GARTNER INC (IT) Q2 2025 Earnings Summary

Executive Summary

Q2 delivered modest beats vs. S&P Global consensus: revenue $1.686B vs $1.674B (+0.7%) and adjusted EPS $3.53 vs $3.31 (+6.6%). Management cited stronger-than-expected revenue, EBITDA, EPS and FCF; GAAP diluted EPS was $3.11 . Consensus figures marked with * (S&P Global).*
FY25 outlook mixed: total revenue and adj. EBITDA were lowered (to ≥$6.455B and ≥$1.515B), while adj. EPS was raised to ≥$11.75; free cash flow unchanged at ≥$1.145B. Share count reduced to ~77M given stepped-up buybacks, with $700M authorization added in July .
Headwinds intensified: U.S. government (DOGE) procurement changes and tariff uncertainty lengthened sales cycles, escalating approvals to CFO/CEO, pressuring Insights (Research) new business and retention trends through 2H25 .
Offsets/catalysts: broad-based execution, strong Conferences growth (+13.6% YoY), resilient Consulting (+8.8% YoY), continued AI product innovation with AskGartner rollout, and disciplined cost/repurchase strategy underpinning EPS resilience despite softer revenue trajectory .

What Went Well and What Went Wrong

What Went Well
- Execution ahead of expectations: “Second quarter Revenue, Adjusted EBITDA, Adjusted EPS, and Free Cash Flow were ahead of expectations.” — Gene Hall, CEO .
- Conferences momentum: Conferences revenue $211M (+13.6% reported; +12.0% FXN), contribution margin 57.4% .
- Shareholder returns and AI rollout: Repurchased $274M in Q2; board added $700M to authorization in July; began rolling out AskGartner to enhance client access to insights .
What Went Wrong
- Macro/government headwinds: Initiatives from the Department of Government Efficiency (DOGE) complicated public-sector purchasing/renewals; tariff concerns pushed more decisions to CFO/CEO level and slowed cycles in impacted industries .
- Research/Insights pressure: FY25 Insights revenue guidance reduced by $100M (partially offset by +$20M FX tailwind) on weaker Q2 trends in new business/retention and continued pressure in non-subscription traffic/pricing .
- Wallet retention softened sequentially (Global Sales wallet retention 101.3% vs 103.0% in Q1) and sequential NCVI remained negative (-17 vs -63 in Q1), reflecting elongated sales cycles and federal/government adjustments .

Financial Results

Overall performance vs prior year/quarter and vs estimates (S&P Global):

Metric	Q4 2024	Q1 2025	Q2 2025 Actual	Q2 2025 Consensus*
Revenue ($USD Millions)	1,715	1,534	1,686.5	1,674.13*
GAAP Diluted EPS ($)	5.11	2.71	3.11	—
Adjusted EPS ($)	5.45	2.98	3.53	3.31*
Adjusted EBITDA ($USD Millions)	417	385	443	—
Adjusted EBITDA Margin (%)	24.3	25.1	26.3	—
Operating Cash Flow ($USD Millions)	335.4	313.5	383.6	—
Free Cash Flow ($USD Millions)	311.4	287.9	347.4	—

Note: Consensus estimates marked with * are from S&P Global Market Intelligence (values retrieved via S&P Global).*

Segment performance and margins:

Segment	Q2 2024 Revenue ($M)	Q1 2025 Revenue ($M)	Q2 2025 Revenue ($M)	Q2 2024 Margin	Q1 2025 Margin	Q2 2025 Margin
Insights (Research)	1,266.0	1,322	1,319.5	73.7%	74.5%	73.9%
Conferences	186.1	73	211.4	58.1%	37.7%	57.4%
Consulting	143.0	140	155.6	37.6%	38.2%	39.6%

Non-GAAP reconciliation drivers (Q2 2025): Adjusted EPS $3.53 excludes ~$0.26 amortization of acquired intangibles, ~$0.29 acquisition/integration and other non-recurring items, ~$0.01 lease impairment, with a tax impact of -$0.14 .

Key KPIs

KPI	Q1 2025	Q2 2025
Total Contract Value (Global Sales) ($B @’25 rates)	5.051	5.034
GTS CV ($B) / YoY FXN	3.853 / +5.5%	3.822 / +3.6%
GBS CV ($B) / YoY FXN	1.198 / +10.8%	1.212 / +9.2%
Global Wallet Retention	103.0%	101.3%
Quarterly NCVI ($M)	-63	-17

Guidance Changes

Metric	Period	Previous Guidance (May 6)	FX Impact	Business Update	Current Guidance (Aug 5)	Change
Insights Revenue ($M)	FY 2025	5,335	+20	-100	5,255	Lowered
Conferences Revenue ($M)	FY 2025	625	0	0	625	Maintained
Consulting Revenue ($M)	FY 2025	575	0	0	575	Maintained
Total Revenue ($M)	FY 2025	6,535	+20	-100	6,455	Lowered
Adj. EBITDA ($M)	FY 2025	1,535	+5	-25	1,515	Lowered
Adj. EPS ($)	FY 2025	11.70	+0.05	0.00	11.75	Raised
Free Cash Flow ($M)	FY 2025	1,145	0	0	1,145	Maintained
Diluted Shares (M)	FY 2025	~78	na	na	~77	Lowered (buybacks)

