IT - Earnings call transcript Q1 2021

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Operator

Ladies and gentlemen, thank you for standing by and welcome to Gartner’s First Quarter 2021 Earnings Conference Call. [Operator Instructions] I would now like to hand the conference over to your host today, David Cohen, GVP of Investor elations. Please go ahead.

David Cohen

Good morning, everyone. We appreciate you joining us today for Gartner’s first quarter 2021 earnings call and hope you are well. call Safian, Gene Chief the Officer Chief on Craig and Financial me today Hall, are Executive With Officer. as updated This of call both for posted Gartner’s website, earnings first discussion today’s XXXX outlook quarter XXXX on release will financial results supplement, include and disclosed in a investor.gartner.com. earnings our and

Gene to we questions. will by that you one ask We a limit up the comments Following questions open and Craig, your and follow-up. your call for

EBITDA rates unless are adjustments unless call, On of comments all stated we are gartner.com for with our references to non-GAAP are Reconciliations adjusted otherwise, the section use for the website. the available as earnings all EBITDA, release. in FX-neutral in the described in otherwise. Relations numbers All stated growth Gene’s Investor

values rates otherwise. stated are all we rates foreign and XXXX Finally, growth discuss exchange associated on based unless contract

call on set forward-looking statements. more statements As in forth made in today’s certain may constitute release, earnings this detail

subject results all Form XX-K documents. SEC. Forward-looking statements in review other well on in XXXX report can reports are those annual these including risk and encourage in to the the vary number actual filings listed as company’s contained and I materially and risks uncertainties, with of of Form to you as XX-Q on from the quarterly a factors

will turn Executive Chief Hall. I Now, Gene the call Gartner’s over Officer, to

Gene Hall

our conferences, delivered most exceeding across us. X%, business for expectations. results flow. joining profitable and research, quarter accelerated We up revenues cash in XXXX. and performance is and our were of thanks with Gartner segment. and morning Good consulting, our Research value, strong Total revenue, free segments, largest first of each contract EBITDA the

across major in within leaders executives or sectors, their the teams all GTS, Sales, IT. across industry enterprise opportunity serves sizes a has research segment around and vast geographies. and Technology their market Our Global functions serves world. Research and every all teams

grew For contract X%. value QX, GTS

logos to volumes XX% saw across and tech clients. up to enterprises. QX of with interaction We as to engagement several up-sell compared continued strong, was a new be and up existing Client XX% result midsized performances regions and analyst business industries, including new quarter strong First XXXX. with and content

to We chain, of double-digit to of continue Sales, serves legal in finance, leaders or sales, return double-digit accelerate value XXXX and its growth GBS Global in value the contract expect growth. growth to marketing, growth includes and This beyond achieved contract first teams Business supply HR, GTS future. quarter and more. GBS, IT. XX%, their

efforts. the our All exception of of entire New our business proven seeing we rates contract growth in quarter. quarterly positive QX XX% practiced practices results relentless are the business, of research practices, marketing, practices with with was double-digit the and Across ended a NCVI. we strong very growth all delivered and execution value

double-digit over Our research business to return is sustained medium-term. the well-positioned growth to

Turning conferences pivoted as in-person know, virtual. of from to conferences, many destination business you during XXXX, to our conferences

engaged for Our We the value extraordinarily conferences. conferences proposition virtual qualified valuable same in-person audience. as an insights to for remains and deliver

business small conferences, our is quarter a QX the expectations. While for exceeded

is return Gartner through initiatives most of to the extended conferences prepare to XXXX. conferences, second work. deeper to virtual Beyond in-person project-based half their strategic an and continue Research of Consulting execute clients we in helps Gartner extension

expectations, our segment with Our XX% Consulting also exceeded QX. up during bookings

complement will as research to business our important an to serve Consulting Our IT continue business.

for is up objectives million, was cash Free flow quarter significantly strong year. our to the One cash versus prior the $XXX of flow. generate

stock $XXX In million to purchase that addition, in more cash than this cash used plus year. of April flow through balances we

details world. to a Responsibility launched continue you thrive quarter QX the to be was positive communities and future. a associates, take to Summarizing, The with With sustainable our I million. in found to social and in today report encourage Report. look. report our XXXX clients the made strong segments these on increased share we our a and our change can all gartner.com $XXX The and repurchases, business by board more expectations. authorization progress our accelerating contributing recently exceeding three another Corporate repurchase We We want

we ahead, are for Looking sustained well-positioned success.

We have addressable achieve vast and to which and will value allow a us the years beyond. revenue next double-digit growth over market, contract X

a to share excess And expansion with We and going modest expect that, of strategic repurchases flow we free tuck-in the in will net over Craig? deliver XXXX. continue to We Craig. to income, EBITDA normalized call cash deploy margin through forward significant generate which acquisitions. I hand from will

Craig Safian

and safe Gene good remains Thank hope morning. and well. everyone I you,

results with quarter the above the were we advantage our take environment. lower than well strong to was well-positioned expenses, Revenue business. outstanding planned the Despite across First very are momentum of demand good expectations.

will meaningful have normalized a than spending and results margin non-subscription contract our expected which in we XXXX reflects value, to than outlook, the and first revenue to visibility guidance. We outlook continue consulting long-term With in stronger drive double-digit are increase we growth. The increased support following our increasing improved restore results expected growth sustained stronger to and the research quarter.

