IT - Earnings call transcript Q2 2021

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Operator

Thank you for standing by and welcome to the Gartner’s Second Quarter 2021 Earnings Conference Call. [Operator Instructions] I would now like to hand the call over to David Cohen, Gartner's GVP of Investor Relations. Please go ahead.

David Cohen

Good morning, everyone. We appreciate you joining us today for Gartner’s second 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 second discussion today’s XXXX outlook quarter XXXX to 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

three revenues We and XX% strong us. increased buybacks. for strength delivered free joining research were company second momentum XXXX. our significantly flow. and continued of segments positive all revenue, with expectations. We of thanks the Gartner's exceeding and morning Good up our in across again cash contract EBITDA Total business the quarter pace results value, in

see geographies, our size to opportunities Research profitable most and continue is every segment. industries, growth We largest and enterprise. across

teams major world. their all Our functions industry every the and across enterprise around in serves executives research segment

in all with sectors, was teams leaders the their geographies. GTS Technology and fast is Total both strength serves accelerating Sales XX% or in and to sizes Global GBS both value GTS, driven retention growth by business. IT. Our increased market and quarter. within opportunity across new contract and This

sales value contract accelerated, teams contributed GTS all XX% legal X% finance, and business supply in GPS supply countries. returning tech growth each HR, growth accelerated GTS we growth across This sales contract drove chain, and XX all growth. beyond value contract sales, to QX, we have including growth or growth future. Global strong our includes And and accelerating, of value chain manufacturing, XX%. practices services, double-digit top delivering their continue marketing, outstanding expect Both virtually For of contract again finance, exceeded CD our And industries, and GBS more. telecom. serves HR, our practices GTS leaders IT. to growth. in and the and value to to growth

So across practices. focus, a sustained a results consistent our proven research entire business, of of we're the execution seeing

We deliver have continued as our business a to well-positioned vast double-digit we continue research growth. opportunity. And long-term market is sustained to

conferences. to Turning

expectations. conferences For $XX million, the revenues of our exceeding second were XXXX, quarter again

know, situation you our XXXX address in-person To virtual unable conferences. we we to during this to audiences. deliver of many to were As insights valuable conferences extraordinarily created hold

research be ensure our accelerating with to over we're last their year. year XX% extended this prepare business. up if of optimization through project Research rates, the some Consulting our our half pace conferences most complement an in Consulting operationally we was from growing and To work. revenue time extension labor-based year. Consulting second With initiatives down IT rapidly for Gartner Contract Overall, X% revenue last a based to QX. growth up record is We to business. in-person labor-based high recruiting continues helps deeper had of our strategic revenues continue were We allow. in the an strength conditions execute in keep Gartner capacity. important clients

see incredible provides great among development flow. our a market, continued growth accelerating. With clients, best today's all labor tough growth on free in as professional combined Gartner cost that and we the EBITDA opportunities promotion Our expectations. a disciplined for an cash impact have and in management place revenues Strong sales-driven hiring our resulted career. EBITDA company strong for strong Even we're is candidates They and associates. our management, effective exceeded cash with a know long-term

in free Our segments, We we cash strength be value, revenue, this priorities like tuck-in acquisitions, exceeding and strong results flow. strategic, strong for three EBITDA quarter delivered was continue quarter another did the small research share business and Summarizing, QX to cash one expectations. across all and with flow repurchases. our contract

double-digit Looking ahead, well-positioned long-term for sustained we're growth.

a vast market. have addressable We

We business have model with contribution an strong recurring margins. revenue attractive

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

Craig Safian

Thank you, Gene, and good morning.

