IT - Earnings call transcript Q2 2022

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Operator

Welcome to Gartner's Second Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. After comments by Gene Hall, Gartner's Chief Executive Officer; and Craig Safian, Gartner's Chief Financial Officer. There will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. will discussion call XXXX second This results. financial Instructions] include of a quarter [Operator outlook as our for earnings updated Gartner's And XXXX earnings both release disclosed supplement posted investor.gartner.com. to website, and today's in

adjusted and unless otherwise. are of share call Reconciliations FX-neutral, Gene's described references share are adjustments otherwise to On All are EBITDA, earnings fully growth counts, the counts we unless the average are release stated but Investor our comments stated supplement. to unless website. all EBITDA all stated otherwise. in All for the references use for in diluted in for numbers the is non-GAAP the weighted available Relations rates gartner.com section

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

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

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

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

Gene Hall

enterprise every and around profitable actual insight their objective through all teams and our continues provides excess us. functions Good and our EBITDA Research to revenue, industry performance in continue buyback segments. to morning. Gartner EPS, delivered a capital our had in in and joining Thanks programs. value, world. be return contract the to double-digit for major most Research strong the to Gartner executives largest shareholders second growth quarter. we We across

decisions enable our Our faster, performance priorities. and expert on guidance and stronger tools mission-critical client's smarter

all and continues technologies, new backdrop, ever deliver attracting the managing issues, retaining rate We're even ever. to thriving, in continue address between. the emerging sizes our more to agile. and market talent incredible optimizing Against change more costs, delivering timely in this than We Gartner leveraging and of seen. a is fastest and somewhere sectors, geographies world, I've whether or The we're value value opportunity generating across in have vast We world impressing are and clients more. hybrid to struggling, insights cybersecurity risk such as get a

HR, GTS and or leaders within sales from every and for chain, sales, teams was includes proposition. in our grew their new result, more, We're total teams value value chain, legal, serves year-over-year. beyond A the XX% remain GTS, and contract serves supply their sales a also up IT. retention business As their growth This function, XX%, technology and XX%. value marketing, IT, research sales Sales incredible GBS HR, finance, and benefit were up GBS finance, demand Global all-time near and was our revenue was Technology second X% was global Global highs. or headcount teams. QX leaders quarter, growing sales more. leaders Across contract services very contract value XX%. business remained teams strong. marketing, sales, IT. strong. XX% business our headcount Global grew supply

qualified our As for an on Leveraging life of and to enterprises audience. brings progress priorities. the result, Gartner measurable conferences we of extraordinary research mission-critical see power a their our the value the insights, engaged support highly business

strong Bookings the quarter project feedback since saw continue pace resoundingly strong growth XX%. They has supply conferences These the in-person and a start Gartner extension the learn technology During finance been value extended initiatives engage, the also across based Australia, covered at execute and the pandemic. clients had In up delivered U.S. helps we revenue up Bookings of most their Gartner our attendees. destination and opportunities of through Attendee strong positive. with QX, for is a in IT, an closing, Europe, XX%. business. Consulting conferences backlog and deeper exhibitors deeply we both strong, to strategic Consulting chain work. first connect, were Research. driving Consulting in-person.

generate of cash to free our flow excess We reduced continue shares well significant net to We income. excess outstanding. in which shareholders, returned capital

ahead, Looking positioned we well line for strong top double-digit are growth.

Our to we of in shareholder them value. we deploy above and With Craig? modestly generate to XXs, will well Safian. low the further Craig over I’ll Officer, are over free Financial Chief increase excess levels, underlying to our margins cash time. continue call well earnings, the to which expect And pre-pandemic flow drive that, hand we in

Craig Safian

and Thank morning. you, Gene, good

future in were and results our top EPS. quarter increasing With improved The than investing expectations, growth. Second we the line expected adjusted guidance. quarter for and XXXX and demand again conferences a contract strong are above reflects growth revenue with second half our discipline value, strong outlook cost balance better for double-digit between second results, results successful

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

for million, XX%, contribution $X.XX, In addition, year Adjusted EBITDA total and EPS down and our the an flow in XX% revenue up as up reported by year-over-year quarter free towards free quarter as value was full in million. year-over-year and driven was year, XX% basis on points neutral last second year-over-year quarter strong XX% XX% down FX normal. received $XXX the rolling XX% up versus up contract quarter grew $XXX X% proceeds growth. returned was XX was cash basis, costs neutral. cash the prior was Adjusting a and flow Research basis. insurance the for margin X% FX on

the normal CV with effectiveness, scale, travel expenses about avoidance operational up versus of the up second temporary year. XXXX. XX% support continued XX% was increased or and catch line margin $X.X end to continuing prior research of quarter, headcount on improved to contribution the research than Higher billion reflect quarter Contract value at the contribution margins Second business. in was

