Gartner (IT) 8-K Gartner Reports Financial Results for First Quarter 2009

Exhibit 99.1

Press Release

CONTACT:
Henry A. Diamond
Group Vice President
Investor Relations and Corporate Finance
+1 203 316 3399
henry.diamond@gartner.com

Gartner Reports Financial Results for First Quarter 2009

EPS from Continuing Operations Increased 50% to $0.21

Company Raised the Low-End of Its 2009 Guidance for
EPS from Continuing Operations and Normalized EBITDA

STAMFORD, Conn., May 8, 2009 — Gartner, Inc. (NYSE: IT), the leading provider of research and analysis on the global information technology industry, today reported results for first quarter 2009. In addition, the Company raised the low-end of its guidance for EPS from continuing operations and Normalized EBITDA and reiterated its guidance for revenue and cash flow from operations for full year 2009.

EPS from continuing operations increased 50% to $0.21, net income decreased 7% to $20.0 million, and Normalized EBITDA increased 20% to $48.3 million. See “Non-GAAP Financial Measures” for a discussion of Normalized EBITDA. Net income for first quarter 2008 included a $7.0 million benefit related to the results and gain on sale of the Company’s former Vision Events business.

Contract value, a key leading indicator for Gartner’s Research segment, was $760.7 million at March 31, 2009. Excluding the impact of foreign exchange, contract value increased 2% year-over year.

Total revenue for first quarter 2009 was $273.5 million. Excluding the impact of foreign exchange, total revenue increased 1% year-over-year driven by growth in the Company’s Research business.

Gene Hall, Gartner’s chief executive officer, commented, “During first quarter 2009, we continued to grow our Research revenue year-over-year excluding the impact of foreign exchange. This growth, coupled with tight cost controls, generated significantly increased earnings and higher cash flow despite the challenging global economic environment.”

Hall further commented, “With our vast untapped market opportunity, premier brand and services that provide great value to our clients, I remain confident in our prospects for long-term double digit revenue and earnings growth, once global economic activity returns to more normal levels.”

Business Segment Highlights

Research

Revenue for first quarter 2009 was $187.7 million, up 4% year-over-year excluding the impact of foreign exchange. Gross contribution margin improved approximately 3 percentage points year-over-year to 66%.

Contract value, a key leading indicator for Gartner’s Research segment, was $760.7 million at March 31, 2009. Excluding the impact of foreign exchange, contract value increased 2% year-over year.

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Client and wallet retention rates for first quarter 2009 were 80% and 90%, respectively, versus 82% and 97%, respectively, for first quarter 2008. Wallet retention for both periods is now reported excluding the impact of foreign exchange.

In first quarter 2009, the Company eliminated the “Other” revenue line. “Other” revenue and related expenses are now included in the Research segment. In addition, certain expenses that were formerly classified as selling, general & administrative expenses are now presented in cost of services and product development and are included in the Research segment. Corresponding prior period presentations of these revenues and expenses have been reclassified for comparability purposes.

Consulting

Revenue for first quarter 2009 was $70.3 million, down 4% year-over-year excluding the impact of foreign exchange. Gross contribution margin was 38%.

First quarter 2009 utilization was 72% and billable headcount was 470, both unchanged from first quarter 2008. Backlog was $86.7 million at March 31, 2009.

Events

Revenue for first quarter 2009 was $15.5 million, down 18% year-over-year excluding the impact of foreign exchange. Gross contribution margin was 31%.

During first quarter 2009, the Company held 12 events with 2,858 attendees.

Cash Flow and Balance Sheet Highlights

Gartner generated cash from operations of $14.8 million during first quarter 2009, up 4% year-over-year. Capital expenditures were $4.5 million during first quarter 2009 versus $7.5 million in first quarter 2008.

The Company deployed its cash principally to repay debt. As of March 31, 2009, the Company had total debt of $338.0 million and cash of $70.3 million.

Financial Outlook for 2009

Based on its first quarter 2009 results and current business trends, Gartner raised the low-end of its guidance for EPS from continuing operations and Normalized EBITDA and reiterated its guidance for revenue and cash flow from operations for full year 2009. The Company’s 2009 outlook for revenue by segment and total revenue is as follows. The year-over-year change is presented both as reported and excluding the impact of foreign exchange (FX Neutral):

($in millions)	2009 Projected Revenue			% Change as Reported		% Change FX Neutral
Research (1)		$	737 – 757		(6%) – (3%)		(2%) – 1%
Consulting			265 – 295		(24%) – (15%)		(21%) – (12%)
Events			98 – 108		(35%) – (28%)		(33%) – (26%)
Total Revenue		$	1,100 – 1,160		(14%) – (9%)		(10%) – (6%)

(1) Projected research revenue includes the revenue of the Company’s “Other” category. For 2008, reported “Other” revenue was $8.3 million.