value quarter free EBITDA were Second excellent in cash revenue, strength flow. with growth, results contract and

are our XXXX performance. guidance QX We strong increasing to reflect our

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

includes cancelled EBITDA on EPS In cash more basis. FX and We an the business XX% flow year-over-year Free FX reported $XXX grew $XXX year-over-year on XX% Free million. strong basis XX% was flow was prior insurance quarter quarter XXXX up was saw proceeds second contribution the from retention new the Research Adjusted conferences. up neutral quarter. $X.XX. XX% as in was million neutral. to and cash XXX revenue in margin related $XXX addition, million, points total versus and than XX%, year. the up

margin planned about effectiveness, Contribution improved XXXX. continued and XX%, reflect contribution of up lower points Second margins versus XXX both operational expenses was headcount. quarter basis research travel avoidance than

is increased a contract seasonality quarter, of value way in this Global second end notable was in manufacturing X% $X.X sales to was from second the $X to travel Total by though quarter as versus growth continued the and However, to GTS pandemic for second the the quarter. Quarterly the CV NCVI in at reverse high second year value Quarterly helpful last new than XX. metric. By to normal the record of increased quarter net performance year-over-year billion $XXX industry, XX% is NCVI June the measure significantly a up prior year. services. levels at resume historical grew FX first contract the $XX increased value CV The is there technology some NCVI. neutral led million of lows contract environment compared spending or to technology, better billion, and quarter and contract was million, support temporary the even improvement selling we improve quarter. margin and will growth. value in

While retention up basis points about for year-over-year. GTS was XXX% for the quarter, XXX

quarter rolling with a XX% While retention existing fully back isn't was up normal continued measure. in because improvement business new last clients. GTS in and to yet logos year with versus upsell it's four new strength

the increased above high-end of quarter, at set Sales which first in the to regular CV our the XX% medium Broad-based XX% industries. up the is million led CV be our was technology of end growth quarter. Global term supplement. of full Our can Business was $XXX care $XX second and earnings metrics health found by year-over-year, of XX%. the from million Contract outlook Value GBS

XX% growth. delivered year-over-year and including or All year-over-year. sales of finance, CV and each practices more supply sequential our marketing grew HR, chain

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

the Contribution quarter in As earnings year-ago in revenue quarter. the performance. found with quarter. quarter second supplement. Conferences by revenue full set top our in was conferences metrics the margin We of for our compared was million no the GBS driven strong virtual GTS XX regular XX% to can be $XX line held in

of held number a virtual meetings. We Avanta also

up almost in more XX% basis neutral than June Backlog on down versus an another was $XXX year-over-year last basis contribution on Second year-over-year. revenues basis. $XX XX% strong X,XXX the up million. up was X% Utilization revenues headcount points On billable up bookings QX basis XX neutral an after quarter quarter. FX to was XX%, FX points year-over-year the Consulting of year X% Labor-based increased up neutral X%. second an up margin revenues of quarter, year and Consulting quarter. by were million, X%. versus were million, XXX $XXX was XXX prior basis, Labor-based at XX% FX

basis was Our highly part this services Cost XX% X% reported have neutral lower period, the on increases Contract XX% versus with decreased the year merit support year-over-year Optimization expenses lower detailed has is personnel business. severance growth to part annual increased to Consolidated service quarter. the the below our of in X% quarter was of and year-over-year Compared second and E&E expenses partially prior planned quarter conference highest and Optimization past, due Contract SG&A increased offset cost segment of the second X% declined FX quarter. by a X% to period and the net were and reinstatement in year in prior down the FX targets. related the revenue of variable. neutral remains year than because for to FX costs. growth in was business down headcount SG&A The Operating as prior zero. close in ever neutral. higher due consulting and we the

market due of to normal to hiring continues levels ramp up, remains our rate turnover While modestly labor above tighter conditions.

accelerating rapidly $XXX growth we're FX reported was said, EBITDA and capacity to growing recruiting XX% up up our rates. Gene basis for the year-over-year pace million, quarter with keep XX% As on a second our neutral.

