	As of December 31, 2012
	Level 1		Level 2		Level 3		Total
Money market funds (1)	$	815	$	—	$	—	$	815
State and municipal obligations		—		18,872		—		18,872
Federal agency and corporate obligations (2)		—		148,117		—		148,117
ARS		—		—		8,970		8,970
Total	$	815	$	166,989	$	8,970	$	176,774

(1) Included in cash and cash equivalents.

(2) $50.0 million and $32.1 million included in cash and cash equivalents at March 31, 2013 and December 31, 2012, respectively, as original maturities at the time of purchase were 90 days or less.

Level 2 assets consist of the Company’s entire portfolio of federal, state, municipal and corporate bonds, excluding those municipal bonds described below with an auction reset feature. Level 2 assets have been initially valued at the transaction price and subsequently valued, at the end of each reporting period, typically utilizing third party pricing services or other market observable data. The pricing services utilize industry standard valuation methods, including both income and market based approaches and observable market inputs to determine value. These observable market inputs include reportable trades, benchmark yields, credit spreads, broker/dealer quotes, bids, offers, current spot rates and other industry and economic events.

Level 3 assets at March 31, 2013 and December 31, 2012 consist entirely of municipal bonds with an auction reset feature (ARS). Prior to 2008, the fair value of the ARS investments approximated par value due to the frequent resets through the auction process. While the Company continues to receive interest income on its ARS investments at each interest reset date (which occurs at either seven or 35 day intervals for each security), these investments trade infrequently and therefore do not have a readily determinable market value. Interest rates on the securities ranged from 0.1% to 0.4% and 0.1% to 0.4% during the three months ended March 31, 2013 and 2012, respectively. The Company values the ARS using a discounted cash flow model that includes unobservable inputs including estimates of interest rates, discount rates and expected holding periods of the securities, which is considered a Level 3 valuation. Unobservable inputs included in the valuation as of March 31, 2013 include a weighted average interest rate of 1.1%, a weighted average discount rate of 4.3%, and a weighted average holding period of 8.7 years. The valuation resulted in an unrealized loss recorded in other comprehensive income (loss) in the Consolidated Balance Sheets of $2.1 million at March 31, 2013 and $2.0 million at December 31, 2012. The Company believes that the loss is temporary due to the strong underlying credit rating of the securities and the fact that the Company does not intend to sell the securities and is not likely to be required to sell the securities. The assumptions used in valuing the ARS are volatile and subject to change as the underlying sources of these assumptions and market conditions change. Significant increases or decreases in any of the valuation assumptions in isolation would result in a significant change in the fair value.

The following table provides a summary of changes in fair value of the Company’s Level 3 financial assets for the three months ended March 31, 2013 and 2012 (in thousands):

	ARS
Balance at December 31, 2012	$	8,970
Sales		—
Total gains (losses):
Included in other comprehensive income (loss)		(44	)
Balance at March 31, 2013	$	8,926

	ARS
Balance at December 31, 2011	$	9,565
Sales		—
Total gains (losses):
Included in other comprehensive income (loss)		16
Balance at March 31, 2012	$	9,581

XML

Marketable Investments (Details Textual) (USD $) In Millions, unless otherwise specified	3 Months Ended									3 Months Ended
	Mar. 31, 2013	Mar. 31, 2013 Minimum [Member]	Mar. 31, 2012 Minimum [Member]	Mar. 31, 2013 Maximum [Member]	Mar. 31, 2012 Maximum [Member]	Mar. 31, 2013 Accumulated Net Unrealized Investment Gain (Loss) [Member]	Dec. 31, 2012 Accumulated Net Unrealized Investment Gain (Loss) [Member]	Mar. 31, 2013 Federal agency and corporate obligations [Member]	Dec. 31, 2012 Federal agency and corporate obligations [Member]	Mar. 31, 2013 ARS [Member] Level 3 [Member]
Marketable Investments (Textual) [Abstract]
Cash and cash equivalents								$ 50.0	$ 32.1
Intervals for each security		7 days		35 days
Interest rates on securities ranged		0.10%	0.10%	0.40%	0.40%
Weighted average interest rate										1.10%
Weighted average discount rate										4.30%
Weighted average holding period										8 years 8 months 12 days
Unrealized loss recorded in accumulated other comprehensive income (loss)						$ 2.1	$ 2.0
Marketable Investments (Additional Textual) [Abstract]
Original maturities	90 days

XML

Marketable Investments (Details 4) (ARS [Member], Level 3 [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
ARS [Member] | Level 3 [Member]
Summary of changes in fair value of Level 3 financial assets
Fair value of assets, Beginning Balance	$ 8,970	$ 9,565
Sales
Total gains (losses) included in other comprehensive income (loss)	(44)	16
Fair value of assets, Ending Balance	$ 8,926	$ 9,581

XML

Non-Marketable Investments (Details) (USD $) In Millions, unless otherwise specified						3 Months Ended
	Mar. 31, 2013	Dec. 31, 2012	Mar. 31, 2013 Minimum [Member]	Mar. 31, 2013 Technology Related Private Equity Funds [Member]	Dec. 31, 2012 Technology Related Private Equity Funds [Member]	Mar. 31, 2013 Non Marketable Investments [Member]	Mar. 31, 2012 Non Marketable Investments [Member]
Non-Marketable Investments (Textual) [Abstract]
Carrying value of the Company's non-marketable investments				$ 6.8	$ 6.9
Ownership interest of company			5.00%
Gain (losses) from non-marketable investments						(0.1)	0.1
Non-Marketable Investments (Additional Textual) [Abstract]
Book value of investment	$ 1.1	$ 1.2