XX the contract the value net Quarterly million increased a number. contract quarter to we $XX reduced As previously, Quarterly was to measure which CV basis million. $XX exit about XXXX there or decision is performance points. in close discussed quarter, second value combination The notable reflects NCVI is This growth across record in of market, helpful million practices. business CV contributed by growth NCVI the our $XXX Russian million. about way the continued and by our the broad of increase even of in new this $XX strong in saw near sequential metric. CV of based retention was seasonality driven to though rates We a all headline

an end of technology sales all practice and business grew them growth growth. record and with was double-digit the quarter, more manufacturing up From practices led technology second strong perspective, contract XX% retail, many a Global NCVI growing Our XX% rates of media year-over-year. billion business CV at grew of industry for GTS the our million, and XX% at near quarterly year. $XX second than the quarter. versus retention new of levels our by $X.X of driven prior value had

was X% XXX% was the X% was for against about XXX GTS GTS compare. basis near retention headcount quota-bearing the business and about year While very was annual for versus up up tough up, down points year-over-year. XX%. year-over-year levels. last The quarter, rate growth GTS compound new record two-year

successfully delivering the brought track are on XXXX, we We investments results. recruiting turnover by and/or of double-digit growth end to have are to as in get down

to invest continue margins. double-digit in will sustained long-term team also strong our sales growth to We drive delivering while

to quarter. appendix contract XX% of full our set Global found million in metrics year-over-year, of sales term supplement. was outlook high XX%. end earnings business CV increased of the quarter, $XXX medium the of can be of first value is above million the up our the regular the GTS second $XX XX% Our at which end from GBS

for two-year across points headcount and for will quota-bearing reflecting the the rate X% increased While full portfolio was up GBS annual sustained year-over-year. strong new against new very for the quarter, compound to retention growth was The future. compared for up XXXX us XX%. business about double-digit business five we compare. growth XXX% position year-over-year, GBS the robust was hire last headcount XX% help in year, to growth GBS in percentage

XX%. can our revenue enthusiastically second for ahead $XXX GTS, appendix supplement. expectations GBS of was the Contribution full of regular to quarter earnings conferences conferences Conferences the of with found exhibitors We and in attendees in planned virtual As the set We the balance in-person. to quarter in formats. quarter. in-person conferences run our the XX held as metrics of return meetings in our in-person margin both be million, virtual was six held eight year. the and for and event We in-person

were million, XX%. Consulting Second quarter June of expected strong points higher an the basis. year-over-year XX% neutral with prior million, at bookings XXX up a was inclusion another in versus mixed consulting neutral utilization year described FX XX% of on second revenues basis an million quarter. revenues quarter and growth FX contribution revenues from year-over-year a Labor-based by $XX up strong versus up up an XXth FX were was contract revenue, margin XX rate. than better percentage QX and rates contracts, contributed in to XX% XX% points we last quarter The increasing basis last the optimization. neutral growth basis with $XXX year about XX% increased change multi-year benefit $XXX year-over-year on the on Backlog

was basis neutral business the on up versus XX% and optimization contract year. reported FX an as Our prior XX%

and XX% increased as XX% result in neutral reported sales segment hiring in second increase reported expense, second cost $XX the in-person detailed strong charge. basis. functions, return conferences estate year-over-year XX% basis. neutral increased to strong on The and biggest continued in of have XX% growth SG&A one-time valuable. XXXX was we consulting an increased million highly FX as growth of the and services as quarter real past, the year-over-year FX is part our CV the an higher this Consolidated in following commission As support quarter the headcount SG&A of destination on increased the and of to quarter in in G&A and the a higher driver a

term expenses XX% million and SG&A on as our basis EBITDA of revenue for as near $XXX up expect was quarter neutral. the increase second a continues. to hiring catch FX percentage XX% the reported up year-over-year a up We over

in This count $X.X Adjusting for average cash adjusted income $X.XX, for compared quarter which payments. million the the was to tax The about CapEx other a up about in the Adjusted total of growth quarter the an adjusted client of was about exited balances. infrastructure. quarter the shares year-over-year. guidance Second last flow model down quarter the an a of EBITDA expenses costs $XXX Net expectations. low upfront $XX reflected of in was the of second modest forecast and down our modestly our the EPS for expense versus laptops on cash to year. as Free to rate million. outstanding for important continues quarter. used due in X.X% $XX XXXX, XX% QX was exceeding year-over-year items quarter quarter XX the and XX% flow adjust quarter for the for tax an second flow $X year-over-year. is X% in XX% XXXX in The for with revenue million. and deferred the was part software, business income Free the quarter result quarter. million be excluding we needs was was our upside reduction quarter share CapEx shares used rate shares. XX.X% calculation for basis. $XX We to million up increase the interest for was debt growth -end to of quarter The $XXX was capitalized QX second cash million financing increase second of the insurance net Depreciation an flow million or we of versus at of the million proceeds our received operating with XXXX. was million Operating XX unweighted net cash