$XX was the insurance $X tax of adjusted XXXX for quarter weighted EBITDA XX.X expense million cash to XX.X% rate was reflecting up in of quarter was service for adjust million QX cash XX% million for flow the our the tax diluted and again software exited Second the includes income operating from last the count reflected quarter and shares. which of estate EPS roughly deferred last quarter. QX quarter quarter income shares. the $XXX in We cost the second the versus versus rate with average the diluted was The financing fully of cancellations. XXXX. the QX low-end into costs flow quarter. about calculation fully XX.X second second to high-end went quarter conference Operating year. Adjusted which in revenue compared above proceeds used The items the Net share up the adjusted the XXXX, excluding million towards flat since expectations. for $XXX to net XX.X% related in real was year. Depreciation of quarter second was we interest net The quarter use million, for million, $X.XX. was

XX% flow estate CapEx insurance real was prior versus for by lower to was be continues strength Free operating of XX% flow EBITDA for function the a $XXX year. was the largely Cash improved cash Excluding cash the quarter improved is versus million, CapEx quarter quarter. flow investments. proceeds, $XX up which collections. Lower driven and year-over-year. by XX% year about prior down million, the the growth

free cash margin flow Excluding cash with was model the part year flow upfront improved a flow modest of insurance growth of basis. percent an rolling Free XX% expenditure and versus by cash business proceeds, revenue be continues client to capital four a Free needs or payments. free the XX% flow our important quarter quarter. on as prior cash

million well continuing the insurance we income. of been the flow and the was flow GAAP net both cash. At cash $XXX few was cash free quarter, excess making years. end XX% second past over Free had of the Excluding the improvement revenue, of adjusted of we've proceeds, in

available During of corporate $XXX used A. existing this purposes we share the senior term X.XXX% million repurchases. loan with The proceeds $XXX including issuance We the of new a for coupon. quarter, from repay notes million new is the to X-year general balance unsecured issued

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

was reported gross XX-month to EBITDA debt Our trailing about X.Xx.

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

billion $XXX net In the quarter, in at another stock, quarter. the time our Board Year-to-date, repurchased July, we million cash share including closing more of $XXX than acquisition $XX second for adding the with made $X third during a increased we've repurchase During million. authorization the small this paid million. year,

X, As more have $X billion August for share than of we repurchases. available

the as continue We Board to will authorization refresh repurchase the needed. expect

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

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

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

for our For Conferences, full on guidance based virtual year. still the being is

ability much uncertainty and in-person COVID around uptick directives, the government conferences the With balance the run in our during year. more there of shifting is to

operationally some to plan in-person conferences. continue for We

cancellation planning XXXX. able updated have we to to related conferences but we expect are need Our may run we been guidance upside reflects and some for run If our incremental in-person, additional for to conferences, both to profitability in-person costs where revenue cancel.

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

are in The to and across recruiting XXXX expanding into and We additional hiring our continue beyond investing support business. hiring drive additional will future capacity, current the growth.

digits mid for for is headcount by in plan single XXXX. low double of to GBS increase quota-bearing end the and current Our the digits GTS

a on of programs number Additionally, improving we continue productivity. a to invest with sales in focus

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

continue expenses. travel assume current plans up ramp Our related a to in

of rest this restrictions add in we've travel longer Over to of we'd year, fourth we the assumed, expense quarter. the course savings. place the than If for remain more see

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

business at of is year seeing reflects which of we we full expect billion, an We we least XX% will EBITDA increase ongoing XX.X%. the of growth year. reported the move momentum, as With versus margins to continue through are restore now adjusted and about $X.XX XXXX spending

quarter. thinking We forward around expect with for last XX% baseline to going a consistent is the margins about reasonable comments XX% our

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

be to out stands sheet balance interest today, XXXX, expense Looking as $XXX expect around million. we the to