XML

Reorganization (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Summary of roll forward of the activity in the reorganization accrual
Additions	$ 1,591	$ 1,343
Workforce Reduction [Member]
Summary of roll forward of the activity in the reorganization accrual
Accrual Beginning Balance	14
Additions	1,591
Cash payments	(459)
Accrual Ending Balance	$ 1,146

XML

Interim Consolidated Financial Statements

3 Months Ended

Mar. 31, 2013

Interim Consolidated Financial Statements [Abstract]

Interim Consolidated Financial Statements

Note 1 — Interim Consolidated Financial Statements

Basis of Presentation

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for reporting on Form 10-Q. Accordingly, certain information and footnote disclosures required for complete financial statements are not included herein. The year-end balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. It is recommended that these financial statements be read in conjunction with the consolidated financial statements and related notes that appear in the Forrester Research, Inc. (“Forrester”) Annual Report on Form 10-K for the year ended December 31, 2012. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the financial position, results of operations, and cash flows as of the dates and for the periods presented have been included. The results of operations for the three months ended March 31, 2013 may not be indicative of the results for the year ending December 31, 2013, or any other period.

Fair Value Measurements

The carrying amounts reflected in the Consolidated Balance Sheets for cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate fair value due to their short-term maturities. See Note 2 – Marketable Investments for the fair value of the Company’s marketable investments.

XML

Reorganization (Details Textual) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013 Job	Jun. 30, 2013 Forecast [Member]
Reorganization (Textual) [Abstract]
Severance and related costs	$ 1.6	$ 0.3
Reorganization (Additional Textual) [Abstract]
Number of jobs eliminated worldwide	31
Number of jobs eliminated worldwide, percentage	2.50%

XML

Operating Segments (Details Textual)	3 Months Ended
	Mar. 31, 2013 Segment
Operating Segments (Textual) [Abstract]
Number of Operating Segments	2

XML

Consolidated Balance Sheets (Unaudited) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Current Assets:
Cash and cash equivalents	$ 143,944	$ 98,810
Marketable investments (Note 2)	120,608	134,876
Accounts receivable, net	49,160	74,623
Deferred commissions	9,616	9,410
Prepaid expenses and other current assets	18,036	18,846
Total current assets	341,364	336,565
Long-term marketable investments (Note 2)	8,926	8,970
Property and equipment, net	44,554	46,300
Goodwill	78,152	78,954
Intangible assets, net	7,291	7,920
Other assets	9,815	9,123
Total assets	490,102	487,832
Current Liabilities:
Accounts payable	922	772
Accrued expenses and other current liabilities	29,586	30,078
Deferred revenue	152,188	150,479
Total current liabilities	182,696	181,329
Non-current liabilities	9,318	9,433
Total liabilities	192,014	190,762
Commitments
Stockholders' Equity (Note 6):
Preferred stock, $.01 par value, Authorized - 500 shares, issued and outstanding - none
Common stock, $.01 par value, Authorized - 125,000 shares, Issued - 31,522 and 31,451 as of March 31, 2013 and December 31, 2012, respectively; Outstanding - 22,364 and 22,293 as of March 31, 2013 and December 31, 2012, respectively	315	315
Additional paid-in capital	392,790	389,362
Retained earnings	116,639	117,648
Treasury stock - 9,158 as of March 31, 2013 and December 31, 2012, at cost	(210,843)	(210,843)
Accumulated other comprehensive income (loss)	(813)	588
Total stockholders' equity	298,088	297,070
Total liabilities and stockholders' equity	$ 490,102	$ 487,832

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Consolidated Statements of Comprehensive Income (Parenthetical) (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Consolidated Statements of Comprehensive Income [Abstract]
Taxes (benefits) on unrealized gain	$ (3)	$ 140
Taxes on reclassification adjustment	$ 0	$ 8

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Stockholders' Equity (Details 1) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013
Details of restricted stock unit activity
Number of Shares, Unvested at December 31, 2012	301
Number of Shares, Granted	7
Number of Shares, Vested or settled
Number of Shares, Forfeited	(44)
Number of Shares, Unvested at March 31, 2013	264
Weighted Average Grant Date Fair Value, Unvested, Beginning Balance	$ 32.98
Weighted Average Grant Date Fair Value, Granted	$ 27.55
Weighted Average Grant Date Fair Value, Vested or settled
Weighted Average Grant Date Fair Value, Forfeited	$ 30.30
Weighted Average Grant Date Fair Value , Unvested, Ending Balance	$ 33.29

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Stockholders' Equity (Tables)

3 Months Ended

Mar. 31, 2013

Stockholders' Equity [Abstract]

Summary of Stock option activity

	Number of Shares			Weighted - Average Exercise Price Per Share		Weighted - Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding at December 31, 2012		1,936		$	29.03
Granted		62			27.68
Exercised		(45	)		18.61
Forfeited		(32	)		30.75
Outstanding at March 31, 2013		1,921		$	29.20		6.35	$	6,332
Exercisable at March 31, 2013		1,071		$	26.88		4.69	$	5,346