conversion of rolling of four very free capital As offset flow CapEx, is in we flow cash excess with being XX% free cash differences by proceeds partially revenue strong was for Adjusting cash cash a our as year, last net quarter received percent from basis. on strong income, interest, cash the taxes cash inflows. flow margin or free many generate we know, well working modest of and a EBITDA the insurance you

the On flow $XXX cash the second was At quarter, we and of had XXX% end income. same of the basis, cash. of XX% million EBITDA of free net GAAP

balance June billion. was debt XXth Our $X.X

XX was debt gross month under times. to trailing two EBITDA reported Our

had our our capital and Our on balance to ample around of the cash revolver tuck-in share sheet M&A. the expected cash generation, through unused liquidity of first We on XXX We remaining June. on authorization strategy end flow remaining million repurchased million and of strategic year. provide about XXX free of at half deliver stock excess this allocation repurchases the

authorization the of the outstanding shares. expect of continue needed a refresh of end This We to June, forward. reduced XX%. this through repurchase have is going the by million our board XXXX we shares end Since as X the to reduction

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

digit have twenties, very modestly are time. two catch to well and medium-term outlook expect in been double we be we strong growth, margins Our hiring our years and is while for pre-pandemic levels, continuing We estimate spending. above underlying low the the increase travel past over up resume to margins revenue to to them

capital and will usual us We practice. line specific with and will growth, a cash February Strong flow source consistent of cash strong working give intensity, modest top the XXXX to now guidance expansion, deliver in future. allow our free margin capital as low in

our improved on is incremental full This to headwinds. rates now XXX May. guided strong reflect an second of from the growth the an rates points our points basis up outlook basis full year year. and XXX increasing expect when impact We based QX above are to revenue FX for we half for guidance performance We despite FX in

quarters non-subscription last the retention from discussed QBH growth. tenure within mix, performance phasing XXXX we several and As including rates two the research quarters, strong NCVI and record year, the benefited factors,

the continue to assume same be we XXXX. levels as persist year. benefits We The compares growth at move challenging through those will continue the through not do that to

a based we've take guidance. patterns, updated on in which to and trends measured the continue We approach historical reflected

and of conferences, assume the planned. during expenses to for the as our run all to we quarters, will reflect increases consolidated with our For we headcount couple assumptions current to growth. year able continue the be in-person conferences support Consistent past commentary future significant

levels labor as modeled indicated. XXXX previously T&E costs, we've We have higher well above

expense We we delivered also in have higher commission selling due performance to the XXXX. XXXX during very good

invest facing improvement to in continuous of we applications Finally, internal both part as continue and and client our our innovation tech, programs.

follows. is as Our XXXX for updated guidance

guidance performance We FX growth our FX at XX%. quarter. The expect growth basis the is least from up about second prior research due of points billion, revenue is neutral of to XXX NCVI which in about neutral $X.XXX strong

We expect at is of growth about million, revenue neutral. least of which $XXX conferences FX XX%

up growth is of points FX FX strengthening result XXX of about of least almost at is May, expect at XXXX least XX%. $X.XX. outlook since neutral. May, now million, strong due We than $X.XX than $XXX growth guidance our U.S. full about which higher We as guidance. least which now outlook Without our for since quarter. neutral in $XXX expect year U.S. expect second EPS an been EBITDA least The to FX would've consulting guidance million revenue Without increase in adjusted of $XXX is billion from and about revenue the of up would've $X.XXX guidance. revenue prior previous basis growth dollar at from neutral strengthening at our our EBITDA million guidance the million The XX% dollars an the about is previous consolidated guidance prior $XXX been margin our billion, well. We performance of

we XXXX least flow now expect For of cash free $XXX at million.

relations site. is our are All details outstanding, our which million guidance included full repurchases. the of investor shares guidance based Our reflects on on XX year year-to-date

million XXXX, of the for Finally, to least deliver EBITDA. third expect at we quarter of $XXX

and committed $XXX XX% the in stock shareholders. Our value remain strong through the quarter in second performance in capital shares Adjusted fueled to grew around momentum XXXX continued the past was with year at over We million repurchased strong to this significant June our business. very excess returning by reduction growth in year. XX%. the EPS across Contract

