- Revenue: Second quarter revenue was $1.7 billion, up 3% year-over-year as reported and 2% FX neutral.
- EBITDA: Second quarter EBITDA was $466 million, up 6% as reported and 4% FX neutral.
- Adjusted EPS: Adjusted EPS was $4.37, up 24% from Q2 of last year.
- Free Cash Flow: Free cash flow was $378 million, up 9% year-over-year.
- Contract Value (CV): Total company CV grew 2% year-over-year, a 70-basis point acceleration from Q1. CV was $5.3 billion at the end of the quarter.
- Insights Revenue: Grew 2% year-over-year as reported and 1% FX neutral, with a contribution margin of 77%, up about 140 basis points versus last year.
- GTS Contract Value: $4 billion, up 1% versus the prior year, a 70-basis point acceleration from Q1. Excluding US federal, CV grew 3%.
- GBS Contract Value: $1.3 billion, up 3% year-over-year. Ex-Fed, GBS CV grew 4%. Core subscription products grew about 7%.
- Conferences Revenue: $244 million in Q2, with same-conference revenue growth of around 12% FX neutral. Contribution margin was 59%.
- Consulting Revenue: $142 million, compared to $156 million in the year-ago period. Contribution margin was 38%.
- Contract Optimization Revenue: $148 million on an LTM basis, with a two-year revenue CAGR of about 9%.
- Return on Invested Capital: 31% on a rolling four-quarter basis.
- Share Repurchases: Repurchased $547 million of stock in Q2, reducing share count by more than 5% sequentially.
- 2026 Guidance: Expects revenue at or above $6.375 billion, EBITDA at or above $1.57 billion, adjusted EPS at or above $14, and free cash flow at or above $1.185 billion.
Release Date: August 04, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Gartner Inc IT reported Q2 revenue, EBITDA, adjusted EPS, and free cash flow ahead of expectations, with EBITDA up 6% and adjusted EPS up 24% year-over-year.
- Contract value (CV) growth accelerated to 2% year-over-year, marking the second consecutive quarter of acceleration, with ex-Fed CV growth at 3.3%.
- Client engagement improved significantly, up 140 basis points year-over-year, driven by both digital and human interactions, indicating strong client value delivery.
- The company saw strong performance in key segments: GBS core subscription products grew 7%, conferences revenue increased 12%, and midsized enterprise clients grew mid-single digits.
- Gartner Inc (IT) raised its full-year guidance for EBITDA, adjusted EPS, and free cash flow, and expects adjusted EPS to grow at a compound annual rate above 12% over the next three years.
- The company continues to return significant capital to shareholders, repurchasing $547 million of stock in Q2, reducing share count by 5% sequentially, and increasing the buyback authorization to $1.2 billion.
Negative Points
- Persistent macroeconomic and geopolitical challenges are creating budget pressures, leading executives to scrutinize expenses, escalate approval processes, and delay decisions.
- Total CV growth remains low at 2% year-over-year, reflecting a challenging selling environment, with GBS new business down 5% year-over-year.
- The US federal government business continues to be a drag, with CV of only $125 million and negative impact on overall growth, though it returned to positive net contract value in Q2.
- Consulting revenue declined to $142 million from $156 million in the prior year, though bookings and backlog improved.
- The company faces uncertainty from AI-related reprioritization of client budgets, which could impact spending on Gartner's services, though it also drives demand for AI insights.
- FX headwinds from a stronger US dollar are negatively impacting reported revenue and EBITDA, requiring guidance adjustments.
Q & A Highlights
Q: Can you rank order the key drivers you expect to fuel CV growth acceleration and what you see as a reasonable medium-term target for CV growth?
A: CEO Gene Hall stated that the primary drivers are increased client engagement leading to higher retention, which in turn creates more opportunities for new business with existing clients, and an improved value proposition that makes it easier to sell to new clients. CFO Craig Safian added that lapping the US Federal business and its return to growth will provide a near-term mathematical lift. Safian declined to provide a specific medium-term CV growth target, reiterating that the company expects growth to continue reaccelerating through the low and mid-single digits.
Q: How have your thoughts evolved around the role of macro and AI impacting your business, and what drove the change in messaging?
A: CEO Gene Hall noted that the selling environment improved in Q2, with many factors being modestly better, particularly in the public sector. He clarified that AI is a significant positive driver for Gartner, as it is the single biggest topic of demand from clients, helping them navigate reprioritization rather than being a headwind.