Details of restricted stock unit activity

	Number of Shares			Weighted - Average Grant Date Fair Value
Unvested at December 31, 2012		301		$	32.98
Granted		7			27.55
Vested or settled		—			—
Forfeited		(44	)		30.30
Unvested at March 31, 2013		264		$	33.29

Summary of stock-based compensation recorded in expense categories

	Three Months Ended March 31,
	2013		2012
Cost of services and fulfillment	$	904	$	653
Selling and marketing		422		224
General and administrative		534		446
Total	$	1,860	$	1,323

Valuation of options granted under the equity incentive plans and shares subject to purchase under the employee stock purchase plan

	Three Months Ended March 31, 2013						Three Months Ended March 31, 2012
	Equity Incentive Plans			Employee Stock Purchase Plan			Equity Incentive Plans			Employee Stock Purchase Plan
Average risk-free interest rate		0.81	%		0.11	%		0.84	%		0.14	%
Expected dividend yield		2.1	%		2.1	%		1.7	%		1.7	%
Expected life		4.5 Years			0.5 Years			4.5 Years			0.5 Years
Expected volatility		40	%		25	%		40	%		31	%
Weighted average fair value	$	7.72		$	5.97		$	10.05		$	7.54

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Stockholders' Equity (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Summary of stock-based compensation recorded in expense categories
Total allocated share-based compensation expense	$ 1,860	$ 1,323
Cost of services and fulfillment [Member]
Summary of stock-based compensation recorded in expense categories
Total allocated share-based compensation expense	904	653
Selling and marketing [Member]
Summary of stock-based compensation recorded in expense categories
Total allocated share-based compensation expense	422	224
General and administrative [Member]
Summary of stock-based compensation recorded in expense categories
Total allocated share-based compensation expense	$ 534	$ 446

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Marketable Investments (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Available-for-sale securities
Amortized Cost	$ 131,249	$ 145,512
Gross Unrealized Gains	374	407
Gross Unrealized Losses	(2,089)	(2,073)
Total short and long term	129,534	143,846
State and municipal obligations [Member]
Available-for-sale securities
Amortized Cost	18,669	18,859
Gross Unrealized Gains	36	27
Gross Unrealized Losses		(14)
Total short and long term	18,705	18,872
Federal agency and corporate obligations [Member]
Available-for-sale securities
Amortized Cost	101,580	115,653
Gross Unrealized Gains	338	380
Gross Unrealized Losses	(15)	(29)
Total short and long term	101,903	116,004
Total short-term available-for-sale securities [Member]
Available-for-sale securities
Amortized Cost	120,249	134,512
Gross Unrealized Gains	374	407
Gross Unrealized Losses	(15)	(43)
Total short and long term	120,608	134,876
ARS, long-term [Member]
Available-for-sale securities
Amortized Cost	11,000	11,000
Gross Unrealized Gains
Gross Unrealized Losses	(2,074)	(2,030)
Total short and long term	$ 8,926	$ 8,970

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Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Cash flows from operating activities:
Net income	$ 2,341	$ 3,181
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	2,360	1,993
Amortization of intangible assets	559	614
Net (gains) losses from investments	51	(59)
Deferred income taxes	(1,519)	(549)
Stock-based compensation	1,860	1,323
Amortization of premium on investments	636	759
Foreign currency gains	(72)	(8)
Changes in assets and liabilities, net of acquisitions
Accounts receivable	25,186	29,518
Deferred commissions	(206)	1,743
Prepaid expenses and other current assets	1,271	(5,317)
Accounts payable	111	(544)
Accrued expenses and other liabilities	166	(669)
Deferred revenue	2,709	2,901
Net cash provided by operating activities	35,453	34,886
Cash flows from investing activities:
Purchases of property and equipment	(939)	(2,418)
Purchases of marketable investments	(4,125)	(40,301)
Proceeds from sales and maturities of marketable investments	17,750	34,090
Change in restricted cash		946
Other investing activity	75	33
Net cash provided by (used in) investing activities	12,761	(7,650)
Cash flows from financing activities:
Dividends paid on common stock	(3,350)	(3,195)
Repurchases of common stock		(7,700)
Proceeds from issuance of common stock under employee equity incentive plans	1,447	1,997
Excess tax benefits from stock-based compensation	109	183
Payment of deferred acquisition consideration		(139)
Net cash used in financing activities	(1,794)	(8,854)
Effect of exchange rate changes on cash and cash equivalents	(1,286)	978
Net increase in cash and cash equivalents	45,134	19,360
Cash and cash equivalents, beginning of period	98,810	81,047
Cash and cash equivalents, end of period	$ 143,944	$ 100,407

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Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Consolidated Balance Sheets [Abstract]
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	500	500
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	125,000	125,000
Common stock, shares issued	31,522	31,451
Common stock, shares outstanding	22,364	22,293
Treasury stock, shares	9,158	9,158

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Subsequent Events

3 Months Ended

Mar. 31, 2013

Subsequent Events [Abstract]

Subsequent Events

Note 10 — Subsequent Events

On April 3, 2013 the Company commenced a “modified Dutch auction” self-tender offer to repurchase up to $130 million of its common stock at a price per share within the range of $32.00 to $36.00. A “modified Dutch auction” self-tender offer allows stockholders to indicate how many shares and at what price within the company’s specified range (in increments of $0.25 per share) they wish to tender. When the tender offer expired, based upon the number of shares tendered and the prices specified by the tendering stockholders, the Company determined the purchase price, which was the lowest price per share within the range that enabled the Company to purchase up to $130 million of its common stock. The tender offer expired on May 1, 2013 and the Company purchased 2,054,732 shares of its common stock on May 7, 2013 at a purchase price per of $36.00 per share for an aggregate price of $74.0 million, excluding expenses related to the tender offer.