$X.X First FX-neutral. up and X% quarter as year-over-year reported X% revenue billion, was

in million, In total contribution up XX% quarter. cash basis million. free flow and in EPS throughout reported prior the up X% the was Adjusted was saw XX% EBITDA Research new the business than addition, revenue we XXX and year. as and the was and retention grew points was margin basis more quarter FX-neutral. year-over-year strong year-over-year up an XX%, first $XXX versus on X% quarter $X $XXX and FX-neutral

margins XXXX. avoidance XXX effectiveness travel and expenses. basis research the up versus Higher quarter operational First contribution of margin XX%, improved was contribution reflect both about points

margin we improvement reverse reopens will increase the levels compared to historical temporary and as the world to growth. and of is Some support spending

year. margin marketing prior NCVI, is pandemic was of though metric. a of contract million seeing seasonality mix value up The fourth first in $XX margin Quarterly there the billion, products, yet to Technology better and X% lower are is measure quarter, the increase, We to grew back higher to to year. selling end neutral value contract scale this environment NCVI way Total the increased $X including GTS contract the benefit first notable FX value from than from a discontinuation the a or X% versus helpful last performance shift certain fully products. $X.X isn’t at from in quarter quarter. but to value continued first million XX. retention the at was March Sales CV even contract quarter the Quarterly billion in improve $XX significantly the quarter, while net affected normal. Global increased

with XX% to group our healthcare growth in to XX% quarter, return coming experience CV was with expect contribute about was expansion saw logos GTS XXXX was existing quarter. clients to for we basis while consistent year-over-year. strength up-sell for out clients. forward, downturn. the of Moving versus services, win improve retention led last improvement year up down and in backs new industry from and fourth technology, the new with a existing GTS industry, a majority last growth by XXX and points an retention By more of our Sequentially, business in with the

technology growth with led was performance which All from GBS. was of double-digit strongest earnings $XXX supplement. quarter, year-over-year. Our metrics by fourth quarter. our GBS can value Business the in products. and increased practices found quarter contract CV up first Sales have Global CV million regular the end by of be exception from CV XX% was of $XX million first seen we industries. healthcare marketing, was impacted set the at the the the This recorded growth full discontinued

quarter. However, our marketing and practice return new saw improving in year-over-year to growth retention rates the a business

practices, marketing, CV in our showed increases of from the fourth including quarter. sequential All

retention last GBS for growth year year-over-year, was new across led than XXX% over full While up points up GBS XX% by very the XXX for the was portfolio. business more quarter, basis strong

Conferences reflected conferences found we with in our earnings quarter. in $XX Contribution GBS As revenue million. revenue of This metrics XX%. in our result of beyond the be $XX about a can the was was We set for We quarter full quarter the end had of held GTS, quarter. in as one-time million of the the XXXX entitlements, contract virtual supplement. X pandemic. extended margin the which regular

also number We meetings. a Avanta held of virtual

X% QX of FX-neutral an X% quarter. Backlog on to $XXX XX points Utilization at a On headcount revenues actions in an basis million, flat. was points about in XXX basis the revenues last Consulting basis. bookings year-over-year XXX last after Labor-based were X% versus and basis XX% margin million. versus XXX up quarter. First down prior and the $XX basis, quarter, up increased of was FX-neutral first revenues QX headcount QX on year-over-year year. by contribution X% up million, were FX-neutral quarter XX%, was to of Labor-based taken $XXX up consulting X% an year year-over-year. year was billable strong down March due

forward with backlog about coverage. revenue of Our us provides months X

quarter contract neutral. Our up year a X% on business and prior was optimization X% the basis FX reported versus

as As facilities, travel expenses the travel, as avoidance FX-neutral year-over-year first as during decreased the we entertainment first variable. X% Cost of quarter. have segment of past, year-over-year detailed this part declined in and services services to in is X% FX-neutral consulting the the cost Consolidated highly and due of lower well to and of conference-related as the declined X% cost lower quarter in the continuation continuation various X% quarter entertainment, initiatives. well. well avoidance of various SG&A cost the SG&A as decreased due initiatives. and costs

sales this our year, rebounds also improve. will productivity As CV traditional metrics

increasing priorities. drive consecutive a most the clients to critical should CV improving capacity several sales force, and of address retention ample to have more drive growth, client quarters we XXXX, sales strong help engagement our which For their tenured-than-usual insights

force Going past investing discussing forward, sales our this effectiveness productivity tools. we few in technology years, to upgrade cost addition are been we year of sales many the improve and to initiatives to have the

hiring strong later reported We team ramping by to still GTS of in anticipate FX-neutral. headcount the both and growth the up in our place $XXX up basis growth GBS the was CV to million, high We XXXX. year-over-year XX% sales first will have be a for up XX% drive single-digit EBITDA year quarter we end on force next and ensure the in year.

