Gartner, Inc. (IT) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary and Q&A section highlight strong financial metrics, optimistic guidance, and strategic initiatives like AI integration and share repurchases. Despite some uncertainty in CV growth and external challenges, the company's proactive strategies and positive indicators, such as improved renewal rates and client engagement, suggest a positive market reaction. The lack of a market cap indicates a moderate reaction, leading to a 'Positive' sentiment rating.
Key Financial Performance
Fourth Quarter Revenue $1.8 billion, up 2% year-over-year as reported and unchanged FX neutral. Reasons for change include modest revenue upside and effective expense management.
Full Year Revenue $6.5 billion, up 4% as reported and 3% FX neutral. Reasons for change include increased client engagement and transformation initiatives.
Fourth Quarter EBITDA $436 million, up 5% as reported and 1% FX neutral. Reasons for change include modest revenue upside and effective expense management.
Full Year EBITDA $1.6 billion, up 4% as reported and 2% FX neutral. Reasons for change include disciplined cost management and transformation initiatives.
Fourth Quarter Free Cash Flow $271 million, down from $311 million in Q4 2024. Reasons for change include real estate lease termination payment and goodwill impairment charge.
Full Year Free Cash Flow $1.2 billion, reasons for change include strong free cash flow generation and disciplined cost management.
Contract Value (CV) $5.2 billion at the end of Q4, up 1% year-over-year. Outside the U.S. federal government, CV grew 4%. Reasons for change include growth in energy, banking, and technology sectors.
Insights Revenue Q4 grew 3% year-over-year as reported and 1% FX neutral. Full year increased 5% as reported and 4% FX neutral. Reasons for change include strong retention and recurring revenue.
Conferences Revenue Q4 was $286 million, with 8% FX-neutral growth. Full year grew 11% to $645 million. Reasons for change include increased client participation and high-value destination conferences.
Consulting Revenue Q4 was $134 million, down from $153 million in the year-ago period. Full year was $552 million compared to $559 million in the prior year. Reasons for change include variability in contract optimization.
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Operating Highlights
AI Insights Expansion: Expanded AI insights with over 6,000 AI-related documents, 1,000 unique use cases, 200,000 in-depth client conversations, and 500,000 AI-related questions answered through AskGartner.
AskGartner Rollout: Completed rollout of AskGartner, an AI-driven tool for summarizing and identifying high-value insights, leading to higher client renewal rates.
Gartner C-level Communities: Launched local, peer-driven one-day events for C-level executives to access insights, complementing destination conferences.
Geographic and Sector Growth: Achieved CV growth across practices, industry sectors, company sizes, and geographic regions, with energy, banking, and technology sectors leading growth.
International Expansion: All but two of the top 10 countries experienced CV growth, with one achieving double-digit growth.
Operational Efficiencies: Streamlined processes, applied automation, and upgraded analyst teams to increase insights volume by 50%.
Timeliness of Insights: Introduced same-day insights for critical events and reduced insight creation time for high-value types by 75%.
Digital Markets Divestiture: Entered into a definitive agreement to sell the Digital Markets business to focus on core insights delivery.
Shareholder Value Actions: Repurchased $2 billion of stock, issued investment-grade bonds, and added new directors to the board.
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Risk or Challenges
External Market Forces: Department of Government Efficiency (DOGE)-related initiatives affected U.S. federal clients, evolving trade policies created complexity for tariff-impacted enterprises, funding changes affected state and local government and education clients, and country-specific factors in several geographies led to increased scrutiny, elevated deal approval authority, and extended buying cycles.
Volatility in External Environment: Executives have responded to increased rate of change and volatility by slowing and deferring decisions, creating a tougher selling environment with higher value standards.
Client Engagement Levels: Client engagement increased modestly in 2025 but remains insufficient in the current fast-changing environment, requiring higher engagement levels to drive value and retention.
U.S. Federal Contracts: The vast majority of U.S. federal contracts came up for renewal in 2025, with Contract Value (CV) growth outside the U.S. federal government outpacing overall CV growth.
New Business Decline: New business in Global Technology Sales (GTS) and Global Business Sales (GBS) segments declined by 5% and 4% respectively outside the U.S. federal government.
Expense Management and Investments: Balancing disciplined cost management with investments in key areas such as AI, customer experience, and sales capabilities remains a challenge.
Economic Uncertainty: The pace of change and economic uncertainty continues to accelerate, requiring rapid adaptation and innovation to maintain competitiveness.
