Forrester (FORR) Q2 2026: Forrester AI Usage Jumps 69% as Workflow Integration Drives Client Engagement
Forrester’s Q2 results highlight swift AI adoption and deepening workflow integration, offsetting broader revenue headwinds and sustaining confidence in year-end contract value growth. The company’s pivot away from strategy consulting and focus on embedded AI solutions is reshaping its client value proposition, while leadership maintains full-year guidance amid persistent market uncertainty. Investors should watch for execution on retention and product innovation as Forrester bets on AI-driven differentiation to revive growth.
Summary
- AI Integration Surges: Forrester AI became the dominant client research interface, with user growth outpacing legacy search tools.
- Market Headwinds Persist: Consulting and events revenues declined, but core contract value bookings stabilized, aided by product innovation.
- Strategic Focus Tightens: Full-year growth hinges on AI product traction and improved salesforce productivity in key verticals.
Business Overview
Forrester is a global research and advisory firm that generates revenue through subscription-based research products, consulting services, and events. Its business is organized around contract value (CV, recurring research subscriptions), consulting (project-based advisory), and events (conferences and forums). Forrester’s core value proposition is delivering objective, actionable insights—now increasingly powered and delivered through its proprietary AI platform, Forrester AI, which is being embedded into client workflows via integrations with Microsoft Teams, Copilot, and other platforms.
Performance Analysis
Forrester’s Q2 2026 results reflect a challenging macro backdrop but also showcase early success from its AI-led product strategy. Total revenue declined 10% year-over-year, driven by an 8% drop in research revenue and a 15% decline in non-CV businesses, notably consulting and events. The consulting shortfall was largely due to the planned wind-down of the strategy consulting business, while events revenue fell 17% as the company shifted to more focused, intimate event formats.
Despite these declines, contract value (CV) bookings grew in Q2, with notable double-digit growth in tech research and positive momentum in international markets. Client count ticked up, and wallet retention remained stable. The AI access product, launched nine months ago, has now delivered $10 million in bookings and is gaining market traction. Operating margins compressed as revenues fell, but expense discipline—including a 7% headcount reduction—helped mitigate bottom-line impact. Forrester restarted its share buyback program, signaling balance sheet strength and management’s confidence in long-term value creation.
- AI Usage Overtakes Legacy Search: Forrester AI prompts rose 105% YoY, now surpassing indexed search as the primary client research interface.
- Consulting Exit Shrinks Top-Line: The deliberate exit from strategy consulting led to a $3.5 million YoY drop in consulting revenue, redirecting focus to scalable, subscription-based offerings.
- Events Repositioning: Event revenues fell, but attendee engagement increased, with flagship B2B Summit attendance up 9% and positive feedback on new event formats.
Underlying performance signals stabilization in core metrics and early validation of the AI-centric strategy, but top-line growth remains dependent on further product adoption and retention gains in the second half.
Executive Commentary
"Forrester AI usage increased to new highs in the quarter, with total users up 33% in Q2 versus Q1 and up 69% year over year. Forrester AI prompts were up 58% in Q2 compared to Q1 and up 105% year over year. In Q2, Forrester AI eclipsed indexed search to become the dominant method used by Forrester Decisions clients to interact with our research database."
George Colony, Chief Executive Officer and Chairman
"Our performance in the second quarter gives us renewed confidence of hitting our CV plan for the year, with the target of achieving CV growth as we exit 2026. We remain on a path for CV growth by year end. Despite some market turbulence, we're seeing consistent demand for our products, driven by the need for trusted AI advice, continued adoption of Forrester AI, and ongoing product enhancements, making Forrester more embedded in clients' workflows."
Chris Finn, Chief Financial Officer
Strategic Positioning
1. AI-Driven Product Embedding
Forrester is betting on AI-powered workflow integration—with Forrester AI now accessible via Microsoft Teams and Copilot—for deeper client engagement. This approach moves Forrester from a static research provider to an embedded, decision-support platform, aligning with clients’ shift toward AI-enabled operations.