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Document and Entity Information	3 Months Ended
	Mar. 31, 2013	May 07, 2013
Document and Entity Information [Abstract]
Entity Registrant Name	FORRESTER RESEARCH, INC.
Entity Central Index Key	0001023313
Document Type	10-Q
Document Period End Date	Mar. 31, 2013
Amendment Flag	false
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		20,528,000

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Recent Accounting Pronouncements (Policies)

3 Months Ended

Mar. 31, 2013

Recent Accounting Pronouncements [Abstract]

Intangibles - Goodwill and Other

In July 2012, the Financial Accounting Standards Board issued ASU No. 2012-02, Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment (ASU 2012-02). This newly issued accounting standard allows an entity the option to first assess qualitative factors to determine whether it is necessary to perform a quantitative impairment test for indefinite-lived intangibles other than goodwill. Under that option, an entity would no longer be required to calculate the fair value of an indefinite-lived intangible asset unless the entity determines, based on that qualitative assessment, that it is more likely than not that the fair value of the indefinite-lived intangible asset is less than its carrying amount. This ASU is effective for annual and interim indefinite-lived intangible asset impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted. As the Company does not have any indefinite-lived intangible assets as of March 31, 2013 other than goodwill, the adoption of this standard on January 1, 2013 did not have an impact on the Company’s consolidated results.

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Consolidated Statements of Income (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Revenues:
Research services	$ 50,378	$ 49,760
Advisory services and other	21,121	20,500
Total revenues	71,499	70,260
Operating expenses:
Cost of services and fulfillment	27,027	26,938
Selling and marketing	27,057	25,133
General and administrative	9,487	9,611
Depreciation	2,360	1,993
Amortization of intangible assets	559	614
Reorganization costs	1,591	1,343
Total operating expenses	68,081	65,632
Income from operations	3,418	4,628
Other income, net	376	409
Gains (losses) on investments, net	(51)	59
Income before income taxes	3,743	5,096
Income tax provision	1,402	1,915
Net income	$ 2,341	$ 3,181
Basic income per common share	$ 0.10	$ 0.14
Diluted income per common share	$ 0.10	$ 0.14
Basic weighted average common shares outstanding	22,306	22,738
Diluted weighted average common shares outstanding	22,658	23,173
Cash dividends declared per common share	$ 0.15	$ 0.14

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Net Income Per Common Share

3 Months Ended

Mar. 31, 2013

Net Income Per Common Share [Abstract]

Net Income Per Common Share

Note 5 — Net Income Per Common Share

Basic net income per common share is computed by dividing net income by the basic weighted average number of common shares outstanding during the period. Diluted net income per common share is computed by dividing net income by the diluted weighted average number of common shares and common equivalent shares outstanding during the period. The weighted average number of common equivalent shares outstanding has been determined in accordance with the treasury-stock method. Common equivalent shares consist of common stock issuable on the exercise of outstanding options and vesting of restricted stock units when dilutive.

Basic and diluted weighted average common shares are as follows (in thousands):

	Three Months Ended March 31,
	2013		2012
Basic weighted average common shares outstanding		22,306		22,738
Weighted average common equivalent shares		352		435
Diluted weighted average common shares outstanding		22,658		23,173
Options excluded from diluted weight average share calculation as effect would have been anti-dilutive		1,198		406

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Reorganization

3 Months Ended

Mar. 31, 2013

Reorganization [Abstract]

Reorganization

Note 4 — Reorganization

The following table rolls forward the activity in the reorganization accrual for the three months ended March 31, 2013 (in thousands):

	Workforce Reduction
Accrual at December 31, 2012	$	14
Additions		1,591
Cash payments		(459	)
Accrual at March 31, 2013	$	1,146

In the first quarter of 2013 the Company incurred $1.6 million of severance and related costs for the elimination of 31 jobs or approximately 2.5% of its workforce worldwide to streamline its operations. The Company anticipates incurring an additional $0.3 million of severance and related costs in the second quarter of 2013 related to this reduction. The accrual at March 31, 2013 and any additional costs in the second quarter are expected to be paid by the end of 2013.