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

second insurance this XXXX, of For expect included $X.XX are our Investor million Relations free at on in received site. billion. we flow guidance All year This cash year. $XXX proceeds least of of details now the our includes the quarter the full

to of Turning second the year. the half

the Research, the the of For Consulting in the we later into is and in Conferences year. visibility earlier have on revenue an year both are This more Seasonally, NCVI has QX. typically more farther we revenue. get effect year into because also full

quarters. likelihood less past than few prudently there start the in we've More the in uncertainty and of the the lower world and conservative plan. XXXX, Finally, began at of a seen a was with a we upside uncertainty, halfway there's kind lot through of of with year the macro

we from upside to likely guidance a Any is closer than more lower reported expect revenue. As higher our to in earlier the than be come year. result, numbers costs to

expect deliver QX, $XXX million to For of EBITDA. at least we

the We quarter for also expect rate the high XXs. the tax in

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

demand over have for strong half, will shares enhanced We With which to our first business, the a momentum lower share updated outlook repurchase count. the stronger with will and reflect across XXXX time, we meaningfully our environment visibility. the

of and We and we'll excess be are happy the billion $X that, over ensure back year, shareholders. more With questions. are to operator and certain to We remain this committed returning our than expenses capital continue investing Operator? to repurchased momentum. to the turn worth restoring call our to your to I'll we take well-positioned stock

Operator

question [Operator Securities. with Instructions] Our BofA from Bisbee Gary first comes

is Your line open.

Gary Bisbee

don't results. of inability wanted morning all the that I deliver hiring target has on? been What's take Hey, are I plan a and The interested to how you congratulations investing accelerating or there and long to and costs part maybe labor you guess, has productivity cost. you've particularly there it factors little given strong being to been? good will revenue I year, I'm your how more dig been the little bit to that sales in low-end. of more talked the guess, below guys, it more Is the difficult, think you into that strong trend on other in about year the it sort you. get tightness, a hire, to another you that this targeting ahead is Or need really keeping investment? market a at from Thank

Gene Hall

it's Gary, Hey, Gene.

year into capacity over that came XXXX. this we've of lot up we built So sales with a

And results. point you in -- lot in question, so your mentioned of you're seeing we to capacity, have sales your actually sales our that a

of slow it's at I And point Having of we opportunity said think ramp now hiring that hiring, we so results, felt and the our had has that, my and productivity start like time reason our in earlier to been still net we've relatively sales ramping sales up capacity mentioned the as to we been and capacity. plenty we do. plenty up we're

to year position building next been pipeline beyond. and recruiting candidates to through we year we'd hiring for that expect our capability, well us building aggressively increase so of the And and we've go our as very

Craig Safian

we've well. as that world good as thing I with fits and other starts add, the started to just morning, is has the reopen, Gary, had And, would

did And plans panned of in have into hasn't so given We those situation just more plans that the well. reopen to a facilities, the out that back have travel. we have lot the world. further pushed And to year had as been

really that be large half some other the highlighted expense Gene So back as combination side headcount just out it's the year. of the that just on to as pushed into well a have buckets continued

Gary Bisbee

level. Whereas note, were it some you then cited? if just right, it, costs, delays margin the offices you follow-up, going travel moving the on like opening that And that down quickly that in of that coming medium last on is want there? above to Is is just hire to half XX% to target, you term Okay. back or quick I these of as into it as that what's backed that. also part second quarter, like XX% just appears talking about the Or maybe inability

Craig Safian

Yes, it's things, would all say. three Gary, I of those

the pushed ramp Gene the things including talked So, further getting out up hiring into in year, about. that just

until needs that hire pretend let's the burden going that's obviously But our P&L, all So, on the burden low we X not December P&L. on didn't XXXX to of year happen. XXXX full

outlook is push year. to the year the just This margin because, for we further into half in of unchanged certain continue of last again, terms really out next from So quarter. changed year back further our expanses and

Gary Bisbee

thank Great, you.