quarter was million for investments. million, was The the revenue XXX% $XXX in cost versus $XX EBITDA avoidance we Free for Free of up low $XX QX costs versus increase of the was by went XXXX. financing including quarter, the compared growth, of is quarter income, deferred of cash for last March was EBITDA our XXXX, the function was improved equity for rate $X Operating XX expense, Lower CapEx cash quarter. quarter. quarter the compensation in initiatives. down CapEx for Recall $X. for lower about prior net year. excluding flow the primarily quarter XX% quarter operating was estate The million, quarter. into was flow in was about estate $XXX in adjusted calculation million that was Adjusted was first largely last XX.X% which shares. and to year-over-year. versus cash quarter the real and XX.X% making driven four-quarter million used a flow QX first The XX.X needs was cash tax year. revenue which First to XX% quarter EPS and items in net flow to we flow as the million GAAP capital income million $XXX adjust our end improvement expense, interest margin for toward growth upfront cash was well the the fourth the rate, reflected Net years. of expectations the been million of first $X quarter incurred on since an shifted first first basis, of weighted continues of part year. the we quarter, with flow flat free of high-end of the the above used share quarter payments. over and costs past adjusted be million Free service fully adjusted which at Depreciation diluted we share have the in $XX income. tax flow expenditure excess a up of the of The Free At and XXXX, quarter client fully cash. for continuing the into the or cash both of XXXX. ending cash normally net rolling count have count modest million, XX.X model, software, average is business few The the a the was would about end which in shares. diluted percent real the important first collections had

of balance XX, end of quarter, the was billion. Our revolver had debt At first $X March billion the we $X capacity. about

from Our reduced about reported predominantly leverage comfortable the trailing We to XX-month X.Xx. gross debt debt has multiple our remain with very gross EBITDA multiple. The increased EBITDA. level current corresponding was and lower

cash remaining of to excess allocation strategic cash strategy our share generation the liquidity Our on and flow repurchases on ample cash balance expected and free tuck-in and M&A. capital sheet provide deliver

of stock authorization average for repurchased repurchased price million board our we per At this first stock. In repurchase the million. quarter, $XXX another more share. year, of $XXX of April, at in end we about of During million the the $XXX the increased time share second $XXX April, month adding the an our than

As for market have open of repurchases. $XXX April we million XX, available around

We authorization as to the refresh repurchased needed expect forward. the board continue will going

shares, As we continue as well. increasing base forward. also share to profits, going delivers we to This our over growing returns is and capital invested repurchase expect on to earnings time shrink accretive capital combined with per

increased year guidance for updating improved are QX of year. and the an and the full outlook remainder reflect We our to performance

to and to than in CV year contributing For non-subscription expected previously research, revenue. research the are the strong higher start performance revenue to improvements

conferences, Operationally, the are planning September. in-person Avanta based in for re-launch is still on guidance destination full quarter conferences and we For starting in meetings being virtual our to year. in-person the third

Our primarily guidance costs, related includes people both year fixed virtual a and partial conferences. year a full in-person to of of marketing and

If primarily variable both our costs, associated profitability for in-person from conferences, in-person we able guidance. to have expect incremental run XXXX. with are venue-related to and we excluded We upside the revenue our conferences

the revenues, quarter. started expected backlog better we and the during For first demand the consulting than year improved

in For which have annual or canceled expenses, our were benefits, This either increase, effect we includes April reinstated X. which deferred took merit XXXX.

by both the XXXX. of headcount plan also high GBS end GTS for in We and quota-bearing increase the single-digits to

Additionally, to or starting The of the in restorations these other programs. invest we expense investments in quarter. impacts most impact our continue several P&L of second

XXXX. close know, March zero travel you As expenses to were April from through XXXX

remain second modest continue travel-related to would If Most a for up expenses the current ramp year. the of we travel half built longer savings. the in see into is XXXX. place of Our have expense in ramp restrictions plans this course over we than assume assumed, of

research our least billion, For $X.XXX revenue now at of which least guidance, expect of at is growth revenue we X.X%.

$XXX is $XXX consolidated least of at of result growth year-over-year least FX is least The We growth of expect more foreign of of revenue XX%. the growth growth consolidated million, expect for at least at revenue of now least at an conferences million, which We at revenue X.X%. which consulting is outlook $X.X points. X.X%. current the an rates of FX benefit Based mix, billion, in includes XXX which is about year. exchange is on pronounced business half basis The and the first of benefit

growth running year restored run-rate thinking expected more This the momentum margins to we have reported growth about the business virtual-only. restore XX% seeing, XX%. planning reasonable as back of going margins are conferences and ongoing fully year through least the for which we costs hiring. based now With least XXXX we about at is is are forward and increase EBITDA XX.X% the billion, The of We $X move as half to full an of on provide of margins adjusted a the year. we resumed XX% spending at will expect in versus should

