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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Before Income Taxes | Income before income taxes consists of the following (in thousands):
|  | Years Ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
Domestic |  | $ | (1,775 | ) |  | $ | (4,058 | ) |  | $ | 16,552 |
Foreign |  |  | 4,412 |  |  |  | 10,343 |  |  |  | 14,172 |
Total |  | $ | 2,637 |  |  | $ | 6,285 |  |  | $ | 30,724 |
Components of Income Tax Expense | The components of the income tax expense are as follows (in thousands):
|  | Years Ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
Current: |  |  |  |  |  |  |  |  |
Federal |  | $ | 2,874 |  |  | $ | 3,867 |  |  | $ | 9,349 |
State |  |  | 613 |  |  |  | 1,922 |  |  |  | 3,819 |
Foreign |  |  | 4,955 |  |  |  | 2,907 |  |  |  | 2,402 |
Total current |  |  | 8,442 |  |  |  | 8,696 |  |  |  | 15,570 |
Deferred: |  |  |  |  |  |  |  |  |
Federal |  |  | (636 | ) |  |  | (3,872 | ) |  |  | (5,513 | )
State |  |  | 763 |  |  |  | (1,597 | ) |  |  | (1,788 | )
Foreign |  |  | (185 | ) |  |  | 8 |  |  |  | 649 |
Total deferred |  |  | (58 | ) |  |  | (5,461 | ) |  |  | (6,652 | )
Income tax expense |  | $ | 8,384 |  |  | $ | 3,235 |  |  | $ | 8,918 |
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, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
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 |  |  | 40.6 |  |  |  | 8.1 |  |  |  | 5.2 |
Foreign tax rate differential |  |  | 37.7 |  |  |  | 2.7 |  |  |  | (0.5 | )
Stock compensation |  |  | 66.6 |  |  |  | 17.5 |  |  |  | 0.9 |
Withholding taxes |  |  | 31.7 |  |  |  | 6.2 |  |  |  | 1.7 |
Non-deductible expenses |  |  | 23.1 |  |  |  | 8.1 |  |  |  | 1.5 |
Goodwill related to sale of FeedbackNow |  |  | 93.9 |  |  |  | — |  |  |  | — |
Permanent differences |  |  | (0.1 | ) |  |  | (1.7 | ) |  |  | (0.3 | )
Change in valuation allowance |  |  | 0.4 |  |  |  | 0.5 |  |  |  | 1.0 |
Foreign subsidiary income subject to U.S. tax |  |  | (1.6 | ) |  |  | 1.2 |  |  |  | 1.3 |
Foreign-derived intangible income benefit |  |  | 1.1 |  |  |  | (3.8 | ) |  |  | (0.7 | )
Change in tax legislation |  |  | — |  |  |  | (8.1 | ) |  |  | (1.6 | )
Foreign exchange gain (loss) on previously taxed earnings and profits |  |  | (0.5 | ) |  |  | 1.6 |  |  |  | — |
Currency translation gain (loss) |  |  | 3.6 |  |  |  | 0.7 |  |  |  | (0.1 | )
Other, net |  |  | 0.4 |  |  |  | (2.5 | ) |  |  | (0.4 | )
Effective tax rate |  |  | 317.9 | % |  |  | 51.5 | % |  |  | 29.0 | %
Components of Deferred Income Taxes | The components of deferred income taxes are as follows (in thousands):
|  | As of December 31, |
|  | 2024 |  |  | 2023 |
Non-deductible reserves and accruals |  | $ | 1,776 |  |  | $ | 3,077 |
Net operating loss and other carryforwards |  |  | 5,525 |  |  |  | 6,262 |
Stock compensation |  |  | 2,085 |  |  |  | 2,676 |
Depreciation and amortization |  |  | 3,485 |  |  |  | 435 |
Lease liability |  |  | 8,562 |  |  |  | 12,276 |
Gross deferred tax asset |  |  | 21,433 |  |  |  | 24,726 |
Less - valuation allowance |  |  | (1,055 | ) |  |  | (1,065 | )
Sub-total |  |  | 20,378 |  |  |  | 23,661 |
Other liabilities |  |  | (2,553 | ) |  |  | (733 | )
Goodwill and intangible assets |  |  | (13,837 | ) |  |  | (15,181 | )
Operating lease right-of-use assets |  |  | (5,822 | ) |  |  | (9,163 | )
Deferred commissions |  |  | (6,071 | ) |  |  | (6,545 | )
Net deferred tax liability |  | $ | (7,905 | ) |  | $ | (7,961 | )
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, 2024, 2023, and 2022 (in thousands):
|  | 2024 |  |  | 2023 |  |  | 2022 |
Deferred tax valuation allowance at January 1 |  | $ | 1,065 |  |  | $ | 989 |  |  | $ | 1,114 |
Additions |  |  | 19 |  |  |  | 39 |  |  |  | 106 |
Deductions |  |  | (8 | ) |  |  | — |  |  |  | (336 | )
Change in tax legislation |  |  | — |  |  |  | (4 | ) |  |  | 186 |
Translation adjustments |  |  | (21 | ) |  |  | 41 |  |  |  | (81 | )
Deferred tax valuation allowance at December 31 |  | $ | 1,055 |  |  | $ | 1,065 |  |  | $ | 989 |
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, 2024, 2023, and 2022 (in thousands):
|  | 2024 |  |  | 2023 |  |  | 2022 |
Unrecognized tax benefits at January 1 |  | $ | — |  |  | $ | — |  |  | $ | 5 |
Reductions for tax positions of prior years |  |  | — |  |  |  | — |  |  |  | (4 | )
Translation adjustments |  |  | — |  |  |  | — |  |  |  | (1 | )
Unrecognized tax benefits at December 31 |  | $ | — |  |  | $ | — |  |  | $ | — |

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