Operator

Our next Meuler from Baird. Jeff with question comes

is open. Your line

Jeffrey Meuler

sequential headcount stronger kick thank I packages because growth, GBS had the be what Yes, challenge and any gear on GBS into selling it's harder the therefore and if retain wondering noticed individuals being And are metrics inflecting need thoughts I appropriate the back a earlier you. GTS has to it's tech in it if of domain has GTS is function to sales I'm just that guess of hiring adjusted? with a or growth you sooner not. is latter, that comp more is, experience? Or there? to been

Gene Hall

Jeff. hey, Yes,

[indiscernible] we started I'd which -- net biggest said business you faster Having would that's our and modestly where it I the GTS is GBS, sales it. parts So, more affects while say of with, GTS. the a even our acceleration, like affect-- mentioned to technology get that are is software our hiring a our issue that, the -- are my remarks, you in as well have with higher And of that of we've turnover with the as force. rapid up in people got piece is to -- in need that's sooner as growth be the the than first the higher, mostly it only

greater start have of the we said just in it's the time earlier up today think we recruiting my capacity back question timing I again. I pieces, we of -- about to chose the kind when when and what the have

place a have to We -- work. we're great

we're talents being place Our really that love course, salespeople know as here. well. attract to of great a new and And

Jeffrey Meuler

you comps why accelerated current lift easy. it, And and not the quarter adjust one level And the I'd a to there at there at then But how that you I GTS above level it? of had constant Because Okay. like, that look broad And to range. GBS because throughout the is your aren't term guess organic sounds are the is I currency guess the in I remained that guidance, basis some expect financial medium the the that then growth trends? about based, is experience you a as coming reason on expansion. out thinking crisis it from kind of historical cyclical

not. I GBS upside potential or if So just and on why any there's, guess, thoughts

Craig Safian

and Jeff, thanks morning, for question. the Good

way the term medium terms in think we the think business of I unchanged. about over the

the it see we exceptionally that [indiscernible] the a last half medium this accelerate, continued business started, can the in XX% And you metrics to which board. so, been our in as key XX% through of retention, is and as really growth again, has acceleration improvements Obviously, of well the great GTS across combination can even nice has well. in range. first new year. grow we We've GBS both year And over seen believe the performing that term, it GBS

as alluded from a practice. any perspective based one practice to, and not perspective. actually it's industry broad you So It's from

XX% in And can over remain as bullish we XX% to the so, And believe we both GTS medium that again, GBS. We well. grow on range. we on remain term, bullish

Jeffrey Meuler

both. you, Thank Okay.

Operator

comes with Our Sachs. next from Tong Goldman George question

open. is line Your

George Tong

up XXX,XXX, increase? GPS ever. Good The stepped drove first force you NCBI Can what to step And sales levels to the be productivity GBS of ahead GBS GTS you Thanks. productivity the for to the whether back time came down Hi. over which for or near-term? on below expect morning. elaborate

Gene Hall

George. drives our which hey, thing the the design. before, heard recruiting we is the is Yes. The productivity capability, training forces tools we've our in that sales both process have in portals have, we

so bit And has thing and has the what as is, better, the you're little factors, that's come seeing both the productivity driving seeing a combination productivity market of recession that's those as process And tools gotten, improvement. what affect the drive you're businesses. recruiting, the training,

And so forces. over productivity in sales time, we both improving expect both

George Tong

of And of the just drove question, what would GTS being the part when GTS? for to near-term ahead to flip you to back below GBS first time? over expect GBS And productivity on the the that come second

Gene Hall

We is as, think going it higher don't one about to than other. be the

what GBS larger We that And has business a is have call a GTS there's difference developers, and don't meaningful are much accounts. people GTS. that number between expect sales of actually And have that any existing have improvements will one time. we over base. we installed higher both which

that sales both impact number higher and time. executives with developers so GBS, of GBS thing GTS. job to productivity helps much have business also -- a do the those at is That's And clients. call than to compared business what we have large whose part but executives, we In over we a of sell have to in account account more that we developers, existing now of GTS, the we number business