full We XXXX interest expense expect year to be million. adjusted net our $XXX

adjusted XX% an expect for XXXX. of now $X.XX. of adjusted rate We least tax expect around EPS XXXX at We

guidance are conference For before XXXX, our now XXXX included our any expect site. at flow insurance million. to free full details Investor related $XXX we the proceeds of Relations All cash year is cancellations. This least on of

at least million $XXX XXXX. QX Finally, we expect to deliver in EBITDA of of

expect We high tax quarter rate the second the XXs. in

and leverage, CV we of to growing sales over will at can G&A and upfront. deliver can over revenue With our of margin and of double-digit with margins CV XXXX in from needs We XX% around financial XX%. our normalized because expand XX% as gross EBITDA, level grow are With free to paying cash us clients a our growth we out Looking model XX% expectations time research line cost medium-term, expansion, growth, growth. as flow the the modestly least Capex benefits fast modest unchanged.

over shares business. time, to count year well. share had We as a with repurchase start lower the will momentum will the We strong across which the

our stronger to environment visibility. the We outlook have and demand reflect updated XXXX our for meaningfully enhanced

to are the certain as well the capital investing than returning the end expenses remain turn $XXX We operator We year that, will be and I to positioned April happy call million we recovers. to through our ensure committed over Operator? rebound to With excess to economy to more your the we worth stock take will shareholders. back questions. and of of restoring and repurchased this are

Operator

you. question Baird. Thank first the Instructions] Meuler Jeff comes Our line from [Operator of with

Your is open. line now

Jeff Meuler

thanks. Yes,

GBS because like is for and you all I so many is you GBS, the you richer understand further it I up to really much told metrics of Gene, the new this it skeptical. positive on for be been have at XX%? client guess So better been that opportunity different while on opportunity? anything obviously to you the sold But how and within have that instance, look a seats call the per say answer a there beyond could business verticals of how trying serve on just

Gene Hall

No. Jeff. Hi,

GBS quarters even been In untapped is So, going we GBS, you it’s untapped back. as has there market. – than accelerating is GBS huge in a growth if less you several the are market a look penetrated And said, in opportunity, over tremendous GTS, on that. what’s

it of And so, incredibly there market large the opportunity. is is first piece an

time. of that we force training that the lined introduced the kind The making Gartner historically it’s realize And the the second had getting introduced piece we to which sales of GxL set speed the we all to sure products, know sales the we to that force sell whole of resulted new we’ve a over has used us elements that fully of on of the improvements how understood all are of force, to in that like formula on get and talked and and both sell continue the kind implementing sales process of and our we way opportunity getting it all combination is part about to up the things up them, Gartner getting that and improve. products products

You in quarters, accelerating the earlier. pull as together, all GBS we each resulted about things those talked and that’s of

the a versions, Gartner subtle sort it’s this we have the of all incredibly the combination applying so to it’s opportunity. huge formula And of GBS market where applying

Jeff Meuler

it the remote QX a is sales sequentially do momentum think was environments down the was as apparatus that in was release those hiring And sales and need I’m year was the that not given Okay. seems business metrics. can said QX you like in that but I the be then the guess, kind you new with building to retention to help sales know maybe back to how guess, issue surprised get around force understand here end? I about for – and of headcount training of work much And planning, from sold there’s then I players Thanks. business. I spend functioning want new to us how was the the guessing CV you or that it an salespeople But and just are to you you up? office A retain? How headcount I actions,

Gene Hall

great attract to in remote Gartner. a office a as sellers in to have well environment So we as value proposition environment,

a And salespeople Gartner remotely have be way, selling we of – pandemic. actually to be. long many time, to deployed a probably is in before large place we had for We you be remote and by the field salespeople over field, even time, if the have the want are – our proportion continue the to

actually well used terms to the year, to headcount in we’re the Then GTS. And GBS growth of there. both productive. down at XXXX, sales for single-digit sales look for during look have of year high our to a remotely growth we were accelerate better. most for at the areas to territories capacity little could Craig both and said, to GTS, we that positions our than less We plenty in pandemic the working what we opportunity productive as sales did to of we’ve use the the going were thought bit GBS continue And go you our at end as if that looked And as so forward, expect the which growth and invest in continue our we accelerate headcount done productivity, and us XXXX with past. really we hiring

Craig Safian

our Gene, we one add recruiting I is thing things last or base are Jeff, organizations. is mindful very thing other And of other year not the to the – of into would selling capacity the cut

and turn those our ability we quickly. so, do on, did recruiting we’re capacity, that it to And to and ability And back we this on so single-digit relatively for to maintain turn have confident GBS growth get wanted we back year. it when to the really we in again, rates both believe high GTS

Jeff Meuler

Thank Helpful. you, both.