And revenue the grow can financial at medium-term, margins. modestly we CV deliver growth out with fast modest M&A. least EBITDA flow to model be margin unchanged. Looking research to growth. are XX% take over us and to our tuck and cash our strategic expand in digit cost With as over share can benefits the sales leverage continue will we will our repurchases, expansion, happy in G&A enhancing count over lower expectations With growing CapEx CV your which the of call With back as the gross that growth, I'll on time capital We front. our deploy operator XX% needs of line up and share free turn we'll the because questions. Operator? paying and clients and on value to double we'll

Operator

coming question Meuler first Our Instructions] [Operator line now Jeff with you. is Baird, open. from Thank your

Jeff Meuler

Yeah, thanks.

the a first underlying Just question margin. on clarifying

low will XX%, to a twenties, as not point, to say low underlying that some at like be XX.X% recession would well? or those include you're like again maintain we at a could expect margins recession and So when least saying you through if you have XX% able

Craig Safian

for of No, locked Hey, in the margin. good morning, questions, on Jeff. terms low in Thanks the underlying XX.X% it twenties. as wasn't

looked the cetera. the we've the at through pandemic, last lot learned business a As few years et we've over

the the And top now low the future margins as from point digit so can of twenties. expand rates margins double the that well. underlying comfortable that line we growth are into the and grow can modestly we again, we're And business in

In terms – yeah, ahead. of go

Jeff Meuler

going just a including at recession. that was least to margin I Yeah. in say, maintain

Craig Safian

Yeah.

was of second question. the part So the that

believe opportunity. We the grow to way we got we've market and are sure that the capture ways running the of is untapped continuing opportunity right growth business, So about making the ensure we that we sales those still deliver we right one huge again, that again and go the be the is future et could in ensure force a untapped believe impact would there thinking by that we could advisors, insights is toggle cetera. business of drive that margins and expansion there underlying again, analyst we the and into modest If also to well. to margin of investment those on each the as number rates recessionary the areas market were

Jeff Meuler

it. what build And of metrics any Gartner – and you're seeing I commentary July on CAGRs around but kind the used us on two company perspective, the demand, in other then comments fresh given just the the the whether just such, pipeline from when we “near-record” that Got client think business, or June guess, new being I from content the real is? to and macro topics it's of business in you're conversion growth year and records giving anticipatory time just a any

Gene Hall

Hi Gene. Jeff, it’s

selling the to QX. good So think quite new had we near business as been stable environment compared record said has I you and levels. Again,

We have near record levels. retention

Our exhibitors believe and had reflected been conferences business revenues with that's the and the one strong forward, in booking for quarters going believe was ever our we've guidance of I attendees consulting had And both very the best backlog of XX%, QX, isn’t in XX%. and that there's other of lead to covers you growth was quite nothing, if that up there under look kind the robust. than selling anything would we

Craig Safian

And of echo tough compares would throughout and are in the briefly the super this at CV great earlier a Jeff, I growth balance report morning pretty rate. remain year. the having just still your tough they QX growing read We're

so but of the underlying other still about good some compares for business. businesses momentum and the year, as well and in the conferences their very heard You consulting this the of of balance feel around tough metrics

Jeff Meuler

thank Got you. Yep. it,

Operator

Thank you.

Balsky from Bank of comes Heather America. question next Our with

open. is now line Your

Heather Balsky

of how question. guess in a you little for I you the more the is business downturn, topic you thank Hi, going the happening crisis maybe back back about macro more kind what into to look terms guess feel the your can you today about are decline, other of talk near-term. even when in line happens periods a on my crisis I sales in bit resilient how taking as potentially downturn you or something and financial of further going COVID

Gene Hall

it’s Gene. Heather, Hi,

make world clearly So concerned we're of is, shrinking any clients a between. around at about where is are business clients as environment things. we and downturn, the always prepared have point in very we those are being and first cognizant, we're growing macroeconomic clients the going try to that in that us, and time, a for one thing of given sure that And

have do always clients all more in but see struggling. the we we of are So clients, What that we it those is macroeconomic just time. a downturn

Now, we constantly as in I environment we've and of whatever adjust And sure are this to make prepared try economic number mentioned a we ways. earlier, comes. for do

actually One where our for of we do understand concerned clients of is surveys what their they're to kind mindset about. them is,

than to July, In fact, and talent, priorities. she clients they how have Officers we on three Financial about concerned in hard was hire therefore still more the of to their respond. that did XXX One what And those of seeing they're mind a for survey talent, see they're and our talent. was securing Chief it's wages

in digital, is to one second The accelerating they even want keep downturn.