George Tong

And you you've how should the your helpful. then margins half second your That’s to midpoint. year margins the guidance? half XXXX for it. embedding into with And increased Got margins? EBITDA compared respecting at What XX.X% margins? secondly, expectations Are full

Gene Hall

And the the think little George. how what normalized around pushing full spending guided than reason as margin expected preliminarily least Gary one the in Obviously, course of highlighted the year happening the we've over deferral first later run to preliminary XX% we XXXX. it's or continues Yet, this Thanks was full guided, as to it's bit burden for about that a the at primary that implies. of -- well, half than as we've XXXX, and and to through year. a assuming for we margins morning, little into there's of XX% really a business the question. come just for that, half the what lower and second are the out bear accelerate sooner, that Good the to but I higher bit

a have we've so, year. than deferred year. But second largely for expectation of half this higher to the because full on and XX% And But little to certain bit later in out that's XX% expenses the impact P&L. pushed a the the is again, we'll XXXX

George Tong

Got helpful. Thank it. you. Very

Operator

Our Kaplan comes Toni with Morgan from Stanley. next question

Your line is open.

Toni Kaplan

you're and from of that was appetite hearing could year, that the upside the running clients, Thank variant and from But talk this hearing terms you talked hoping in so demand about conferences. delta them guidance. just be all? to planning would on you're much. I at about what some clients impacted of you're operationally the you that what's of for later has in-person I you know

Gene Hall

Hey, Toni.

say, enthusiastic conferences quite about we're and in-person usually Our to I'd are, clients. forward conferences looking remain returning those to it. our in-person Clients with popular

even in As the concern of for -- say demand to registrations sentiment, clients them. if I'd that, variant really can the the delta there, conferences address more not same in as so a as very the the conferences say that U.S., of that haven't to Outside about by back But change concern variant, Having on. of changed terms the today, in our right about attending variant, around it's we just much. hasn't over there's could sit we I'd been of kind either registrations are things it, that of said the now, the and here enthusiastic delta wildly there's things, if of conference, affected much goes the underlying world. U.S a return time, about concerned are about and the the want delta terms very

introducing so over to when safe it's to expect demand. time, conferences so, to And do in-person that be we'd meet

Toni Kaplan

billion $X a of than more purchased year. free your stock And great. That's this

strategic updates a allocation quarter. any I you small priorities think on capital did and one this Just to tuck-ins,

us a sense optimal of tuck-in what strategic So now this right just give at point. the Thanks. like looks

Craig Safian

it Hey, start out I'll and good on morning, Gene over flip M&A to strategy. then Toni. the

You're the right, $X this first year. of our we've half billion repurchased stock over worth of a through

As a medium strategic I two prioritize. small characterize shareholders, which in stacked capital buyback to perspective. capital priorities XA as, to value have we've And M&A, not and to the our returning we It's be always through enhancing tuck-in from it XB. which programs, highlighted, is they're going and allocation is size. would largely

we of as remain market. the a the end. what forward, given we in priority year, free cash this returning sheet, look sheet cash balance or ample our through Clearly, two forward, to it bias the But half we those have first we see in flow, around a flexibility capital put As priorities, balance for on ample an buyback be programs. move ample we

as first to year. we So and it the half I'll bias being side. tuck-in talk it the opposed M&A We buybacks Gene buybacks can of about flip overstatement. do to happened strategic strong M&A a put towards And an to to just through the

Gene Hall

way focused capabilities time, our or additions on over Yes, another. our to Toni, in in been have so one acquisitions general,

which of acquisitions to we've been talent. kind So sometimes to times get extensions, product Other it's been actual used. they've

as capabilities, And either or think a offering in it you in product our -- sense. people sense so I about a direct think improve can to ways

Toni Kaplan

Thank you.