The Company now targets Normalized EBITDA for full year 2009 of $170 to $200 million and EPS from continuing operations of $0.66 to $0.87, and continues to target cash flow from operations of $100 to $125

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million and capital expenditures of $15 to $20 million. Normalized EBITDA excludes a projected $26 to $28 million of pre-tax expense related to SFAS 123(R).

Conference Call Information

Gartner has scheduled a conference call at 10:00 a.m. ET today, Friday, May 8, 2009, to discuss the Company’s financial results. The conference call will be available via the Internet by accessing the Company’s web site at http://investor.gartner.com. A replay of the webcast will be available for 90 days following the call.

About Gartner

Gartner, Inc. (NYSE: IT) is the world’s leading information technology research and advisory company. We deliver the technology-related insight necessary for our clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, we are the indispensable partner to 60,000 clients in 10,000 distinct organizations. Through the resources of Gartner Research, Gartner Executive Programs, Gartner Consulting and Gartner Events, we work with every client to research, analyze and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, U.S.A., and has 4,100 associates, including 1,200 research analysts and consultants, and clients in 80 countries. For more information, visit www.gartner.com.

Non-GAAP Financial Measures

Investors are cautioned that normalized EBITDA contained in this press release is not a financial measure under generally accepted accounting principles. In addition, it should not be construed as an alternative to any other measures of performance determined in accordance with generally accepted accounting principles. This non-GAAP financial measure is provided to enhance the user’s overall understanding of the Company’s current financial performance and the Company’s prospects for the future. We believe normalized EBITDA is an important measure of our recurring operations as it excludes items that may not be indicative of our core operating results. Normalized EBITDA is based on operating income, excluding depreciation, accretion on obligations related to excess facilities, amortization, SFAS 123 (R) expense, and Other charges.

Safe Harbor Statement

Statements contained in this press release regarding the growth and prospects of the business, the Company’s projected 2009 financial results and all other statements in this release other than recitation of historical facts are forward-looking statements (as defined in the Private Securities Litigation Reform Act of 1995). Such forward-looking statements include risks and uncertainties; consequently, actual results may differ materially from those expressed or implied thereby. Factors that could cause actual results to differ materially include, but are not limited to ability to expand or even retain the Company’s customer base; ability to grow or even sustain revenue from individual customers; ability to attract and retain professional staff of research analysts and consultants upon whom the Company is dependent; ability to achieve and effectively manage growth; ability to pay the Company’s debt obligations; ability to achieve continued

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customer renewals and achieve new contract value, backlog and deferred revenue growth in light of competitive pressures; ability to carry out the Company’s strategic initiatives and manage associated costs; substantial competition from existing competitors and potential new competitors; additional risks associated with international operations including foreign currency fluctuations; the impact of restructuring and other charges on the Company’s businesses and operations; general economic conditions; and other risks listed from time to time in the Company’s reports filed with the Securities and Exchange Commission. These filings can be found on Gartner’s Web site at www.gartner.com/investors and the SEC’s Web site at www.sec.gov. Forward-looking statements included herein speak only as of the date hereof and the Company disclaims any obligation to revise or update such statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events or circumstances.

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GARTNER, INC.
Condensed Consolidated Statements of Operations
(Unaudited; in thousands, except per share amounts)

