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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Before Income Taxes

Income before income taxes consists of the following (in thousands):

		Years Ended December 31,
		2023				2022				2021
Domestic		$	(4,058	)		$	16,552			$	22,424
Foreign			10,343				14,172				10,767
Total		$	6,285			$	30,724			$	33,191

Components of Income Tax Expense

The components of the income tax expense are as follows (in thousands):

		Years Ended December 31,
		2023				2022				2021
Current:
Federal		$	3,867			$	9,349			$	4,203
State			1,922				3,819				2,272
Foreign			2,907				2,402				2,147
Total current			8,696				15,570				8,622
Deferred:
Federal			(3,872	)			(5,513	)			334
State			(1,597	)			(1,788	)			(663	)
Foreign			8				649				54
Total deferred			(5,461	)			(6,652	)			(275	)
Income tax expense		$	3,235			$	8,918			$	8,347

Reconciliation of Federal Statutory Rate

A reconciliation of the federal statutory rate to Forrester’s effective tax rate is as follows:

		Years Ended December 31,
		2023				2022				2021
Income tax provision at federal statutory rate			21.0	%			21.0	%			21.0	%
Increase (decrease) in tax resulting from:
State tax provision, net of federal benefit			8.1				5.2				3.8
Foreign tax rate differential			2.7				(0.5	)			(0.4	)
Stock compensation			17.5				0.9				(0.4	)
Withholding taxes			6.2				1.7				1.3
Non-deductible expenses			8.1				1.5				—
Permanent differences			(1.7	)			(0.3	)			(0.3	)
Change in valuation allowance			0.5				1.0				—
Foreign subsidiary income subject to U.S. tax			1.2				1.3				0.2
Foreign-derived intangible income benefit			(3.8	)			(0.7	)			(0.7	)
Change in tax legislation			(8.1	)			(1.6	)			(0.3	)
Foreign exchange gain on previously taxed earnings and profits			1.6				—				—
Other, net			(1.8	)			(0.5	)			0.9
Effective tax rate			51.5	%			29.0	%			25.1	%

Components of Deferred Income Taxes

The components of deferred income taxes are as follows (in thousands):

		As of December 31,
		2023				2022
Non-deductible reserves and accruals		$	3,077			$	2,736
Net operating loss and other carryforwards			6,262				6,215
Stock compensation			2,676				2,051
Depreciation and amortization			435				—
Lease liability			12,276				17,715
Gross deferred tax asset			24,726				28,717
Less - valuation allowance			(1,065	)			(989	)
Sub-total			23,661				27,728
Other liabilities			(733	)			(807	)
Depreciation and amortization			—				(1,023	)
Goodwill and intangible assets			(15,181	)			(18,648	)
Operating lease right-of-use assets			(9,163	)			(13,705	)
Deferred commissions			(6,545	)			(6,913	)
Net deferred tax liability		$	(7,961	)		$	(13,368	)

Summary of Changes in Deferred Tax Valuation Allowance

The following table provides a summary of the changes in the deferred tax valuation allowance for the years ended December 31, 2023, 2022, and 2021 (in thousands):

		2023				2022				2021
Deferred tax valuation allowance at January 1		$	989			$	1,114			$	1,237
Additions			39				106				—
Deductions			—				(336	)			(108	)
Change in tax legislation			(4	)			186				—
Translation adjustments			41				(81	)			(15	)
Deferred tax valuation allowance at December 31		$	1,065			$	989			$	1,114

Reconciliation of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is summarized as follows for the years ended December 31, 2023, 2022, and 2021 (in thousands):

		2023				2022				2021
Unrecognized tax benefits at January 1		$	—			$	5			$	28
Reductions for tax positions of prior years			—				(4	)			(24	)
Translation adjustments			—				(1	)			1
Unrecognized tax benefits at December 31		$	—			$	—			$	5

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