Operator

William Blair. comes from Nicholas Our Andrew next with question

open. is line Your

Andrew Nicholas

Hi, the elevated two, to you could quarter, how I touch and engagement seen was what just pre-COVID, pre-pandemic and on a hoping of relative or how for the quarter this two compares client past metrics you've the you so in it's posted that still good levels? this get If a of morning, record to temporary of is to level could if client do important I be to that retention phenomenon, think more current environment? sense how think much trying is you given

Gene Hall

out get client buy value in us. -- it. do when to Andrew, with they important is it they business, our really services, of when the values, engagement clients engage they get our they When

the that to you that's a compared as it XXXX. about the due so, the of because of there's substantially we of our due we in also get of we get value that clients when And engagement environment, to we stimulate uncertainty. actually -- is we to a services. client know fact get same XXXX. more our And energy, It's we it's engagement our was up an But lot more thinking partially engagement, can as said, lot spend ways out -- again,

So it's kind related. are the of two things

Andrew Nicholas

my Got guidance, upside for at now least your at methodology. quarters several follow-up, least, of row your or it. have Makes a in relative in sizable And sense. pretty terms to then a

be more early the months, how stable a now And if so it past this the traditional you're operating that, whether to an wondering or considering I'm year environment later guidance, just XX XX of that thinking bit to or it's than seems about given approach bracketed your it's at potentially and you'll to approach reverting more next. point, back Thanks. consider to some whether you're

Gene Hall

back. actually Andrew. the Great see shifted to I us We've slipping pre-pandemic. our question. guidance methodology morning, Good don't And least at

there's the prudently. been when entered conservatively planned obviously, even world. plan as the And thoughtfully, we we've this year, guys, well. say to alluded plan you pandemic, beginning the And been you a think in of to, since I uncertainty of lot would trying I as

As we've lot is visibility has heck world got more into a a the stabilized performing. the how business of and

said, said with guide that use. the around variability. much with expect would in have. comfortable variability, earlier your the But methodology now revenue reiterate guidance methodology than side. are way less prepared the we remarks that We On more the expected probably expense on comfortable on are my the current that we moving guidance side we we that what and still we That forward, I'd I variability

Andrew Nicholas

it. Thank you. Got

Operator

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

is open. line Your

Jeffrey Silber

much. Thank so you

higher to it prepared about color Are in expected than You your competitors? your their own higher -- to slightly industries, any on force. going Where believe going I these turnover from other out was they be folks they remarks going? Are noted sales great. would are going

Gene Hall

turnover The a to which business is it's great has that recruiting, Jeff. Hey, same places company across -- going And is turnover known are the programs. we the I up. -- as that is the always training gone, as mentioned, modestly

industry. recruit has And tends be recruit the technology trying one there's people which the to so there's that gone, from And from us. simplest us. We're of like to to

Jeffrey Silber

the planning would can some guidance helpful. me, Okay, And from but what side, from in revenue in-person. you includes delta us for conference your is us -- it on excuse since the shift mentioned the in-person the great. virtual That's that conference your virtual guidance the to you destinations, least for only for guidance remind purposes, just be modeling if

Gene Hall

vary we conference-by-conference on it's the difference got Jeff, this part is, reason it and Yes, a basis. will why way the of

about are is, said, hard, And the very in that be and is but it be your way terms the building else or balance of be able And a to impossible timing made on question as in-person best numbers of right to answer the think or some only. decisions and upside conference-by-conference we in location, it depend year, guide, is current everything basis. those run the on will I think plug to if it our it to virtual would done it's numbers, now. will with model. we in -- the to conferences and a will it So That on

Jeffrey Silber

If right. I'm quick sneak could I one one, All in sorry.

mentioned you that us? costs. Can those related cancellation include the for You some additional does guidance quantify

Gene Hall

the costs. sure. potential probably double in Yes, millions now. hard terms digits low that of quantify It's to It's cancellation right

million contractual, current of the low them [ph] contemplation. the into some are it's costs a is go them of Some decision, that pre-cancellation be but some in double-digit to will conference

