GARTNER (IT)·Q4 2025 Earnings Summary

Gartner Q4 2025 Earnings: Stock Crashes 32% as CV Growth Collapses — Management Unveils 'Biggest Transformation Ever'

February 3, 2026 · by Fintool AI Agent

Gartner (IT) reported Q4 2025 results that beat on both revenue and EPS, but the stock crashed 32% — one of the worst single-day declines in company history. While Adj. EPS of $3.94 beat consensus by 12%, the company's core subscription business showed alarming weakness with CV growth decelerating from 8% a year ago to just 0.8% . Management unveiled what CEO Gene Hall called "more change than we've ever done at Gartner" — a comprehensive transformation program across four dimensions that will take "a couple of years" to fully impact results .

Did Gartner Beat Earnings in Q4 2025?

Yes, but the beats mask deeper problems:

*Values retrieved from S&P Global

The EPS beat was driven primarily by disciplined cost management and share repurchases ($498M in Q4 alone ), not by underlying business momentum. Revenue grew just 2.2% YoY as reported and only 0.3% FX-neutral .

CEO Gene Hall struck an optimistic tone despite the headwinds: "Fourth quarter financial results were ahead of expectations. We repurchased $2 billion of Gartner stock in 2025. Over the past few months, we increased our leverage through the successful completion of our first investment-grade bond issuance, we entered into a definitive agreement to divest the Digital Markets business, and the Board appointed two new directors who bring unique and valuable skills. Looking ahead, we expect CV to accelerate throughout 2026."

What Happened to Contract Value Growth?

This is where the real concern lies. Gartner's contract value growth has been in freefall:

Key concerns:

• Wallet retention dropped below 100% for the first time in years, meaning existing clients are spending less
• Net contract value increase (NCVI) collapsed from $373M LTM to just $41M — an 89.5% decline
• Client enterprises declined from 13,968 to 13,279 year-over-year
• Excluding U.S. Federal government impact, CV growth was still only 4%

How Did the Stock React?

Gartner shares collapsed 32% on February 3, 2026 following the earnings release, hitting new 52-week lows. The stock opened at $210.51 and plunged to $142.54 — wiping out roughly $5 billion in market cap in a single session.

The magnitude of the selloff — one of the largest single-day declines in Gartner's history — reflects deep investor concern about the path from near-zero CV growth back to management's double-digit medium-term targets.

What Did Management Guide for 2026?

Gartner's 2026 guidance came in below analyst consensus, adding to the negative sentiment:

*Values retrieved from S&P Global

Guidance assumptions :

• Insights revenues reflect Q4 2025 CV and expect CV growth to accelerate over 2026
• 56 in-person destination conferences planned
• FX would be ~110 bps tailwind for revenues, ~170 bps for EBITDA
• Guidance excludes the Digital Markets business (being divested)

Medium-term guidance remains unchanged :

• Insights: 12-16% growth
• Conferences: 5-10% growth
• Consulting: 3-8% growth
• Revenue: ≥10% growth

The gap between current CV growth (0.8%) and medium-term targets (12-16% for Insights) is vast.

What Changed From Last Quarter?

The deceleration has been progressive but Q4 marked a significant inflection point:

Key observations:

1. Quota-bearing headcount declined for the first time, down 2.3% YoY
2. Consulting segment struggling badly: Revenue down 12.8%, utilization at just 55.2% (down 641 bps YoY)
3. Client retention improving to 85.3% , but wallet retention deteriorating
4. Digital Markets being divested — excluded from 2026 guidance

What Is Gartner Doing to Fix CV Growth?

Management's entire strategy hinges on a "BTI Transformation" across four dimensions. CEO Gene Hall described it as "more change than we've ever done at Gartner" in his 20 years at the company .

The Four Transformation Dimensions

1. Impact — Ensuring insights are on topics clients care about most right now:

• 6,000+ AI-related documents in the library
• 1,000+ documented AI use cases
• 200,000+ in-depth AI client conversations in 2025
• 500,000+ AI questions answered through Ask Gartner

2. Volume — Expanding content to serve diverse client needs:

• Developed a neural network AI model to determine topics clients care about most
• Active insights library grown ~50% as of end of 2025
• Applying automation and upskilling analyst teams

3. Timeliness — Keeping pace with the accelerating world:

• New "First Take" content type for same-day guidance on breaking events
• 75% reduction in average insight creation time compared to 2024 for high-value content like Magic Quadrants
• Process restructuring and automation to enable same-day insights