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Operating Segments (Tables)

3 Months Ended

Mar. 31, 2013

Operating Segments [Abstract]

Summary of reportable segments

	BT		M&S		Events			Consolidated
Three Months Ended March 31, 2013
Revenue	$	38,875	$	31,782	$	842		$	71,499
Direct margin		27,031		21,318		(263	)		48,086
Selling, marketing, administrative and other expenses									(42,518	)
Amortization of intangible assets									(559	)
Reorganization costs									(1,591	)
Other income and gains/losses on investments									325
Income before income taxes								$	3,743

	BT		M&S		Events			Consolidated
Three Months Ended March 31, 2012
Revenue	$	38,325	$	31,180	$	755		$	70,260
Direct margin		26,207		20,680		(293	)		46,594
Selling, marketing, administrative and other expenses									(40,009	)
Amortization of intangible assets									(614	)
Reorganization costs									(1,343	)
Other income and gains/losses on investments									468
Income before income taxes								$	5,096

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Marketable Investments (Tables)

3 Months Ended

Mar. 31, 2013

Marketable Investments [Abstract]

Summary of the Company's marketable investments

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Market Value
March 31, 2013
Available-for-sale securities
State and municipal obligations	$	18,669	$	36	$	—		$	18,705
Federal agency and corporate obligations		101,580		338		(15	)		101,903
Total short-term available-for-sale securities		120,249		374		(15	)		120,608
ARS, long-term		11,000		—		(2,074	)		8,926
Total available-for-sale securities	$	131,249	$	374	$	(2,089	)	$	129,534

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Market Value
December 31, 2012
Available-for-sale securities
State and municipal obligations	$	18,859	$	27	$	(14	)	$	18,872
Federal agency and corporate obligations		115,653		380		(29	)		116,004
Total short-term available-for-sale securities		134,512		407		(43	)		134,876
ARS, long-term		11,000		—		(2,030	)		8,970
Total available-for-sale securities	$	145,512	$	407	$	(2,073	)	$	143,846

Summary of available for sale securities at their contractual maturity date

	FY 2013		FY2014		FY2015		Thereafter		Total
State and municipal obligations	$	6,366	$	10,224	$	2,115	$	—	$	18,705
Federal agency and corporate obligations		33,193		47,892		20,818		—		101,903
ARS		—		—		—		8,926		8,926
Total	$	39,559	$	58,116	$	22,933	$	8,926	$	129,534

Summary of the gross unrealized losses and market value of available-for-sale securities with unrealized losses

	As of March 31, 2013
	Less Than 12 Months				12 Months or Greater
	Market Value		Unrealized Losses		Market Value		Unrealized Losses
State and municipal bonds	$	—	$	—	$	—	$	—
Federal agency and corporate obligations		8,976		15		—		—
ARS		—		—		8,926		2,074
Total	$	8,976	$	15	$	8,926	$	2,074

	As of December 31, 2012
	Less Than 12 Months				12 Months or Greater
	Market Value		Unrealized Losses		Market Value		Unrealized Losses
State and municipal bonds	$	9,430	$	14	$	—	$	—
Federal agency and corporate obligations		17,716		29		—		—
ARS		—		—		8,970		2,030
Total	$	27,146	$	43	$	8,970	$	2,030

Summary of Company's fair value hierarchy for its financial assets

	As of March 31, 2013
	Level 1		Level 2		Level 3		Total
Money market funds (1)	$	15,314	$	—	$	—	$	15,314
State and municipal obligations		—		18,705		—		18,705
Federal agency and corporate obligations (2)		—		151,903		—		151,903
ARS		—		—		8,926		8,926
Total	$	15,314	$	170,608	$	8,926	$	194,848

	As of December 31, 2012
	Level 1		Level 2		Level 3		Total
Money market funds (1)	$	815	$	—	$	—	$	815
State and municipal obligations		—		18,872		—		18,872
Federal agency and corporate obligations (2)		—		148,117		—		148,117
ARS		—		—		8,970		8,970
Total	$	815	$	166,989	$	8,970	$	176,774

Summary of changes in fair value of Level 3 financial assets

	ARS
Balance at December 31, 2012	$	8,970
Sales		—
Total gains (losses):
Included in other comprehensive income (loss)		(44	)
Balance at March 31, 2013	$	8,926

	ARS
Balance at December 31, 2011	$	9,565
Sales		—
Total gains (losses):
Included in other comprehensive income (loss)		16
Balance at March 31, 2012	$	9,581

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Operating Segments

3 Months Ended

Mar. 31, 2013

Operating Segments [Abstract]

Operating Segments

Note 8 — Operating Segments

Forrester is organized into two client groups with each client group responsible for writing relevant research for the roles within the client organization on a worldwide basis. The two client groups, which are considered operating segments, are: Business Technology (“BT”) and Marketing and Strategy (“M&S”). In addition, the Company’s Events segment supports both client groups. Each client group generates revenues through sales of research, advisory and other service offerings targeted at specific roles within their targeted clients. Each client group consists of research personnel focused primarily on issues relevant to particular roles and to the day-to-day responsibilities of persons within the roles. Amounts included in the Events segment relate to the operations of the events production department. Revenue reported in the Events segment consists primarily of sponsorships and event tickets to Forrester events.

Forrester evaluates reportable segment performance and allocates resources based on direct margin. Direct margin, as presented below, is defined as operating income excluding sales expenses, certain marketing and fulfillment expenses, stock-based compensation expense, general and administrative expenses, depreciation expense, amortization of intangible assets and reorganization costs. In the first quarter of 2013, the Company modified segment direct margin for each of the BT and M&S client groups to reflect the transfer of revenue and direct costs related to one product line from BT to M&S and to reallocate certain shared consulting costs between BT & M&S. Accordingly, the 2012 amounts have been reclassified to conform to the current presentation. The accounting policies used by the segments are the same as those used in the consolidated financial statements.