Q: Are you still expecting the ex-federal government CV growth to accelerate to 4% plus by the end of this year?
A: CFO Craig Safian confirmed that the company expects overall CV growth to continue accelerating, with the ex-Fed business being a part of that reacceleration. He emphasized that the company does not need a radical shift in the macro environment to achieve this, but rather needs to continue executing on its transformation initiatives.
Q: Can you provide more detail on your takeaway from the midsized client base growing mid-single digits and what's different relative to large enterprise?
A: CEO Gene Hall explained that midsized enterprises have lower complexity, making it easier for them to achieve ROI on initiatives like AI. Large enterprises face more complex, global challenges. CFO Craig Safian added that downsell activity, a larger-company phenomenon, is stabilizing, and in-quarter retention rates improved across the entire portfolio, which are positive leading indicators.
Q: Can you help understand the new business numbers (GTS +2%, GBS -5%) and how that squares with commentary around increased engagement?
A: CFO Craig Safian explained that new business dollars typically build sequentially from Q1 to Q4, and both segments saw a nice progression from Q1 to Q2. He highlighted that sales pipelines are trending positively, and improved engagement and retention rates provide more "at-bats" to drive new business from existing clients, giving confidence in future growth.
Q: Can you provide more color on wallet retention and where downsell pressure is versus where you'd like it to be?
A: CFO Craig Safian stated that downsell activity is stabilizing rather than worsening. While client retention rates are at or near historical highs, a decision by a client to hold or reduce spend represents a missed upsell opportunity. He believes that improved engagement and BTI transformation will lead to stronger retention and more opportunities to grow existing client spend over time.
Q: How are you thinking about managing quota-bearing headcount in the context of reacceleration in the second half and into 2027?
A: CEO Gene Hall stated that Gartner will add sales headcount when productivity improves, noting there is currently a lot of underutilized capacity. CFO Craig Safian added that the company is actively managing its OpEx base to remain agile and deliver on profit expectations, but has plenty of capacity to significantly reaccelerate CV even at half or three-quarters of historical productivity levels.
Q: You mentioned clients are reprioritizing tech budgets. Is that largely towards LLMs, and are you seeing any impact on their willingness to spend with you?
A: CEO Gene Hall confirmed clients are shifting IT spending towards AI, but this does not negatively impact Gartner because its share of client IT budgets is very small. In fact, it drives demand as Gartner helps clients figure out how to reprioritize and get value from AI, making it the single biggest driver of demand.
Q: Can you talk about the OpEx efficiencies you're recognizing, given you raised the EBITDA outlook by $40 million on a revenue raise of only $5 million?
A: CFO Craig Safian attributed the efficiency to ongoing best practices in aligning in-quarter OpEx with revenue and ensuring the run rate aligns with CV expectations. He noted a lot of reprioritization is happening to double down on areas that drive short-term and long-term growth, while managing the cost base to deliver on profit and free cash flow targets.
Q: Are you contemplating a faster move to enterprise pricing or a consumption-based model, as other companies in the space have discussed?
A: CEO Gene Hall stated that Gartner targets the C-level and their direct reports, not the entire enterprise. Market research shows these clients prefer the current seat-based model because they don't need licenses for all 10,000 associates. CFO Craig Safian added that the average spend is about six licenses per enterprise, reinforcing that the focus is on the "top of the orchard," not enterprise-wide licensing.
Q: Can you talk about where you're seeing continued pressure, such as tariff-impacted industries, and the ex-Fed net contract value increase in the quarter?
A: CFO Craig Safian confirmed the ex-Fed net contract value increase was positive $4 million in the quarter. CEO Gene Hall noted that companies with tariffs imposed face tighter cost constraints, but Gartner is restructuring its business so its value proposition remains strong even in dislocated industries. Safian added that the overarching issue is global uncertainty, which the company is adapting to.
Q: On consulting, where are you seeing incremental demand driving the first backlog increase in over a year?
A: CFO Craig Safian attributed the improvement to better execution across the board and a laser focus on core anchor clients, rather than any single thematic trend. The team has been focused on delivering on existing backlog and converting pipeline into bookings, which resulted in a very strong Q2 bookings quarter and gives confidence in the full-year outlook.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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