Management also highlighted at least 53 in-person destination conferences and agile cost management; FX at July rates would be a ~95 bps tailwind to revenue and ~190 bps to adj. EBITDA .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’24, Q1’25)	Current Period (Q2’25)	Trend
AI initiatives	Internal AI use; preparing client-facing chat; expertise advising end-users and tech vendors	Began rollout of AskGartner to clients, improving access to proprietary insights	Advancing commercialization
Macro/tariffs	Lengthening cycles; tariffs created uncertainty; Canada soft; China challenging; federal impact flagged	DOGE policy changes and tariff uncertainty escalated approvals to CFO/CEO, elongating cycles at record pace	Headwinds worse in Q2
U.S. Federal/Public sector	Concentrated renewals in 2025; cautious guide; ~50% dollar retention on Q1 federal renewals	Continued pressure; procurement changes (DOGE) complicated purchases/renewals	Persistent headwind
Conferences	Strong plan/visibility; Q1 benefited from moved events	Q2 revenue +13.6% YoY; high margins; 19 destination events, 28,295 attendees	Positive momentum
Sales capacity/costs	Mid-single-digit QBH growth ex-federal; expense agility; buybacks opportunistic	Expense agility reiterated; shares down to ~77M via buybacks; authorization +$700M	Supporting EPS despite softer revenue

Management Commentary

“Second quarter Revenue, Adjusted EBITDA, Adjusted EPS, and Free Cash Flow were ahead of expectations. Contract value grew 5%.” — Gene Hall, CEO .
“Initiatives from the Department of Government Efficiency… made it more challenging for clients to purchase or renew… With the prospect of higher tariffs… purchase decisions that were previously made by functional leaders are now being escalated to the CFO or even the CEO.” — Management on macro/government impacts .
“Adjusted EPS in Q2 was $3.53, up 10%… We had 77 million shares outstanding in the second quarter… Operating cash flow… $384 million, up 4%… CapEx was $36 million.” — CFO .
“Began the rollout of AskGartner, our new AI-powered tool that gives clients an improved user experience…” — Company press release .

Q&A Highlights

Sales cycle escalation: “Normally, a Chief HR Officer or a CIO can make… That got escalated to the CFO or even the CEO… tariff‑impacted industries… worried tariffs are going to lower their profitability.” — CEO on Q2 dynamics .
Expense/capital allocation discipline: CFO emphasized expense agility and continued buybacks, with ~77M diluted shares and increased authorization, while maintaining ≥$1.145B FCF guide .
Federal/Government: Management reiterated the procurement changes under DOGE complicated renewals; focus remains on value delivery and positioning for re-acceleration when conditions normalize .

Estimates Context

Q2 beats: Revenue $1,686.5M vs $1,674.13M consensus (+$12.4M, +0.7%); Adjusted EPS $3.53 vs $3.31 consensus (+$0.22, +6.6%). Consensus from S&P Global; actuals per company filings . Values marked with * are from S&P Global Market Intelligence (retrieved via S&P Global).*
Outlook implications: Street likely to trim FY25 revenue/EBITDA on lowered top-line/EBITDA guidance (≥$6.455B/≥$1.515B), but raise FY25 EPS slightly (≥$11.75) on lower share count and expense agility; FCF outlook unchanged (≥$1.145B) .

Key Takeaways for Investors

Mixed print but resilient P&L: Modest top- and bottom-line beats with strong Q2 margin execution (26.3% adj. EBITDA margin) despite pronounced macro/government headwinds .
Guidance de-risked on revenue, but EPS protected: FY25 revenue/EBITDA lowered while EPS raised and FCF maintained, aided by cost control and buybacks (shares ~77M; +$700M authorization) .
Macro watch items: DOGE/federal procurement and tariff uncertainty are the primary near-term overhangs elongating sales cycles; monitor sequential wallet retention/NCVI and Insights new business through 2H25 .
Offsetting drivers: Conferences momentum, Consulting growth, and AI-enabled client experience (AskGartner) support engagement and monetization in core franchises .
Tactical positioning: Near term, the narrative skews to “EPS resilience vs revenue softness”; into a more stable macro, Gartner’s sales capacity and historical CV flywheel argue for re-acceleration potential.
Focus KPIs next quarter: Insights subscription growth vs non-subscription drag, wallet retention trajectory, GTS vs GBS CV growth differentials, and progress of AskGartner adoption .

Additional Detail (for reference)

Consolidated results and segment details including reconciliations and GAAP financials are in Exhibit 99.1 and Q2 earnings slides .

Notes:

Company press release and 8-K (Item 2.02) for Q2 2025 results include detailed segment revenue, margins, and non-GAAP reconciliations .
Q2 earnings slides contain consolidated/segment summaries, guidance bridges, CV/retention metrics, and LTM FCF conversion .
Earnings call transcript excerpts sourced from Gartner IR-hosted S&P Global transcript PDF .

Estimated/Consensus data disclaimer: Values marked with * are retrieved from S&P Global Market Intelligence via GetEstimates.