The following tables present information about reportable segments (in thousands):

	BT		M&S		Events			Consolidated
Three Months Ended March 31, 2013
Revenue	$	38,875	$	31,782	$	842		$	71,499
Direct margin		27,031		21,318		(263	)		48,086
Selling, marketing, administrative and other expenses									(42,518	)
Amortization of intangible assets									(559	)
Reorganization costs									(1,591	)
Other income and gains/losses on investments									325
Income before income taxes								$	3,743

	BT		M&S		Events			Consolidated
Three Months Ended March 31, 2012
Revenue	$	38,325	$	31,180	$	755		$	70,260
Direct margin		26,207		20,680		(293	)		46,594
Selling, marketing, administrative and other expenses									(40,009	)
Amortization of intangible assets									(614	)
Reorganization costs									(1,343	)
Other income and gains/losses on investments									468
Income before income taxes								$	5,096

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Stockholders' Equity

3 Months Ended

Mar. 31, 2013

Stockholders' Equity [Abstract]

Stockholders' Equity

Note 6 — Stockholders’ Equity

Equity Plans

Stock option activity for the three months ended March 31, 2013 is presented below (in thousands, except per share data):

	Number of Shares			Weighted - Average Exercise Price Per Share		Weighted - Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding at December 31, 2012		1,936		$	29.03
Granted		62			27.68
Exercised		(45	)		18.61
Forfeited		(32	)		30.75
Outstanding at March 31, 2013		1,921		$	29.20		6.35	$	6,332
Exercisable at March 31, 2013		1,071		$	26.88		4.69	$	5,346

Restricted stock unit activity for the three months ended March 31, 2013 is presented below (in thousands, except per share data):

	Number of Shares			Weighted - Average Grant Date Fair Value
Unvested at December 31, 2012		301		$	32.98
Granted		7			27.55
Vested or settled		—			—
Forfeited		(44	)		30.30
Unvested at March 31, 2013		264		$	33.29

Stock-Based Compensation

Forrester recognizes the fair value of stock-based compensation in net income over the requisite service period of the individual grantee, which generally equals the vesting period. Stock-based compensation was recorded in the following expense categories (in thousands):

	Three Months Ended March 31,
	2013		2012
Cost of services and fulfillment	$	904	$	653
Selling and marketing		422		224
General and administrative		534		446
Total	$	1,860	$	1,323

In 2009, the Company issued to its employees 95,496 performance-based RSUs. The vesting of the RSUs was subject to performance criteria and would vest at 100% or 40% on April 1, 2012, or the RSUs could be forfeited, depending on whether specified revenue growth and certain operating margin targets related to full year 2011 performance were achieved. Based on 2011 financial performance, 40% of the then outstanding RSUs vested on April 1, 2012. Compensation expense in 2010 and 2009 was recognized based on an estimate of 100% vesting of the RSUs and in the second quarter of 2011 the Company modified it assessment of vesting to the 40% level.

In 2010, the Company issued to its employees approximately 63,000 performance-based RSUs. The vesting of the RSUs was subject to performance criteria and would vest at 100% or 40% on April 1, 2013, or the RSUs could be forfeited, depending on whether specified revenue growth and certain operating margin targets related to full year 2012 performance were achieved. Based on 2012 financial performance these RSUs were forfeited. Compensation expense through the third quarter of 2011 was recognized based on an estimate of 100% vesting of the RSUs and in the fourth quarter of 2011 the Company modified its assessment of vesting to a zero percent level. The Company continued to utilize a zero percent vesting estimate through the first quarter of 2013.

In 2011, the Company issued to its employees approximately 71,000 performance-based RSUs. The vesting of the RSUs is subject to performance criteria and will vest at 100% or 40% on April 1, 2014, or the RSUs could be forfeited, depending on whether specified revenue growth and certain operating margin targets related to full year 2013 performance are achieved. Compensation expense through the third quarter of 2011 was recognized based on an estimate of 100% vesting of the RSUs and in the fourth quarter of 2011 the Company modified its assessment of vesting to a zero percent level. The Company continued to utilize a zero percent vesting estimate through the first quarter of 2013.

Forrester utilizes the Black-Scholes valuation model for estimating the fair value of stock-based compensation. Options granted under the equity incentive plans and shares subject to purchase under the employee stock purchase plan were valued using the following assumptions:

	Three Months Ended March 31, 2013						Three Months Ended March 31, 2012
	Equity Incentive Plans			Employee Stock Purchase Plan			Equity Incentive Plans			Employee Stock Purchase Plan
Average risk-free interest rate		0.81	%		0.11	%		0.84	%		0.14	%
Expected dividend yield		2.1	%		2.1	%		1.7	%		1.7	%
Expected life		4.5 Years			0.5 Years			4.5 Years			0.5 Years
Expected volatility		40	%		25	%		40	%		31	%
Weighted average fair value	$	7.72		$	5.97		$	10.05		$	7.54

Dividends

In the first quarter of 2013, the Company declared and paid a dividend of $0.15 per share or $3.4 million in the aggregate. In the first quarter of 2012, the Company declared and paid a dividend of $0.14 per share or $3.2 million in the aggregate. In April 2013, the Company declared a dividend of $0.15 per share payable on June 19, 2013 to shareholders of record as of June 5, 2013.