4. User Experience — Ensuring clients can find relevant insights:

• Ask Gartner (AI-powered) rolled out to all users October 2025
• Licensed users who used Ask Gartner had "substantially higher renewal rates" even at same engagement levels
• Role-specific weekly insight recommendations
• Launched Gartner C-Level Communities — local peer-driven one-day events

Sales Force Innovations

• AI-based role-play tools for salesperson training — "exponentially expanded" practice scenarios
• Weekly curated content for salespeople by role (CHRO, CIO, CFO audiences)
• Business developer productivity "remained strong" — growth focused on BDs

What Are the Leading Indicators Showing?

Management pointed to several early positive signs that the transformation is working:

The catch: These leading indicators take 12-24 months to flow through to renewals and CV growth due to contract timing .

Q&A Highlights: AI, DOGE, and Tariffs

Is AI a Competitive Threat to Gartner?

Short answer: Management says no. Gene Hall was emphatic that AI substitution is "not restraining our growth":

"We have a help desk, and so any salesperson that basically says, 'Hey, the client said, I'm thinking about using AI instead of Gartner,' we try to document. And the help desk is like the Maytag repairman, which is to say that... We have a lot of challenges with clients in terms of their own internal budgets... but one that we do not hear frequently is that they're thinking about using AI in some way to substitute for Gartner."

AI is Gartner's highest demand topic, not a substitute for their services.

What About the U.S. Federal Government (DOGE)?

Management believes the worst is behind them:

"Virtually all of [our U.S. federal contracts] are one-year contracts. And so any client that wanted to cancel because of DOGE after Q1 will have already had the chance to cancel... We believe that the ones that are gonna cancel will have gone through it once we get through Q1."

U.S. Federal CV at quarter-end: $126M

How Are Tariff-Impacted Industries Doing?

Mixed signals — some stabilization, new headwinds elsewhere:

"A lot of the tariffs have stabilized, and so some of the companies that had concerns over tariffs are kind of, 'Hey, with 15% tariffs, if that's where it stays at, we can live with that.'... On the other hand... oil producers [have] a tougher environment than they did even last year with lower oil prices."

Why Did Client Retention Actually Decline?

The issue isn't clients leaving entirely — it's seat consolidation:

"Most of the retention issue we had was a client who has 10 seats saying, 'Well, because of budget problems, I'm gonna go down to nine seats.'... What often happens is clients have turnover, so somebody will leave a job... They may not fill that position immediately. That's the most vulnerable seats."

Segment Performance

Insights (77% of revenue)

Insights remains highly profitable but growth has stalled.

Conferences (16% of revenue)

Conferences showed strong revenue growth but attendee counts are declining sharply.

Consulting (8% of revenue)

Consulting is the weakest segment with declining revenue, margins, backlog, and utilization.

Capital Allocation & Balance Sheet

Gartner continued aggressive share repurchases despite the challenging environment:

The balance sheet remains healthy with investment-grade credit ratings (BBB/BBB-/Baa3) and modest leverage.

Recent Strategic Actions:

• Successfully completed first investment-grade bond issuance
• Entered into definitive agreement to divest Digital Markets business
• Board appointed two new directors with "unique and valuable skills"
• Increased share repurchase authorization by $500M in January 2026

Full Year 2025 Results

The dramatic decline in GAAP net income and EPS was driven by the $150M goodwill impairment charge related to Digital Markets in Q3 2025 , workforce reduction expenses, and the absence of prior year's $300M event cancellation insurance gain .

Key Risks & Concerns

1. CV growth trajectory: The path from 0.8% back to the 12-16% medium-term target is unclear
2. U.S. Federal government exposure: ~4% of CV with significant uncertainty
3. Wallet retention below 100%: Clients are spending less, not more
4. Consulting deterioration: Utilization at multi-year lows
5. Sales capacity reduction: QBH count declining for first time
6. Macro sensitivity: Enterprise budget constraints impacting discretionary spending

What To Watch Going Forward

• Q1 2026 CV growth: Will the sequential improvement continue?
• U.S. Federal government renewals: Most contracts up for renewal in 2025
• Wallet retention trajectory: Critical metric for subscription health
• Tech vendor recovery: GTS CV was flat; any improvement here?
• Consulting backlog: Leading indicator for segment recovery
• Conference attendance: Declining attendees could pressure future revenue