we they XX% asked the CFOs, to going they're X% downturn, to in to maintain technology they're said said, fact, to increase decrease to to In these it downturn? continue spending and going XX% do going said, it. are what on they're going

third So priority operations, continues estate, And this these technology like the economics people continued on. pay higher prove to as manage on spending and digital. do to to travel, pay as investments investment real things hire well of wages in to the was to business

And help talent the taking continue with making the digital So clients, they helping line recently can updated secure doing their we're our And time. important they impact manage make call making that's priorities, them work part is all with most accelerate cost and to them sure those kinds content and to business. of research we on we what business to thirdly, with it inflation, sure we're the help our can we manage our, spend optimization it. maybe of a what big sure

in And things sure issues so survey. has And research like most service that the research, our what then in you executives and the how people make We topics. those we priorities are. changed construing of on updated fees. going today just our CFO forward. all We are the individual with surveys So fact, and in sales we've I their it's those can trainings all three understand level most our I based research continue do and our important then match gave our on, terms we then, July update mentioned people do we'll to that clients what introduced

And do a so on once, do one-time we ongoing thing of basis. this kind this we wasn't an

is So on important. people strategy content to topics part our the of find always our is make sure

if quite Now, things with business. agility both clearly core of contracts those our conversations is them priorities. part of with how do people also you to structural have will those sure all help grow strategy and can and to And in share – service we time. making going of that. if equipped manage help our we is one be first costs that to how sales the have of this to is we But our and are then with we that things we senior executives business, on your high over the Like, of them

That factors making it our And we're group certainly you underlying control if can And preferred so downturn look and and content for time, aware downturn. perform sure our also making great, we there. it. structural it better are and better preparing sure each at be the things is is those might sales is, we a are two over

Heather Balsky

market? And that anything Great. longer contract for space the I like mentioned in you your in player, Are Thanks another seeing that. Thanks. recently doing guess cycles.

Gene Hall

the should sure reviewed CFO ago. people, we and So they it. review train sales cycles. be it we I'd meeting what it by a say Executive CFO likely prepared call to our our escalations was to we CFO Chief contracting to would packet. longer a I haven't Chief be be that Because like go see might that's a that their might have prepare have would for year HR contract And say than and Officer client and make that ready to it's we and likely happen both they to seen who a more Information

Heather Balsky

Thank answering you. you my Thank for question.

Operator

Thank you.

from George with Tong question Goldman Our next Sachs. comes

Your line is now open.

George Tong

Good in GBS GTS. Hi. Thanks. The stronger morning. was performance than noticeably

GBS, between different headcount XX% in compared the, businesses be at might the customer it XX% the XX% it GBS CV reflect difference that look GTS If this growth and does internally priorities GBS? you was at two at and GTS. was GTS Does between to or reflect growth growth demand of X%

Gene Hall

George. Hey Yeah.

I than that reflects investments more else. think anything it we've made the

in ago, So outside you years we areas investing heavily back five back of IT. began fact, in go go pretty

strong couple We So I sales supply a with think areas investments seeing us. of were We bought been hadn't those in hadn’t we're after HR, for after legal, them, strong. and what both [indiscernible] we in significantly the in CEB content, marketing, rate traditionally lot there's service invested of increased time. investments of then were that been the the kind And chain, developed of investments. and growth those finance, outcome We GBS discussion increased now sales a front accelerated is capacity, lot a up capacity, and it of of we're we about capacity, at the seeing research benefits those. buying

piece. I think the so first that's And

major one increase we headcount head this some growing to sales in huge grow had is business. our of market we've our sales count. opportunity Clearly the increase piece productivity. productivity, sales while factors good second is The essential. with is Growing And

the not fact headcount faster about which over than which GBS is at like rate a this GBS with sales you time, at we've And is I'm so grown about of since look over the about we've but And if our headcount last flat. GTS, our grown faster that head XX% X% compound sales growth sorry year. quarter, a that year, XXXX, is

growth the in allowed be a that's so lot GBS. And higher to

CV the is in of really things, combination powered those So investments Salesforce two faster growth and the the what's growth. the

Craig Safian

consistent capture just, to market, at can GBS go growers. I'd George medium-term, thing that that is we market we XX% other over and both be the our look And add the ability as believe to GTS XX% and opportunity given the

grow little to so, very both GBS of rates. ahead we right very remain now, continue GTS GBS bit digit growth And and yes, can confident very, growing at a double but that strong is very, that

George Tong

it. helpful. the from increased And in low-twenties. will quarter Got normalized saying XX%. XX% That's your EBITDA you're margins to now you underlying XX% be Last margin targets and

or term increasing you margin clarify, to from back are are it going you just the target your quarter? prior medium underlying the So over reiterating