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Guidance & Outlook
Contract Value (CV) Growth: CV growth is expected to accelerate throughout 2026, with a focus on increasing new client value initiatives (NCVI) in the first half of the year. CV outside the U.S. federal government grew 4% in Q4 2025, and this trend is expected to continue.
Revenue Projections: Insights revenue is projected to reach $5.19 billion or more, reflecting FX-neutral growth of about 1%. Conferences revenue is expected to grow by 7% FX-neutral to $695 million or more. Consulting revenue is projected to grow by 3% FX-neutral to $570 million or more. Consolidated revenue is expected to reach $6.455 billion or more, reflecting FX-neutral growth of 2%.
EBITDA and Margins: Full-year EBITDA is projected to be $1.515 billion or more, with margins of 23.5% or higher. Q1 2026 adjusted EBITDA is expected to be $370 million or more.
Adjusted EPS: Adjusted EPS for 2026 is projected to be $12.30 or more, with potential upside from share repurchases and interest income.
Free Cash Flow: Free cash flow for 2026 is expected to be $1.135 billion or more, reflecting a conversion from GAAP net income of 140%.
Share Repurchases: The company plans to continue share repurchases, which will lower the share count over time and contribute to EPS accretion.
Business and Technology Insights Transformation: The company will continue its transformation efforts across four dimensions: impact, volume, timeliness, and user experience. These efforts are expected to drive step-change improvements in client value over the next few years.
Conferences and Events: 56 in-person destination conferences are planned for 2026, with Q4 expected to be the largest quarter for revenue. Advanced bookings provide strong visibility into 2026 revenue.
Sales Headcount Growth: GTS quota-bearing headcount is expected to grow in the low single digits, while GBS quota-bearing headcount is expected to grow in the mid-single digits in 2026.
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Shareholder Return Plan
Share Repurchase Program: Gartner repurchased more than $2 billion of its stock in 2025. The company also increased leverage with a successful inaugural investment-grade bond offering to support additional share repurchase capacity. During the fourth quarter, Gartner repurchased about $500 million of stock, and for the full year, the total repurchase amounted to $2 billion. The Board refreshed the authorization for share repurchases, bringing the total to about $1.2 billion, with expectations for further refreshes as needed. Share repurchases are aimed at creating shareholder value through EPS accretion and increasing returns on invested capital.
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Key Q&A
Q:On the expected Contract Value (CV) acceleration as 2026 unfolds, are you expecting acceleration beyond the lessening federal government headwind?
A:Yes, CV is expected to accelerate throughout the year, not just due to lesser federal government headwinds. Changes made in the second half of last year as part of the transformation program are expected to drive CV growth in 2026 and into 2027.
Q:What are the leading indicators for CV growth, such as in-quarter renewal rates?
A:Leading indicators include increased client engagement, higher conference scores, and the impact of AskGartner, which provides better access to content. Clients using AskGartner had significantly higher renewal rates. These indicators suggest positive trends, though the full impact will take 12-24 months to materialize.
Q:How are you thinking about getting back to high single-digit CV growth in 2026?
A:CV growth is expected to accelerate over 2026, supported by reduced federal government headwinds and internal operational changes. While specific CV guidance is not provided, the company expects all discussed factors to contribute positively.
Q:Do you expect the quarterly phasing of CV growth in 2026 to be similar to historical patterns?
A:Yes, the quarterly phasing is expected to be consistent with historical patterns, with more renewals in Q1 and Q4. The transformation initiatives are expected to have a greater impact in the second half of the year.
Q:What drove the recent strategic steps, such as the divestiture of the non-subscription business and organizational realignment?
A:The company is preparing for a world of ongoing disruption and chaos by focusing on its core BTI business and driving client engagement. The divestiture of the Digital Markets business and staff changes were part of this strategy to enhance skills and focus on core areas.
Q:Are there any changes to institutionalizing the process for collecting proprietary insights from customers?
A:Yes, the company has developed sophisticated systems, including a neural network-based system, to identify trending topics and provide analysts with relevant insights. This is a core part of the BTI transformation.
Q:Did AI enter renewal conversations more in Q4, and what feedback are you hearing from clients?
A:AI is the single biggest issue clients seek help with, but it is not seen as a substitute for Gartner's services. Clients value Gartner's insights, and AI-related concerns have not significantly impacted renewals.
Q:Are the challenges with the federal government and tariff-impacted industries improving?