Jeffrey Silber

much. so Thanks great. Okay,

Operator

question Mazari next [Operator Hamzah Jefferies. Instructions] Our comes with from

line open. is Your

Mario Cortellacci

Hamzah. for Mario in Cortellacci this Hi, filling

there's based decision just variant, how more is Just it and kind thinking about you're Or Or more making considering you your to that the in-person you for demand Is the wondering prudence strictly conferences. back just comfortable you around government part, on if Gartner's are guidelines? of more going opening guys, sure your delta that feel no in will events have because restrictions, government safe? place, the it? and doing

Gene Hall

Mario. Yes,

really value guidelines that, relevant. to what conference, we'd conferences, get back like any going I that mentioned, as follow hold starting are point any in and before Having government to any we're them. clients, the said and have the actually appreciate in-person of do to our -- we is certainly in-person we So that we're to going

or agencies a it how follow have sort in have regulation, the it's as said, feel shouldn't CDC those guidelines. circumstance, large clients in -- see third to they basis, this the of other relevant thing about regular gatherings we the a well. is we're on not where even to countries going And So you if our survey

we And government as And do we even was, safe as sentiment to finally no wouldn't clients as okay, a if that wouldn't don't our want client well. we so, And, of not if hold to if center course, even there thing certainly to use We if that were it's do assessment. guidelines, we we Even reflect well. them it's safe. think want guidance, but their well. our and think own the it, follow

factors kind the in-person making it's go are terms of in those whether into of we decision So not. hold conference or that the

Mario Cortellacci

that lever in can the sales that can of just compare there when they're Got you to add to but contributing, then levers what for to a you I what GTS. back the force follow-up, you it. guess, about, force and you productivity, that guess, then bigger for guess, biggest is the that XX-year sales I how help I can talked one And and for levers all pull pre-pandemic, And did my just versus pre-pandemic GTS of are You you're talk being then today pull could about XX-year also, productivity. is levels? GBS broad some much at get looking GTS the

Gene Hall

sure the kinds to on trained the have great so which productivity they're sell recruit that it's processes, products, people, the making first the are if really the we're earlier, those best equipped we making program, with sure we our things. And improving of I best constantly bring we things part Gartner is missed that factors Yes, tools. impact recruiting board them the

time, And so, we drive those productivity expect improvements. will over

In time. tenures, new we in and because fewer are people on average average, hiring terms of a the has to over proportion lower higher so slowed were compared -- tenure we hiring new our with gone tenure where from XXXX, up our of slowed

Craig Safian

how quantify can Anyway give or us a much help for help to contribute productivity? to sense that

Gene Hall

numbers, mean, again, talked it you. I can't about -- quantify don't for track the but publicly. we things we we aren't Yes, I those

And leave so the, it XX I years at guess, higher. I'll the

Mario Cortellacci

Understood. Thank you.

Operator

no further for back Gene could remarks. are questions, to There turn over call Hall any closing the I

Gene Hall

EBITDA accelerating to our keep GBS X% and to exceeding this Well, value value across quarter. It accelerated was strengthened today's was our research another delivered results contract contract free growth. contract revenue, and flow. segments, We're and with strong cash strong expectations. accelerated all call, GTS growth across QX summarizing XX%. business to We three hiring growth business pace value,

vast sustained contribution an Looking business a ahead, addressable recurring attractive long-term growth. model double-digit margins. We’ve We’ve we're well-positioned for revenue with strong market.

We a XXXX. expect to modest deliver going from We significant generate EBITDA expansion margin forward free flow. normalized cash

to you and tuck-in us continue acquisitions. will deploy which quarter. look joining income, today net next is and Next again through forward strategic share to for updating I repurchases Thanks

Operator

the program. concludes This

You a have may Everyone day. disconnect. great now

Gartner (IT) 3 Aug 212021 Q2 Earnings call transcript