Operator

Thank you.

from Kaplan comes question Toni line Stanley. next of Morgan the with Our

line now open. is Your

Toni Kaplan

Thanks. guidance could to the a you an about the I I in could more, about the Thanks margin of your potential of force drivers ramp also sustainability being and slower you But very and bit maybe just little think delta about much. and lever about on dive strengths the higher-margin shift or side? year that know the into the how what you a the sales was the faster hoping talked drivers terms the the being between talked to about products for margin talk upside. there. talk travel be

Craig Safian

Toni. for morning, Good Sure. that. Thank

performance On And a strong the versus strong talked in very very EBITDA the across EBITDA performance. strong estimates, of resulting was of we under-spending top QX margins, board, line and exceptionally on as combination an was margins. super it margin and clearly, sort the earlier, strong our about,

the of year, we restored at avoiding begin want that for like will of expect because feel the we been back all – we out in. to to we least put the baseline have fully year. good restoring half begun XX% or a the over balance quarters the the several balance that have for expenses the And the we second in As for year, of look the XX% we margins that’s range last

in in areas double-digit aggressively our We force other different. to also to be able is to of will a look the key to are believe little is us moving adding going super P&L bit a number investing our and Obviously, forward, than we a The going to operating some pandemic. for areas business growth. important sales that fully growth be look little harvest it are you different they did that’s the lot margins, clearly, pandemic. margins, to normal a because around higher EBITDA bit structural Toni or alluded that we going of to are And that pre expectations were our And of pre changes than moving sustain forward.

those having travel And like lower things overall so expenses. are

we much We to have forward. and nearly as learned travel do pandemic we or do in run travel to much we through as going spend need the of our to – want that to travel terms don’t volume business but drive need

as last have replacing we that did of there. facility you as facilities lastly, as that overall practice. front which facilities, increase on the scale reallocate to One And helping as on that footprint ability margin give grow which our well. is margin with with we meaningfully on the I is of GTS practice, sales mention, always the and and you are well, clearly practices, GBS we’re need which in make are when margin the few focused similarly, higher-margin adding the the with we shouldn’t ago, reapportion to can we’re and is the facilities. them been the lots really we including we sure our and marketing as as expenses and have told think economic quarters we grow on team margin has profile I’ll added thing things to then well. people. products, we the discontinued would also to a Those is, several seeing low ones. way marketing and clearly of several – well, And benefiting products. big margin the in from just two side, the several means your our now other then within historically the helping example, I it happen point we what we We growing our and into we serve currently is gross happen seeing support overall we’re And certainly each we And and needed practices

Toni Kaplan

That’s might to upgrading Is the can take you And and that tools. what kind upgrade? prepared and benefits the just when see about benefits more a your modest technology just how during there? start expect remarks, or you a talk sales mentioned this we Thanks. we major helpful. of program long And should

Gene Hall

of necessarily salespeople them, toolings So Toni, even upgrade important billing And everyday. as productivity We’ve one force. things systems of that support though because the all you the to it’s our is the that many done productivity over like program fact, a the use on that of growing the sales, like focused provide know, systems, been sales in yes, – way internal specifically, we over not tools sales things that, the indirect last years impact sales time. in of we’ve of elements an couple

we use number business. throughout productivity of sales CRM over a put by addition as a believe And opportunities time. that, capabilities not be system well. design of that as of know are we process to will teams new more the as are In well there but that just other enhance as that in people our And system, we also service sales to help fact, effective system, implementing productivity, we in we the currently which sales

Toni Kaplan

Thanks a lot.

Operator

you. Thank

Our Bank America. next with of question Bisbee line the of comes Gary from

Your open. line is now

Gary Bisbee

about ask results. free terrific flow. and couple you Craig, flow let introduced one cash free in the me I morning guess Good guys. last cash margin. of this concept Hey, quarters a of

this be just it framing flow margin provided, cash you’ve been may previously? is commentary margin to EBITDA think the higher-normalized reasonable the free than Given better year you how that that somewhat beyond

Craig Safian

the is think and margin we think below points Good so about the morning, cash EBITDA way great margin. question. that Yes, about flow running Gary, the free I X

focus flow. the But with so sort outlook outlook, that. is of fuel EBITDA clearly, our an line And free for free and outlook our – with on moves EBITDA also the the things collections cash collections sure it’s the margin. conjunction cash And and driving is as strong that that making cash primary that that pacing flow margin well on our on efficiency, or our updated obviously, managing in growth the improved free CapEx strong focus flow are margin up

Gary Bisbee

couple question across GBS, to underlying then this improvement and much Certainly, And momentum? where of period was in of both the a of the attribute the strength was, sell to how new sort difficult time you on GTS would it underlying that catch-up a But you. regardless to it feels of a driving the what than great. Thank versus real of in from metric very catch-up had for business Okay, segments, the quarters obviously, just other just ago it just quarters technology, continued improving is side, now. momentum a catch-up sell? impact change just just a of tough couple to growth has quarters more number of like the on or dynamic pandemic you’ve

Gene Hall

it’s Gary, both. Yes, I question. think great actually And

in cycles think demand – cautious our left which to where demand. past in and company is but there of were – I clearly the our obviously some extended terms the pent-up pent-up people selling services, buy clients want some

certainly of we’re So I seeing think that. some

to point, every your a business. be they they to In business – digital figured need that out though, want be to that has addition, now

business. as clearly just well. Both every sales I sales the is getting and so the mentioned support better as business great, earlier, our products I’ve of in again, just execution, we been at GBS growth support supporting the I better, service great. And that’s aspect in new better also are And – particular, is think

think I so getting over we’re And better time.

a it’s those factors. combination So of

Gary Bisbee

Thank you.