A:Federal government challenges are expected to normalize after Q1, as most cancellations due to budget issues will have occurred. Tariff-impacted industries are stabilizing, and the company is increasing client value through its transformation initiatives.
Q:What gives you confidence in achieving medium-term guidance despite ongoing disruptions?
A:The company is enhancing client value through its transformation program, which is showing positive early indicators. The large addressable market and continued investments in client engagement support confidence in achieving medium-term guidance.
Q:What is the time frame for realizing the full benefits of the transformation program?
A:The full benefits will take a couple of years to materialize, as clients need to use the new offerings and renew their contracts. CV growth is expected to accelerate over 2026 and beyond.
Q:What internal changes are being made to drive better retention?
A:Changes include new content types, process restructuring, and automation (including AI) to reduce production time for insights. These changes aim to increase client engagement and retention.
Q:Are there any changes to the sales strategy or quota-bearing headcount growth for 2026?
A:The company is innovating in sales with AI-based role-play tools, weekly content updates for sales teams, and expanding business developers. A modest sales force expansion is planned, focusing on business developers due to their strong productivity.
Q:Are clients reducing seats or taking lower levels of service instead of canceling outright?
A:Yes, most retention issues involve clients reducing seats due to budget constraints or unfilled positions, rather than outright cancellations.
Q:What is the outlook for the sales environment in 2026?
A:The company assumes the sales environment will remain challenging, with mixed conditions across industries. Some areas, like tariff-impacted industries, are stabilizing, while others, like oil producers, face more challenges.
Q:Is the margin guidance for 2026 a new baseline, or will margins return to 25%?
A:The 23.5% margin guidance is considered a new baseline, with expectations for margin expansion in the future as CV growth accelerates and investments yield returns.
Q:Review of Unclear Management Responses
A:Management avoided providing specific guidance on CV growth rates and used vague language when discussing the impact of external market conditions and the time frame for achieving medium-term guidance. They also did not provide detailed data on the effectiveness of specific transformation initiatives or the exact impact of AI on client decision-making.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Clients
Gartner Chairman
Gartner insight
Gartner level
Gartner stock
access
change improvement
client Gartner
client insight
client mission
day event
dimension volume
engagement
experience insight
insight client
insight dimension
insight library
insight pace
insight type
insight value
key opportunity
level Communities
market force
objective
pace world
rate change
step change
technology insight
timeliness user
topic client
transformation technology
user AskGartner
user experience
volume client
volume timeliness
IT Transcript
Gartner, Inc. (IT) Q4 2025 Earnings Call Transcript
Positive2-3
The earnings call summary and Q&A section highlight strong financial metrics, optimistic guidance, and strategic initiatives like AI integration and share repurchases. Despite some uncertainty in CV growth and external challenges, the company's proactive strategies and positive indicators, such as improved renewal rates and client engagement, suggest a positive market reaction. The lack of a market cap indicates a moderate reaction, leading to a 'Positive' sentiment rating.
Gartner, Inc. (IT) Q3 2025 Earnings Call Transcript
Unknown11-4
The earnings call summary presents a mixed outlook: strong AI initiatives and AskGartner rollout suggest potential growth, but financial projections show modest growth rates. The Q&A revealed management's vague responses on CV improvement and AI impact, raising uncertainties. Despite operational improvements and revenue growth, the lack of detailed guidance and muted growth in key areas like non-subscription revenue and consulting tempers optimism. Therefore, the overall sentiment is neutral, expecting a stock price movement between -2% and 2%.
Gartner, Inc. (IT) Q2 2025 Earnings Call Transcript
Unknown8-5
The earnings call summary shows a mix of positive and negative indicators. While there is strong demand for optimization services and a robust pipeline in AI and cybersecurity, there are concerns about tariffs affecting business and stretched selling cycles. The Q&A section reveals management's evasiveness on AI's cost impact and tariff details, adding uncertainty. Guidance is optimistic, but operational challenges and client behavior shifts temper enthusiasm. Overall, the sentiment is balanced, leading to a neutral stock price prediction.
Gartner, Inc. (IT) Q1 2025 Earnings Call Transcript
Unknown5-6
The earnings report shows moderate growth in revenue and financial metrics, but the Q&A reveals concerns about U.S. federal contracts and a downward revision of research revenue outlook. Positive elements include strong free cash flow and a share repurchase program. However, the lack of clarity in management responses and the cautious guidance suggest a mixed sentiment, likely resulting in a neutral stock price movement.
IT Slides
IT Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
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No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