Craig Safian

a great Yeah, it's question.

question. it let attempt me to important is clarify because a very So

were grow business on And say growth is right? So at double over to key number as the and of normalized operating or to time. providing been XXXX? normal” we're EBITDA is margins can what points. we forward the operating the a we we've there what kind we things time one, When context, that go would are digit just the have been back visibility run were now our your way, our So moved had in better expand what increased we I attempting “more margins really more view margin, higher operating over at would give point to in business and margins, What view line we because modestly a XXXX believe XX% can rates we another have business. around of at. ways do those they would that And into our top discussing are to run leverage looking if two gotten

what we to are it's the of it's it and on real normal then think invest grow portfolio to like growth underlying look that also expenses? for yes, view we And like low-twenties expand that of so update the towards business into is in-person conferences we the look sustain number support what and future way the and do is on. the modestly back need? What does think a for amount the but does when travel we headcount so and estate What and to is catch new can up the margins normal continue what new about as it an come

George Tong

Got helpful. it. Thank That's you.

Operator

Kaplan Toni next Our from with question Stanley. comes Morgan

now open. is line Your

Greg Parrish

the Greg on our strong quarter. question Hey, and for this is Thanks for congrats Toni. Parrish taking

margin. about talk wanted Just

You the up could expense the step and but get of if in Craig, probably to a those weren't lot on space hiring bridge understand up implied given ramped down. you of margins help margin lot went sort in a the us you yeah, the of really the half how back just in quarter kind

Craig Safian

absolutely. Yes,

will in a half impact on number hit margins that of you've So the the the of second the year. items

up half second from sure base first half hiring into cost and we continue to big we hiring appropriately from second aggressive goes So we're make piece so also remain future and we're catch XXXX that investing on that's for the we in the aggressive very as the year. of for half to a that expect as the the

second of big resumption The travel. thing is

returning a up to us just well. our teams and in-person of but of the leaders run second normal, global teams that those be ramp year we as and destination lot global half that conferences, in we'll see some the is is of And it tied front to we want of so in to

adjustment is Third our period normal April thing comp X. happens

second the first have We only have we quarter in So of the of in half quarters of obviously that half of year. that two the one the year.

one are delivering those bridging variable with to destination cost three a think biggies you return so And those in And the the about Obviously there's fourth then is of lot the the expenses. as conferences. in-person. in-person

Greg Parrish

guess, the the Great. environment, inflationary this little this I follow-up Are Craig, think for of different the Thanks above getting year? months three still normal macro quarter, there. ago. was I pricing sort given you than more And pricing, just a on I talked bit broad expecting year, color it guess last quick is a you about

Craig Safian

price inflation. I it we to Yes, bulk our I to think our way people are The mean, matching about costs want sure that inflation think or wage cost we the make are increases Greg, with of related. is

are on seeing we're matching increases good our wages. that with we feel what our we price So

Greg Parrish

you. Thank Okay.

Operator

you. Thank

next question from with William Our Blair. Andrew comes Nicholas

now is line Your open.

Andrew Nicholas

I remarks, in your attrition and relative the more question but good coming Hi, it there, to you quarter efforts. think time you Wanted really on a could on spend the recruiting in expectations solid morning. your that's briefly, kind bit prepared of successful growth, how a first hoping to was headcount trends, increase on recorder ask I touched

it Just bit happy full pretty color where does like there, a because year? sound more the little that's you're still trending and for goals your with

Gene Hall

Yes, great question. Andrew,

causes our then first what call now of has that. attrition, we gone turnover levels. associates. understand Attrition associate the making great sure many that to up in down of So actually our the the kind worked like And went actually and want We normal couple to our years. hard terms retain over companies to address we we last would

we're so turnover. with very happy that And

we strong that, recruiting to have addition team. In very a

value as job a of proposition team that employee truly been and We world-class great have doing well. recruiting team's and a we recruiting have course a great

That's So you the where crack employee to headcount in us to team. allowed get associate things, support turnover, combine proposition, a to growth lower growth up three value our those need recruiting a business. back great we net our

Andrew Nicholas

industries, Great. the growth Thank any there about practices uncertainty for based internationally. the across my and to or like seems CV broad call anything And U.S. in but the there then in you're for the versus out in pretty you. in able sell kind to Obviously, EMEA strength follow court? given example, difference or across wanted up, I there's growth of ask to how is the geopolitical

Gene Hall

nothing what Yes. – say there's I there's is systematic. Hey,

Europe, typical for U.S. proceeding seen. countries different so very are of well. same then Europe of nothing of is some If along, terms doing aren't, the what that versus rest that we've in some There's sort geographic And of really and is region. flat is that there's of at true kind world and you countries look remarkable it's the

Craig Safian

when broad based and it say growth, Andrew, we is Yes, based. broad

So our growth industry all all we across across top look at at at it geographies, we growth rates. growing rates. they're they're nice nice XX When look cuts, growing

headcount, based. has biggest challenge operational where are be broad there are challenges own slower. always growing may The us, yes, but of challenges. growing and And our where not a those sales a where the But little generally our super is a been like so, pockets either bit we've remained pretty has or micro for growth grown indicator headcount faster there or

Andrew Nicholas

you. Thank Makes sense.