2. Contract Value (CV) Stabilization and Expansion
Stabilizing core CV metrics is a top priority. Bookings growth in tech and international segments, along with a focus on improving salesforce productivity and retention, underpins management’s confidence in returning to CV growth by year-end.
3. Consulting and Events Portfolio Restructuring
The exit from strategy consulting is freeing sales capacity for higher-margin, recurring CV offerings. Events are being reimagined as smaller, more interactive experiences, which, while reducing revenue, appear to enhance client engagement and influence contract bookings.
4. Vertical and Geographic Focus
Salesforce reorganization by verticals (such as tech and manufacturing) and a renewed push in international markets (EMEA, APAC) are yielding pockets of growth, even as North American government remains a near-term drag with signs of improvement expected in Q3.
5. Capital Allocation and Shareholder Returns
With over $130 million in cash and low leverage, Forrester restarted its share buyback program and plans to accelerate repurchases, reflecting confidence in both liquidity and long-term value creation.
Key Considerations
Forrester’s Q2 underscores a high-stakes transition from legacy research and consulting toward an AI-embedded, subscription-first model. Leadership’s conviction in AI as a differentiator is clear, but execution risk remains as the company navigates shifting client needs and competitive pressures.
Key Considerations:
- AI Product Adoption Pace: Sustained user growth and client engagement with Forrester AI are critical to offsetting legacy revenue declines.
- Salesforce Productivity: Management is prioritizing productivity improvements over headcount expansion, with balanced scorecards and vertical specialization driving accountability.
- Retention and Upsell Dynamics: While churn and downsell are stable, upsell activity remains flat, posing a challenge for CV acceleration.
- Consulting and Events Restructuring: The deliberate exit from strategy consulting and new event formats must deliver higher-margin, scalable growth to justify the transition.
- Capital Deployment: Accelerated buybacks signal confidence but also heighten the need for operational execution to maintain financial flexibility.
Risks
Forrester faces execution risk in achieving CV growth as legacy revenue streams shrink and the company pivots to AI-led offerings. Prolonged consulting and event declines, slower-than-expected AI adoption, or failure to improve salesforce productivity could pressure both top-line and margin targets. Competitive responses from larger research or technology firms embedding similar AI capabilities may also dilute Forrester’s differentiation.
Forward Outlook
For Q3 and the full year 2026, Forrester guided to:
- Revenue of $350 to $360 million for 2026 (down 9% to 12% YoY)
- Operating margin of 6% to 6.5%
- EPS of $0.72 to $0.82 for the full year
Management maintained guidance, citing:
- Accelerated adoption of Forrester AI and embedded product innovation
- Improving pipeline and retention metrics, especially in tech and international markets
Outlook assumes further declines in consulting and events, offset by stabilization and eventual growth in core CV bookings as new AI products scale.
Takeaways
- AI-Led Differentiation: Forrester’s pivot to embedded AI solutions is showing early traction, with user engagement metrics validating the strategy.
- Revenue Headwinds Persist: Consulting and events remain drags, but core CV bookings and product innovation are stabilizing the business.
- Execution Is Critical: Investors should monitor retention, upsell, and AI adoption rates as key indicators of Forrester’s ability to reignite sustainable growth.
Conclusion
Forrester’s Q2 2026 results illustrate a business in transition, with AI-driven workflow integration and product innovation offsetting legacy revenue declines. The company’s path to renewed growth depends on sustained AI adoption, retention gains, and disciplined execution in sales and product delivery.
Industry Read-Through
Forrester’s experience offers a roadmap for research and advisory peers navigating the shift from static content delivery to embedded, AI-powered insights. Rapid adoption of workflow-integrated AI agents signals a broader industry trend: clients now expect research and guidance to be accessible within their daily tools, not siloed in separate platforms. The exit from lower-margin, labor-intensive consulting reflects a wider move toward scalable, subscription-based models. As AI transforms knowledge work, firms that can embed proprietary expertise directly into client workflows—and measure engagement—will be best positioned for recurring revenue growth and defensible differentiation. Competitors failing to adapt risk disintermediation as clients demand speed, confidence, and seamless access to actionable insights.