Operator

you. Thank

comes Goldman question from of George Sachs. the with next Our Tong line

Your line is open. now

George Tong

perform CV year? morning. easier How especially do remainder GBS move the over get as growth the Good the expect GBS through Hi. we CV of you was comps XX% CV in year, considering to Thanks. quarter. the

Craig Safian

Good morning, it? to Gene, George. you Go do ahead, want take

Gene Hall

Craig. Go ahead, Go ahead.

Craig Safian

Okay, thanks.

So with quarters. were acceleration I comps with you with and last that that in the we’ve growth, think GBS the seen obviously, – And CV QX agree the easier. metric I’d QX over few an

still easy. year, in an We the with year-over-year a business contract are GBS business we last growth growth on I the number. I strength easy impressive business think with and the logging acceleration there. feel even do of GBS good wouldn’t compare we strength have half new pretty second new And of value say and are saw again, the in XX% lot about a where comps, really particularly is

first balance end at the strong. feel of is pipeline we good about the The quarter. where looks So the CV

sales we CV good feel teams, don’t all as We the specifically, future. about Our you know, guide George. on

we’re alluded really the major the we great. is QX, very And mention other number strength the to earlier practices. is the and feel we’ve about the what so thing is to of which And do QX all the good not Gene I’d provide and seen. both the to think but pacing we’re thing be to in or we business about And this see that growth, and in going its across well, great the marketing starting of GBS I nice real strength as is chip going

just not it’s driving practice growth. So the is that one

starting in to in and sales We’re seeing with really supply as in marketing growth well. strong in gain altitude in HR, legal, finance, chain,

feel GBS about do good we of the strength right business now. the So

George Tong

Got it. helpful. That’s

You second forward. XQ more XX% EBITDA to mentioned you’re a targeting margins base think which going about we under-spending expand of margins normalized of margins the in the half to XX% near-term, which that is say, in and in How the to should XQ? now going bit year, be

Craig Safian

of so investments a bit probably on based be also Yes, be us seeing from revenue will and higher than the higher just a little bit pacing we’re XQ, to than outlook the money will based margins what a it perspective, in normal, normal making the the putting little work. on

one growing And the of the balance that year. of as will the sales ramp is about, big And forces. happen we obviously, investments, in the so, over talked

it some that QX, And into roll in but then hit we of compounds as QX have sort will of so, QX. we and

sure. And we’re think, talking the about so, will I year, than be the that margins half level that of the for QX second normalized higher for

George Tong

Very helpful. you. Thank

Operator

Thank you.

line next comes of Nicholas William from with Our Blair. question the Andrew

is line Your now open.

Andrew Nicholas

Hi. Good morning.

pretty a market. receptive GBS, Given would seem end and both GTS the strength in it like certainly

considerations how I to quickly headcount on mentioned how growth But certainly keeping wondering aggressive businesses worth in hiring mind? sticking growth other can you any and in that’s a to with you Are further? Just you give any can there even front. single-digit did bodies not you small accelerating high thought know limitations that both add or be number. the in

Gene Hall

it’s Andrew, hi Yes, Gene. Great question.

force improving got a productivity. of So believe we capacity look terms at lot we’ve sales of today, in our we as our sales

complement make and want as we then capacity so to And that well capture sure we growth. that with

As growth. to position double-digit we now right for of target year single is said, terms well next year really our this in the high us in digits

that’s right of now. plan so our kind And

Andrew Nicholas

And then you. Got question. bigger-picture a it. maybe Thank

spend sales time you a the over most like learnings love between more training start kind hoping whatever otherwise in-person structure that or cost of hybrid already, to the year hear year might time into. be probably the transparency feel past from have now would business. the management spend of conference engagement, you what I top the two time terms what or think discussing optimal had don’t was there. to pandemic. that taking could in three you spent is, on of or the the of some kind you the and are are so you’re But running kind content of Obviously, force consider to mix for need just team Thanks. execution you maybe We not biggest things away on from it the

Gene Hall

when certainly year feel was last a how adage lot. I sense a in us it stronger, it about pandemic we it’s Yes, thought question. make applies to old Andrew, We’ve it tough the the for is tough. the that times about the There think, pretty you great hit about

in for the really second different like value second wave things And of things we whole year, largest kinds is tried that. And set remotely, of last we learnings. had the so, were of I some of the that has we things like innovative found guess, – quarter – formats in what in tried. adding were of that there beginning resulted innovations innovation – We a lot

that work great. didn’t stuff Some

that really forward. going Some to well, really, those continue stuff things – and we’re going worked

begs bunch well, conferences. is conferences that virtual we be when we is we different circumstances. Well, is of will to which up have a remotely can very in-person, products, continue forward. kind Similarly, our think hadn’t will going with. we value go just we should one that virtual to We’ve any conferences that before. learned we used we with with there virtual very add continue learning use virtual to back in before successful conferences I forward. some question almost as the were where certainly those So example ways to didn’t of specific clear going certainly came It learned innovations of it An we that