Operator

Thank you.

with comes Fargo. Wells question Seth next Weber from Our

open. is Your line now

Seth Weber

will everybody. the that Hey, the wanted that question. of year. up question appreciate in I for half Thanks just second side. and on travel, I a to you the up some you of par back the next think will get headwinds kind do kind that end of second into be year? Thanks. you think rate catch still of run year, T&E taking ask is to the good expense there or stuff like by morning, ramping another Do the

Craig Safian

morning. good a Yes, It's Seth. question. Good

was So I it be we the the year four travel”, in light months pick off where given year will three with pandemic, has indicative first year, of the “normal or started a second to starting more and half year, the this little were the the back think of up. of

half probably second is indicative. And more so, yes,

it thinking is did again, as just we think our last in need base we back to embraced XXXX compared travel, in at need year” spend we we're And least I in the the probably to still less way to the operating and thrived, We “normal do and about XXXX. but travel same to XX% XXXX. associate where company we expect don't the we think virtually. at that has that back did volume than

Seth Weber

the recession the were of you. the just model the Thank anything or then talking strength resilient And like of up the kind And just kind just was about of any follow reflective anything was there it. those items, – surprised just talking really comment those of there, – of consulting just than revenue backlog about resistant what on thanks. that in the expect. might there, is you backlog or then and unusual model of line unusual earlier I is were reflective that you Got areas at was that some more of what I'm just just consulting there XX%. just non-subscription earlier more is that people I'm or is XX%

Craig Safian

they then that is the had that way problems. and really Seth, help challenges our need clients research conferences in content challenges the Yes, had through I helpful think deliver our helping or consulting content reflects we them was it our solve that with the clients and just

great it's kind going value so what's indicative, on. think of And we I just have proposition, but a

Seth Weber

or that you forward? kind Okay. a off the little do expect of bit just is that's non-subscription feel a going to come – revenue, And like here level that you would a sustainable

Craig Safian

had Yes Seth. is line year that on really a last It we strong year.

compares as again, value into times Gene's offer the very and have proposition updated guides we or offerings we there, initial good and guidance model which point, tough to products times. did but in strong our rougher a there our So compelling well, and

still again, us, we so against be the performance. tough to super grower a for but expect strong it And nice XXXX compare

Seth Weber

it. Got

Okay. Thanks guys. Appreciate it.

Operator

you. Thank

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

open. now is line Your

Unidentified Analyst

just on it Is Ryan is quick this was for still months I had ago? potential labor as Jeff. find as it on supply Hi, employees side. to question three a tight the

Gene Hall

companies go Ryan, the question, of and read with I CFO I a other of what to in I is press see lot Great a survey. lot what the challenges.

talent. We've proposition value very we've is our that employee One of Again, talent. the found CFOs no that trouble actually biggest concerns to had have hire their strong. ability hiring is

reflected at had no that's We have hiring that And brand and so a results in we've associates people great with hiring trouble saw. the all. you

Unidentified Analyst

to then if a prior Got look we just question, up as the on we're it. to And downturn? heading revenues non-subscription follow into leading indicator should a

Gene Hall

a I one for the we mean, that revenue a look indicators, and look out relatively of line would business smallest the No, have little not small I think don't there. we volatile. think so. leading I as it be actually Again, lines I it's broadly can across across,

at look would I you at research guide indicators. our consulting, growth as CV to now So leading look look conferences and at

Unidentified Analyst

you. Thank it. Got

Operator

you. Thank

Barclays. Our with Patnaik question Manav next from comes

open. line now is Your

Unidentified Analyst

This morning. on for is Brendan Good Manav.

on your few quarters. up opportunity next ask and may catch hiring at to talent the have least of want some you to obviously headcount competitors Just in for are freezing an

As a next specifically, so over more labor next really are can grow up few GTS bit where of a for you started things the you this a market off friendly think gets improve you – level to this obviously quarters? Is XX% catch or couple quarter. the