Treasury Stock

Forrester’s Board of Directors has authorized an aggregate $360.0 million, including $50 million authorized in February 2013, to purchase common stock under the stock repurchase program. The shares repurchased may be used, among other things, in connection with Forrester’s employee and director equity incentive and purchase plans. As of March 31, 2013, Forrester had repurchased approximately 9.2 million shares of common stock at an aggregate cost of approximately $210.8 million.

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Income Taxes

3 Months Ended

Mar. 31, 2013

Income Taxes [Abstract]

Income Taxes

Note 7 — Income Taxes

Forrester provides for income taxes on an interim basis according to management’s estimate of the effective tax rate expected to be applicable for the full fiscal year. Certain items such as changes in tax rates and tax benefits related to disqualifying dispositions of incentive stock options are treated as discrete items and are recorded in the period in which they arise.

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Recent Accounting Pronouncements

3 Months Ended

Mar. 31, 2013

Recent Accounting Pronouncements [Abstract]

Recent Accounting Pronouncements

Note 9 — Recent Accounting Pronouncements

In July 2012, the Financial Accounting Standards Board issued ASU No. 2012-02, Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment (ASU 2012-02). This newly issued accounting standard allows an entity the option to first assess qualitative factors to determine whether it is necessary to perform a quantitative impairment test for indefinite-lived intangibles other than goodwill. Under that option, an entity would no longer be required to calculate the fair value of an indefinite-lived intangible asset unless the entity determines, based on that qualitative assessment, that it is more likely than not that the fair value of the indefinite-lived intangible asset is less than its carrying amount. This ASU is effective for annual and interim indefinite-lived intangible asset impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted. As the Company does not have any indefinite-lived intangible assets as of March 31, 2013 other than goodwill, the adoption of this standard on January 1, 2013 did not have an impact on the Company’s consolidated results.

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Stockholders' Equity (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013
Summary of stock option activity
Number of Shares, Outstanding at December 31, 2012	1,936
Number of Shares, Granted	62
Number of Shares, Exercised	(45)
Number of Shares, Forfeited	(32)
Number of Shares, Outstanding at March 31, 2013	1,921
Number of Shares, Exercisable at March 31, 2013	1,071
Weighted Average Exercise Price Per Share, Outstanding, Beginning balance	$ 29.03
Weighted Average Exercise Price Per Share, Granted	$ 27.68
Weighted Average Exercise Price Per Share, Exercised	$ 18.61
Weighted Average Exercise Price Per Share, Forfeited	$ 30.75
Weighted Average Exercise Price Per Share, Outstanding, Ending balance	$ 29.20
Weighted Average Exercise Price Per Share, Exercisable at March 31, 2013	$ 26.88
Weighted Average Remaining Contractual Term, Outstanding at March 31, 2013	6 years 4 months 6 days
Weighted Average Remaining Contractual Term, Exercisable at March 31, 2013	4 years 8 months 9 days
Aggregate Intrinsic Value, Outstanding at March 31, 2013	$ 6,332
Aggregate Intrinsic Value, Exercisable at March 31, 2013	$ 5,346

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Net Income Per Common Share (Tables)

3 Months Ended

Mar. 31, 2013

Net Income Per Common Share [Abstract]

Summary of basic and diluted weighted average common shares

	Three Months Ended March 31,
	2013		2012
Basic weighted average common shares outstanding		22,306		22,738
Weighted average common equivalent shares		352		435
Diluted weighted average common shares outstanding		22,658		23,173
Options excluded from diluted weight average share calculation as effect would have been anti-dilutive		1,198		406

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Marketable Investments (Details 2) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Summary of the gross unrealized losses and market value of available-for-sale securities with unrealized losses
Available for sale securities, Less Than 12 Months, Market Value	$ 8,976	$ 27,146
Available for sale securities, Less Than 12 Months, Unrealized Losses	15	43
Available for sale securities, 12 Months or Greater, Market Value	8,926	8,970
Available for sale securities, 12 Months or Greater, Unrealized Losses	2,074	2,030
State and municipal bonds [Member]
Summary of the gross unrealized losses and market value of available-for-sale securities with unrealized losses
Available for sale securities, Less Than 12 Months, Market Value		9,430
Available for sale securities, Less Than 12 Months, Unrealized Losses		14
Available for sale securities, 12 Months or Greater, Market Value
Available for sale securities, 12 Months or Greater, Unrealized Losses
Federal agency and corporate obligations [Member]
Summary of the gross unrealized losses and market value of available-for-sale securities with unrealized losses
Available for sale securities, Less Than 12 Months, Market Value	8,976	17,716
Available for sale securities, Less Than 12 Months, Unrealized Losses	15	29
ARS [Member]
Summary of the gross unrealized losses and market value of available-for-sale securities with unrealized losses
Available for sale securities, 12 Months or Greater, Market Value	8,926	8,970
Available for sale securities, 12 Months or Greater, Unrealized Losses	$ 2,074	$ 2,030

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Recent Accounting Pronouncements (Details Textual) (USD $)	Mar. 31, 2013
Recent Accounting Pronouncements (Textual) [Abstract]
Indefinite-lived intangible assets	$ 0