	Three Months Ended
	March 31,
	2009			2008
Revenues:
Research (a)	$	187,688		$	191,407		-2	%
Consulting		70,319			78,118		-10	%
Events		15,526			20,574		-25	%
Total revenues		273,533			290,099		-6	%
Costs and expenses:
Cost of services and product development (a)		116,644			130,600		-11	%
Selling, general and administrative (a)		115,564			126,246		-8	%
Depreciation		6,475			6,509		-1	%
Amortization of intangibles		399			414		-4	%
Total costs and expenses		239,082			263,769		-9	%
Operating income		34,451			26,330		31	%
Interest expense, net		(4,180	)		(4,715	)	11	%
Other (expense) income, net		(1,246	)		523		>100	%
Income before income taxes		29,025			22,138		31	%
Provision for income taxes		9,029			7,545		20	%
Income from continuing operations		19,996			14,593		37	%
Income from discontinued operations, net of taxes (b)		—			6,951		-100	%
Net income	$	19,996		$	21,544		-7	%
Income per common share:
Basic:
Income from continuing operations	$	0.21		$	0.15		40	%
Income from discontinued operations		—			0.07		-100	%
Income per share	$	0.21		$	0.22		-5	%
Diluted:
Income from continuing operations	$	0.21		$	0.14		50	%
Income from discontinued operations		—			0.07		-100	%
Income per share	$	0.21		$	0.21		0	%
Weighted average shares outstanding:
Basic		93,898			97,790		-4	%
Diluted		95,763			101,363		-6	%

(a)	In the first quarter of 2009, the Company eliminated the “Other” revenue line. “Other” revenue and related expenses are now being reported in the Research segment. In addition, certain expenses that were formerly classified as Selling, general and administrative (SG&A) are now presented in Cost of services and product development (COS) and are considered to be expenses of the Research segment.
	Corresponding prior period presentations of these revenues and expenses have been reclassified for comparability purposes.
(b)	2008 includes the results and gain on sale of the Vision Events business, which we sold in February 2008.

BUSINESS SEGMENT DATA (a)
(Dollars in thousands)

			Direct		Gross		Contribution
	Revenue		Expense		Contribution		Margin
Three Months Ended 3/31/09
Research (a)	$	187,688	$	62,957	$	124,731		66	%
Consulting		70,319		43,299		27,020		38	%
Events		15,526		10,743		4,783		31	%
TOTAL	$	273,533	$	116,999	$	156,534		57	%
Three Months Ended 3/31/08
Research (a)	$	191,407	$	69,963	$	121,444		63	%
Consulting		78,118		46,781		31,337		40	%
Events (b)		20,574		11,595		8,979		44	%
TOTAL	$	290,099	$	128,339	$	161,760		56	%

(a)	In the first quarter of 2009, the Company eliminated the “Other” revenue line. “Other” revenue and related expenses are now being reported in the Research segment. In addition, certain expenses that were formerly classified as Selling, general and administrative (SG&A) are now presented in Cost of services and product development (COS) and are considered to be expenses of the Research segment.
	Corresponding prior period presentations of these revenues and expenses have been reclassified for comparability purposes.
(b)	Excludes the results of the Vision Events business, which we sold in February 2008.

SELECTED STATISTICAL DATA

	March 31,			March 31,
	2009			2008
Research contract value	$	760,704	(a)	$	778,405	(a)
Research client retention		80	%		82	%
Research wallet retention (b)		90	%		97	%
Research client organizations		10,195			10,153
Consulting backlog	$	86,657	(a)	$	116,829	(a)
Consulting—quarterly utilization		72	%		72	%
Consulting billable headcount		470			470
Consulting—average annualized revenue per billable headcount	$	410	(a)	$	460	(a)
Events—number of events for the quarter (c)		12			12
Events—attendees for the quarter (c)		2,858			5,256

(a)	Dollars in thousands.
(b)	Excludes the impact of foreign exchange.
(c)	Excludes the results of the Vision Events business, which we sold in February 2008.

SUPPLEMENTAL INFORMATION
GAAP to Normalized EBITDA Reconciliation
(in thousands)

Reconciliation — GAAP to Normalized EBITDA (1):

	Three Months Ended
	March 31,
	2009		2008
Net income	$	19,996	$	21,544
Interest expense, net		4,180		4,715
Other expense (income), net		1,246		(523	)
Income from discontinued operations (2)		—		(6,951	)
Tax provision		9,029		7,545
Operating income	$	34,451	$	26,330
Normalizing adjustments:
Depreciation, accretion, and amortization		7,072		7,177
SFAS No. 123(R) stock compensation expense (3)		6,792		6,632
Normalized EBITDA	$	48,315	$	40,139

(1)	Normalized EBITDA is based on operating income excluding depreciation, accretion on obligations related to excess facilities, amortization of intangibles, Other charges, and SFAS No. 123(R) expense.
(2)	2008 includes the results and gain on sale of the Vision Events business, which we sold in February 2008.
(3)	Stock compensation expense represents the cost of stock-based compensation awarded by the Company to its employees under Statement of Financial Accounting Standards No. 123(R), “Share-Based Payments” (“SFAS No. 123(R)”).