Operating Segments

6 Months Ended

Jun. 30, 2020

Note 14 — Operating Segments

As described in the Company’s Form 8-K filed on April 2, 2020, Forrester’s Chief Product Officer resigned from the Company effective April 17, 2020. Subsequently, the Chief Product Officer position was eliminated and the Company reorganized its operations to reflect three lines of business: Research, Consulting, and Events. As a result of these changes, during the three months ended June 30, 2020, the Company realigned its internal reporting into Research, Consulting, and Events. The realignment eliminated the Products segment as the product lines and organizations supporting the related revenues began operating under the new management structure. The prior period amounts have been revised to conform to the current presentation.

The Research segment includes the revenues of the Research, Connect and Analytics products and the cost of the organizations responsible for developing and delivering these products. In addition, this segment includes Consulting revenues from the delivery of advisory services (such as workshops, speeches and advisory days) delivered by the Company’s research and analytics analysts. The costs of the product management organization that is responsible for product pricing and packaging, and the launch of new products is included in this segment.

The Consulting segment includes the revenues and the related costs of the Company’s project consulting organization. The project consulting organization delivers a majority of the Company’s project consulting revenue and certain advisory services.

The Events segment includes the revenues and the costs of the organization responsible for developing and hosting in-person and virtual events.

The Company evaluates reportable segment performance and allocates resources based on segment revenues and expenses. Segment expenses include the direct expenses of each segment organization and excludes selling and marketing expenses, general and administrative expenses, stock-based compensation expense, depreciation expense, adjustments to incentive bonus compensation from target amounts, amortization of intangible assets, interest and other expense, and gains (losses) on investments. The accounting policies used by the segments are the same as those used in the consolidated financial statements.

The Company provides disaggregated revenue by product in the segment tables below (in thousands):

	Research			Consulting			Events			Consolidated
Three Months Ended June 30, 2020
Research revenues
Research	$	55,358		$	—		$	—		$	55,358
Connect		13,078			—			—			13,078
Analytics		5,185			—			—			5,185
Total research revenues		73,621			—			—			73,621
Consulting		13,351			21,537			—			34,888
Events		—			—			5,032			5,032
Total segment revenues		86,972			21,537			5,032			113,541
Segment expenses		(25,870	)		(10,099	)		(3,206	)		(39,175	)
Selling, marketing, administrative and other expenses											(57,810	)
Amortization of intangible assets											(4,713	)
Acquisition and integration costs											(612	)
Interest expense, other expense and gains on investments											844
Income before income taxes										$	12,075

	Research			Consulting			Events			Consolidated
Three Months Ended June 30, 2019
Research revenues
Research	$	56,305		$	—		$	—		$	56,305
Connect		14,067			—			—			14,067
Analytics		5,907			—			—			5,907
Total research revenues		76,279			—			—			76,279
Consulting		15,024			18,993			—			34,017
Events		—			—			17,887			17,887
Total segment revenues		91,303			18,993			17,887			128,183
Segment expenses		(31,209	)		(9,474	)		(10,693	)		(51,376	)
Selling, marketing, administrative and other expenses											(64,599	)
Amortization of intangible assets											(5,099	)
Acquisition and integration costs											(2,487	)
Interest expense, other expense and losses on investments											(2,179	)
Income before income taxes										$	2,443

	Research			Consulting			Events			Consolidated
Six Months Ended June 30, 2020
Research revenues
Research	$	108,964		$	—		$	—		$	108,964
Connect		26,967			—			—			26,967
Analytics		10,486			—			—			10,486
Total research revenues		146,417			—			—			146,417
Consulting		27,377			40,970			—			68,347
Events		—			—			5,122			5,122
Total segment revenues		173,794			40,970			5,122			219,886
Segment expenses		(53,334	)		(20,120	)		(3,883	)		(77,337	)
Selling, marketing, administrative and other expenses											(117,685	)
Amortization of intangible assets											(9,425	)
Acquisition and integration costs											(3,487	)
Interest expense, other income and gains on investments											(371	)
Income before income taxes										$	11,581

	Research			Consulting			Events			Consolidated
Six Months Ended June 30, 2019
Research revenues
Research	$	106,085		$	—		$	—		$	106,085
Connect		27,638			—			—			27,638
Analytics		11,165			—			—			11,165
Total research revenues		144,888			—			—			144,888
Consulting		29,411			36,392			—			65,803
Events		—			—			18,141			18,141
Total segment revenues		174,299			36,392			18,141			228,832
Segment expenses		(61,148	)		(18,908	)		(11,665	)		(91,721	)
Selling, marketing, administrative and other expenses											(126,610	)
Amortization of intangible assets											(11,309	)
Acquisition and integration costs											(5,454	)
Interest expense, other expense and losses on investments											(4,837	)
Loss before income taxes										$	(11,099	)