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Consolidated Statements of Comprehensive Income (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Consolidated Statements of Comprehensive Income [Abstract]
Net income	$ 2,341	$ 3,181
Other comprehensive income, net of taxes:
Cumulative translation adjustment	(1,355)	681
Changes in market value of investments:
Unrealized gain (loss), net of taxes (benefits) of $(3) and $140	(46)	316
Less: reclassification adjustment for net gains realized in net income, net of taxes of $0 and $8		(13)
Net change in market value of investments	(46)	303
Other comprehensive income (loss)	(1,401)	984
Comprehensive income	$ 940	$ 4,165

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Non-Marketable Investments

3 Months Ended

Mar. 31, 2013

Non-Marketable Investments [Abstract]

Non-Marketable Investments

Note 3 — Non-Marketable Investments

At March 31, 2013 and December 31, 2012, the carrying value of the Company’s non-marketable investments, which were composed primarily of interests in technology-related private equity funds, were $6.8 million and $6.9 million, respectively, and are included in other assets in the Consolidated Balance Sheets.

One of the Company’s investments, with a book value of $1.1 million and $1.2 million at March 31, 2013 and December 31, 2012, respectively, is being accounted for using the cost method and, accordingly, is valued at cost unless an other-than-temporary impairment in its value occurs. The other investments are being accounted for using the equity method as the investments are limited partnerships and the Company has an ownership interest in excess of 5% and, accordingly, the Company records its share of the investee’s operating results each period. The Company recorded a gain (loss) from its non-marketable investments of $(0.1) million and $0.1 million during the three months ended March 31, 2013 and 2012, respectively, which are included in gains (losses) on investments, net in the Consolidated Statements of Income.

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Marketable Investments (Details 3) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Summary of Company's fair value hierarchy for its financial assets
Fair value of assets on recurring basis	$ 194,848	$ 176,774
Level 1 [Member]
Summary of Company's fair value hierarchy for its financial assets
Fair value of assets on recurring basis	15,314	815
Level 2 [Member]
Summary of Company's fair value hierarchy for its financial assets
Fair value of assets on recurring basis	170,608	166,989
Level 3 [Member]
Summary of Company's fair value hierarchy for its financial assets
Fair value of assets on recurring basis	8,926	8,970
Money market funds [Member]
Summary of Company's fair value hierarchy for its financial assets
Fair value of assets on recurring basis	15,314	815
Money market funds [Member] | Level 1 [Member]
Summary of Company's fair value hierarchy for its financial assets
Fair value of assets on recurring basis	15,314	815
State and municipal obligations [Member]
Summary of Company's fair value hierarchy for its financial assets
Fair value of assets on recurring basis	18,705	18,872
State and municipal obligations [Member] | Level 2 [Member]
Summary of Company's fair value hierarchy for its financial assets
Fair value of assets on recurring basis	18,705	18,872
Federal agency and corporate obligations [Member]
Summary of Company's fair value hierarchy for its financial assets
Fair value of assets on recurring basis	151,903	148,117
Federal agency and corporate obligations [Member] | Level 2 [Member]
Summary of Company's fair value hierarchy for its financial assets
Fair value of assets on recurring basis	151,903	148,117
ARS [Member]
Summary of Company's fair value hierarchy for its financial assets
Fair value of assets on recurring basis	8,926	8,970
ARS [Member] | Level 3 [Member]
Summary of Company's fair value hierarchy for its financial assets
Fair value of assets on recurring basis	$ 8,926	$ 8,970

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Stockholders' Equity (Details Textual) (USD $)	1 Months Ended	3 Months Ended			3 Months Ended	12 Months Ended
	Feb. 28, 2013	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2012	Mar. 31, 2013 Restricted Stock Units (RSUs) [Member]	Dec. 31, 2011 Restricted Stock Units (RSUs) [Member]	Dec. 31, 2010 Restricted Stock Units (RSUs) [Member]	Dec. 31, 2009 Restricted Stock Units (RSUs) [Member]
Stockholders' Equity (Textual) [Abstract]
RSU's issued		264,000		301,000		71,000	63,000	95,496
Performance of RSU's Vesting						100% or 40% on April 1, 2014	100% or 40% on April 1, 2013	100% or 40% on April 1, 2012
Performance of Outstanding RSU's								40.00%
Weighted average grant date fair value for RSUs granted		$ 27.55
Compensation expense Estimate vesting						100.00%	100.00%	100.00%
Modified Estimate vesting of RSU's					0.00%		0.00%	40.00%
Stockholders' Equity (Additional Textual) [Abstract]
Aggregate cost of repurchase of common stock		$ 210,843,000		$ 210,843,000
Dividend declared and paid per share		$ 0.15	$ 0.14
Aggregate dividend declared for the year		3,400,000	3,200,000
Authorized to Purchase of common stock under the stock repurchase program	$ 50,000,000	$ 360,000,000
Cumulative repurchase of common stock		9,200,000

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Reorganization (Tables)

3 Months Ended

Mar. 31, 2013

Reorganization [Abstract]

Summary of roll forward of the activity in the reorganization accrual

	Workforce Reduction
Accrual at December 31, 2012	$	14
Additions		1,591
Cash payments		(459	)
Accrual at March 31, 2013	$	1,146