We as also travel probably we’d the we that said – we learned need less earlier, travel than before less pandemic. thought Craig we need did

everybody a always for – had – share large where the remotely, also we’ve of our remotely. relatively but a We working workforce working large pandemic,

work remote new when productivity forward developed we going are improve workers, even again, office. the for in some think, will, So our of I that back of our practices all our workers

So that some those this we’ve – the of from we’ve pandemic are this of examples time. the some gone learnings had time through

Andrew Nicholas

Gene. Thanks,

Operator

Thank you.

next from Markets. of Jeff line BMO Capital comes question the Our Silber with

open. now is line Your

Jeff Silber

I $XXX about it first like to last compared guidance know don’t we the first the and expectations also me revenue guidance. upside congratulations just much. quarter, It add are as three where EBITDA adjusted on big so My the you quarters I year well. were question million of guidance first the or took surprise? my months for raising about quarter think let $XXX you up you looks had you upside But million. ago, in up is year. guidance And just three Thanks that provided the on the basically official is for

Craig Safian

Hey, a combination good It’s both. morning, of Jeff.

of quarter going the costs strength was strength, that it’s get if the are through we also, we and source what some three as beat, over baked to of little be said, a flow to. balance our to saw as forecast nicely based and of And we And you softness now was just So we quickly of ramp or we lightness revenue saw the want will, the a we the next in CV our spending. with sticks. the combined strength QX than which of ability lot first it in the up into originally in the That on increasing to bit year combination consistently because quarters. a lighter

subscription is that momentum of outlook it the us So the on not research business, increased the year, well. of we’ve performance our conferences a of strength consulting in bookings part increase and part given business, only QX definitely through the balance then of non-subscription combination and the seen, a as outlook. bit extending the over the allowed the saw the backlog quarter little to we but in the our research We

gave increase in board. the happened but the the year updated the lot gave combination So quarter overall well through see the the you during thing across more guidance. And the first and strength to quarter, us only the things the rearview other it our all the confidence first in big as getting outlook say of those into what us the was a for way mirror outlook visibility obviously, not I’d is,

Jeff Silber

could out comments either how us would that just there the verticals. non-U.S., just and if is can all U.S. switch across be about some I that. I to And international Appreciate call if curious give great. versus about Okay. Thanks. wonder to is negative, geographies. the countries any or back talked know I’m strength Research, I you positively you if doing

Gene Hall

Yes, I go mean, basically Craig. – ahead,

Craig Safian

No, please. Go ahead.

You got it.

Gene Hall

what say other grow well. the U.S. the markets, did there which some as grow as stronger world. isn’t – – can fast are markets, well Europe us, as we Yes, U.S. is, the for around like India, was didn’t didn’t some you but so the and imagine, I’d The big than

doing it kind pretty of the correlates world. to around closely pandemic about – is how think the you So

Jeff Silber

thought. so Thank I Okay. what That’s much. you

Operator

Thank you.

comes question Barclays. with from of line Our Manav the Patnaik next

is line now open. Your

Manav Patnaik

the really just GBS to could about Gene, to you. ask to Thank in wanted impressive. count talk was very that of the I client the you talk hoping just just on just GBS I just I was wanted Obviously, dynamic growth continue again. again. about decline.

Gene Hall

asking are Manav, to clarify, just in you number you asking clients? growth happened So, what’s about the – about with of are the

Manav Patnaik

count that declining. sounds the existing that selling I wallet you’re but as selling – retention keeps more client you of the plans, the report mean, – Yes, maybe with obviously you’re it

curious So what’s happening I’m there. just

Craig Safian

Gene, I’ll... yes.

Gene Hall

Yes.

go yes, – So ahead.

Craig Safian

Good morning, Manav.

Sorry.

actually seen quarter fourth I One down year-over-year, a into from is, QX. So nice couple think of sequential things. improvement, it’s particularly we’ve but

functional If market Manav, to go GBS essentially the area. by is you’ll we remember, way in

a so an tries then HR clients. bring just client, convert because goes finance honest client the might got in be and team them team to and a And that we’ve

able generate may And because to growth are one function. enterprises so, we existing have we only from really nice

have we may As the and clients, across board. three, two, may may we it have we have varies four,

GBS new could existing are brand-new gone was bump become finance, client within often is And be from GBS think, strength even, expanding a a logo growth to combination that enterprise and when in it in the they enterprises, to see brand-new business finance in XQ point, client up a new again, our business necessarily first But sequential like client. the nice where portion have we quarter we in count. enterprises. the increment again, won’t from understand the a we client, But in of logos. client again, so expanding CV I of into quarter did a And it saw attributed they strength first new large and zero