Gene Hall

hiring catch up Brendan, in question. had and business expected last Hey great we it's so really and lot of year a I we've to including a grew rapidly GTS. on, our mean rapidly more

to force by we GBS’ slower clients the can that get sell that five And points more hiring to percentage growth. want three so sales we catch up we over and to properly to our time GTS so prepared our take our also than and be service And grow way, clients. CV expect

be to XX%, over to growth see target our is would XX% growth. you'd of CV XX% XX% expect headcount time growth – So

Craig Safian

to we Gene's for way year the catching future sustained about are normal to that to algorithm we of point, of Brendan, and make And doing that's this how growth. investing Obviously, for want the a are both lot think needs current is sure up. we sort that

with with quota-bearing double-digit GBS end growth. expecting fully And rates the bit higher we're headcount both a GTS GBS so up to see you'll those at year strong growth XX and little and obviously potentially

Unidentified Analyst

question full? better else just but is driving really, it is Is conferences expected? it the the guidance what like is the than or Okay. And conferences, you just is all here, – there that something another Are that higher? attendance over moving increase to kind that is

Gene Hall

demand our great very Hey, piece meet way value, strong very attendees we're so of the continuing seeing for robust it we're finding just prospects how And that very, Craig is Brendan, finding conferences tremendous for talk then conferences. demand on. I'll to for it so the And a find them. are first in Exhibitors let [indiscernible]. about

Craig Safian

Yes.

bookings to enthusiastically our very and destination QX come, as So look of both I were events quarter, strong in-person in we on years our heard you leading number to in second our and expectations come. about mentioned, bookings would number I the think, And obviously around And as through would Brendan, even attendees pretty the in few comments, conferences where think be so first conferences, able the cautious and Gene well. want of that exhibitors the QX earlier our as returned our quarter. groups second advanced a

upfront and we And because enthusiastic the outlook anything hadn't three person is revenue attendees saw – so we around almost an both caution in return essentially from in streams, years. some our three the just update, delivered really And exhibitors.

Unidentified Analyst

Great. Thank you.

Operator

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

Your open. line is

Unidentified Analyst

or Hi, levels. good back you of right today Thank much How could to tenure productivity tenure now, the was kind you. sales talk force to GTS versus morning. GTS about on sales I you actually pre-pandemic. view Stephanie those can and is add a little the if is productivity pre-pandemic bit force hoping This Hamzah. your

Gene Hall

Hey Stephanie, great question.

takes get speed. to up tenure So to hire time When determinant important salesperson, some it productivity. fully an is of new we

hiring more more a internal focused as sales as to other help and those sales so having And up even person get on that both people get tenure speed quickly, to training We're speed is very well people to systems new up faster. productive.

year during recent hired as we fewer at you it's QX, up look the towards it ramped it, we last people sales was was we during been to a in because we drop memory, of force for keep year our in tenure XXXX. expect tenure that more the again hiring, The If level normal rest a pandemic, as pretty the hiring, highest high. average the bit

Unidentified Analyst

the Great, at? kind how's And is bit then Could of thank environment, you you. focus kind pipeline the your M&A looking switching where about talk gears. today and of

Craig Safian

got we've hundred good than a From more touch morning. with in staying that. M&A companies few team obviously, and out a Stephanie, Hey at looking is perspective, an that there and actively actually opportunities tracking well

is as I we've strategy organically. can achieve growth we an growth we're margin number articulated and think our company one, believe expansion term our organic of modest we and double-digit medium objectives the

do to do or that. or fill not we get when And it can us capability asset an M&A, gap a catalyze said, there. That to things so does or like it M&A or require like add

to that the think fill at catalyze I portfolio screen, at the or looking are long-term. us over look as add radar in can gaps we us our things we assets that can help or So

like quarters three either. I'm a completely there in not important strong obviously or But either strategic gap on for two enhancing around just markets for equity the opportunities value the been again, valuations. add a catalyze we'll can think be the every to us. fill has again tuck-in lookout continue that I over assets growth, sure has recalibration yet last recalibrated seller or

Unidentified Analyst

so Thank you Great. much.

Operator

call And closing no Hall I'm further currently back remarks. for I'd Gene like the you. turn over to this time. to questions Thank showing at

Gene Hall

today's drove performances the we business, geography, Well, across every industry, value. second In we major function the deliver every quarter, incredible across call. and strong every summarizing

have for growth. We line top demand have strong We market double-digit a drive opportunity. sustained can with vast services untapped

to continue our As return we guidance. to excess invest for the future. capital of our shareholders We'll to significant XXXX levels

our again to And quarter. Thanks guidance. us increased we we you updating all, for of joining forward look next First today. XXXX

Operator

for you Thank call. conference today's concludes participating. This

You may now disconnect.

Gartner (IT) 2 Aug 222022 Q2 Earnings call transcript