Operating Segments

3 Months Ended

Mar. 31, 2014

Segment Reporting [Abstract]

Operating Segments

Note 9 — Operating Segments

At the end of 2013 the Company reorganized its fulfillment organization into a single global research organization and a single global product organization to better support its client base by facilitating better research collaboration and quality, promoting a more uniform client experience and improved customer satisfaction, and encouraging innovation. During 2013 the Company also established a dedicated consulting organization to provide research-based project consulting services to its clients, allowing the Company’s research personnel to spend additional time on writing research and providing shorter-term advisory services. As of January 1, 2014 the Company conformed its internal reporting to match the new organizational structure and as such is reporting segment information for the newly formed Research, Product and Project Consulting organizations. The 2013 segment amounts have been reclassified to conform to the current presentation.

The Research segment includes the costs of the Company’s research personnel who are responsible for writing the research and performing the webinars and inquiries for the Company’s RoleView product. In addition, the research personnel deliver advisory services (such as workshops, speeches and advisory days) and a portion of the Company’s project consulting services. Revenue in this segment includes only revenue from advisory services and project consulting services that are delivered by the research personnel in this segment. During 2013, the Company began to transition the delivery of project consulting to a dedicated project consulting organization. The Company anticipates that the transition will be complete by the end of 2014 such that essentially all project consulting will be delivered by the project consulting organization in 2015.

The Product segment includes the costs of the product management organization that is responsible for pricing, packaging and the launch of new products. In addition, this segment includes the costs of the Company’s data, Forrester Leadership Boards and events organizations. Revenue in this segment includes all revenue for the Company (including RoleView) except for revenue from advisory services and project consulting services that are delivered by personnel in the Research and Project Consulting segments.

The Project Consulting segment includes the costs of the consultants that deliver the Company’s project consulting services. During 2013 the Company began to hire dedicated consultants to transition the delivery of project consulting services from research personnel (included in the Research segment) to the new Project Consulting segment. Revenue in this segment includes the project consulting revenue delivered by the consultants in this segment.

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 exclude 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 and reorganization costs. 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):

	Products		Research		Project Consulting			Consolidated
Three Months Ended March 31, 2014
Research services revenues	$	50,793	$	—	$	—		$	50,793
Advisory services and events revenues		2,857		13,976		5,445			22,278
Total segment revenues		53,650		13,976		5,445			73,071
Segment expenses		8,351		13,975		5,677			28,003
Contribution margin (loss)		45,299		1		(232	)		45,068
Selling, marketing, administrative and other expenses									(43,660	)
Amortization of intangible assets									(539	)
Reorganization costs									(849	)
Other income and gains/losses on investments									(27	)
Income (loss) before income taxes								$	(7	)

	Products		Research		Project Consulting		Consolidated
Three Months Ended March 31, 2013
Research services revenues	$	50,278	$	—	$	—	$	50,278
Advisory services and events revenues		2,219		14,938		3,926		21,083
Total segment revenues		52,497		14,938		3,926		71,361
Segment expenses		7,570		13,882		3,349		24,801
Contribution margin (loss)		44,927		1,056		577		46,560
Selling, marketing, administrative and other expenses								(41,130	)
Amortization of intangible assets								(559	)
Reorganization costs								(1,591	)
Other income and gains/losses on investments								176
Income (loss) before income taxes							$	3,456