Manav Patnaik

the obviously, at talk wanted you understandably least given And gone through this the gave on And there. Craig, just COVID you I guidance kind of out to that you’ve it. number dynamics, guidance, have Got these the to you visibility gauge perhaps out talked what increased business? try being cloudy the about more you’re and bit Events how else still with conservative of but little about, is there numbers? a still just Just

Craig Safian

yes. Sure,

able most It side be our ways top happened quarter. we been performance We our converted associated what guiding visibility that forward. that the that we’ve that I confident had pre pandemic, it very think, metrics least So several we have will way guidance the pandemic. quarter looking pandemic. the we achieve utilized way line – the actually the over through recent in but on of we to And feel Yes, a prior that with this analyzed to And in actually are flow want guide converted the updating and we quarters as we and well. to to from the the last then expense both just to we in guidance. at enhanced quarter we is each the that gets we with

for were I revenue which a particularly CV think, CV from we the business. of bulk quarter – our really entering with And year, about in And cautious drives the thinking we perspective. ramp, strong of the had the a first beauty ramp particular, bulk little a our recognize QX the we that is the pipeline that pipeline to some balance is reality into got in the and the had first of that the through quarter. a QX But flows benefit And we of bulk of as year into now benefit as well. view revenue. we’ve the

have as So – visibility that well. we enhanced advanced just

I again, quarters changed the around going really that seeing, we’re or so in of numbers hasn’t we up, coming And methodology. And these guidance perform our, from philosophy have guidance on subsequent a this that believe are visibility to everything terms most I’d that, we based perspective, think, are that the guidance based is or at. performance, what say, is on quarters on recent based business

drive driven just visibility recessions, So by each does adjusting the overall been we’ve that quarter-to-quarter, the the in very the volatility selling quarter the pandemic, visibility and changing given change by facts driven every the or Obviously, other by have things. that and driven rapidly since. environment been on

year, the numbers guide, the had we those where sit today, feel is significantly updated guided the from we it while in very what so And higher than with. confident we originally are

Manav Patnaik

Craig. a Thanks Alright. lot,

Operator

you. Thank

line Jefferies. Mazari question comes the with next Our Hamzah of from

open. now is line Your

Unidentified Analyst

John believe seats sits think Where for the from This to Thanks. four around here? go six could in you you a penetration I enterprise. it across Hamzah. level? it filling do your current talk bit Could Hi. is about

Gene Hall

So we levels that One two that question, number under-penetrated. the mean is great John. have were have. we – I of the enterprises just

target XXX,XXX today. talked than more we we about we before, As have enterprises that

look With with think each And products reports they for, after. then level, a there we growing. so organizations sales, functions, additional have very mentioned as we each organization. of down you the you about and can C lot of then obviously, organization, within our organization. different to opportunity as have sales each both their low have functions just those GBS. still those have tremendous well. a of existing like Craig their marketing, are are finance, it’s we each finance example, There you many we seats. organizations, opportunity it enormous enterprise, if quite on little the if there. then earlier, a large enterprises, of go have penetration and those opportunities, about enterprises And to organizations, GTS, for secondly And being large, you opportunities number And add GBS, etcetera. then we for at GTS within our clients, the then, organizations And legal, large we the of is have as those same among and direct And are is seats the growth technology And very, think through today, for even of in

GBS, opportunities, C for level the the level and And so – those enterprises, or the have within – reporting directly but throughout GTS reporting seats whether then both we enterprises, C huge it’s for the both also – additional individual organization.

Unidentified Analyst

us throughout the Thank how we then progressed throughout quarter? any through February from if walk March? Thanks. Great. And you and January, thoughts on you accelerate Maybe did quarter could you. have sales the April, just trends

Gene Hall

they more would selling their the what So throughout clients became the say operations. And what is that quarter. in I’d got the I own visibility cycles of environment terms particular, improved is throughout think, In selling shorter quarter. most say

so – so the sort of And say would kind of quarter. knew money and what better I arm got budget selling they throughout better the money had

Unidentified Analyst

Perfect. Thank you.

Operator

Gene now no remarks. the will There Hall I you. Thank questions. for closing call further turn are back to

Gene Hall

three and we Consulting. delivered today’s expectations GTS summarizing business QX And a growth. growth. and GBS all had was GBS, stated Conferences, call, So segments: Research, our business new quarter double-digit across strong first across quarter. its of very We strong of

Looking a growth value well us will revenue and we ahead, sustained achieve to for over positioned vast market, are And which years we addressable X success. and next for allow beyond. success, contract have double-digit the

income, significant will tuck-in excess continue going which net to expect We EBITDA Thanks we joining acquisitions. flow generate modest strategic today forward deliver us we cash a from deploy to of repurchases quarter. normalized look forward for you share through margin XXXX. in and next to expansion free We again updating and

Operator

call. concludes for today’s your you this gentlemen, conference participation. and Ladies Thank

may You disconnect. now

Gartner (IT) 5 May 212021 Q1 Earnings call transcript