Earnings call transcript Q4 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, everyone. Welcome to Gartner's Fourth Quarter 2022 Earnings Call. I'm David Cohen, SVP of Investor Relations. 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. question-and-answer a be will session. There that Please is recorded. conference be advised being today's

and our website, discussion will quarter for as earnings call include of Gartner's XXXX both release to today's in This investor.gartner.com. a disclosed outlook and fourth earnings posted supplement results XXXX financial

unless all On EBITDA. EBITDA adjusted references are the call, to for stated otherwise,

references all value from fully counts of unless to With in diluted weighted as our unless stated in growth All described section the counts And stated All are website. are otherwise. Gene's Russia in comments earnings rates share comments for its contract we available average otherwise. non-GAAP are Relations adjustments gartner.com share XXXX. FX Reconciliations use Investor release neutral for exclude the the numbers and supplement.

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

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

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

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

Gene Hall

accelerated leaders The and are our level ongoing through volatility repurchase the us to it volatile. drove dealing nearly growth even strong free Inflation it's a generated Gartner today. flow extremely in dollar strongest performance fourth for in was the EPS. Good high value, with contract XX-years. been we in XX-years highest double-digit cash remains morning, to Enterprise revenue, program. quarter in billion returned uncertainty. that the joining with shareholders thanks EBITDA and than more and $X and We in and share

assessing Enterprises a has remote the work. labor are There of supply has been The versus volatile. in-person volatile. prices ongoing been recession. versus are hybrid energy are market There impact concerns chain issues, widespread of

and factors and world. these know best help for the of impact time the Gartner turbulent source navigating is more that around they enterprises help. need All Leaders this

Our often critical executives their failure growth whether help mode they're clients and their We enterprises. success between with for difference and succeed make priorities, costs. or services the mission in cutting

volatility, are are critical With expenses. mission more Officers recent But they're all that the time, Financial this financial enterprises, in same our shows under carefully Even Chief scrutinizing most investment at they increasing pressure. extreme research and priorities.

our functions We and Our all help industry major segment. world. around across continues largest research most be profitable to leaders enterprise business in every the

market delivering Our more sectors, all ever. across fast we're And and sizes geographies. than value opportunity is

despite GTS contract serve revenue industry two We distinct XX%. moderated, sizes sales across Total their XX% contract we channels: and tough including sales company in double-digit global at growth was high-single-digits, technology GTS this was still vendors, Research In compares. IP saw even with and and grew but the majority teams sectors, grew segment value grew despite growth practices, value sales executives is largest tougher and also growth teams large segment, at the growth of broad-based our compares. force. client quarter. managers. or Contract GTS The value this regions. leaders GTS geographic serves and serves product leaders CEOs their XX%. fourth technology through

we've deliver grew beyond Gartner growth seen annual engaged leaders XXXX. GBS the XX% chain, or and audience. contract compound teams Sales within Business supply extraordinarily value we In legal sales, exceptional GBS qualified includes their insights and IT. in and Global five products in HR, conferences rates. years marketing, GXL since launched serves finance, more. our valuable This GBS,

half, significantly second delivered out most we In sold Most all the the to were for our conferences half conferences. in-person XXXX, In excellent. has back of in-person Feedback our virtually. been we first more pivoted strategic project-based of nearly conferences Research. through our for execute we've of helps consulting work. and their XXXX than exhibitor Consulting in extended half initiatives is sold clients deeper, extension an most space XXXX. of Gartner Gartner

Consulting important Consulting the We research and complement in a revenue the fourth grew is XX% an IT pipeline. quarter. to our exited backlog with year business. strong

talented Our associates. by business fueled is our highly

about During lowest XXXX, with we percentage grew we ended of associates. growth, XXXX open With ever. the our X,XXX team by positions this

results our better provide which retention. we're clients better When fully in we staffed, service,

sell fully also territories more We staffed. are in that

for our carefully have recent aligned have long-term we opportunity growth. We hiring with the demand and

from from the recent reflects in impact XXXX prudent environment. considering Our experiences most the outlook potential global QX. been also We've volatility our of

deliver expect And wide our least upside guidance line the economic range XX.X% with to trends. scenarios. across business for opportunity a performs of We historical has in at if margins

you guidance take will through Craig more detail. our in

agile levels unique Gartner open enterprises By One anywhere have and world, we the have to to value ever. thriving, provide percentage of staffing We're as XXXX. with that or of success. that lowest we carefully sustained the demand we and positions exceptionally we We've well in between. things about adapting record is shortly aligned prepared of changing being are enter the

environment. Our addresses today's to successful do know content the be critical things in mission right we And priorities. to any

we strong closing, business. again growth saw In the across

growth to are drive into the we well ahead, future. Looking far positioned

over reduces net cash invest growth, increases free buybacks, time. we returns significant which shares increase to we and return in over shareholders we through well or margins our income to modestly flow and capital generate excess future for outstanding time Even expect as of

With call to Craig that, Officer, the Financial hand I'll our over Chief Safian.

Craig Safian

with adjusted contract FX stronger than quarter was Thank even growth results in neutral EBITDA EPS. our strong you, results. reported growth double-digit and good and value, revenue, Fourth Gene, morning. were

better planned margins. EBITDA delivered We than also

of free flow During to repurchases. cash that generated returned we through $X billion we than almost XXXX, more and stock shareholders

million. included XX%, EPS total Our $XXX XX%, XX%, of growth of free financial full-year growth the and cash flow total contract of of growth diluted XXXX value performance revenue for EBITDA of adjusted $XX.XX,

in the the tough start higher for than accounts built the The introducing at the we opportunity the guidance, likely and if near-term outlook. year which stronger demand compares are upside the variability is into outcomes. XXXX of of We guidance than for reasonably normal reflects set

the catch last function their around did and well are across to positioned enterprise industries very the add teams up world. leaders we and With year; value all hiring to we

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

In contribution up prior basis up addition, total margin XX% $XXX down year-over-year was FX XX%, points the million, versus and XXX was EBITDA neutral. year. XX%

was prior XX% $X.XX, the catch was XX% $XXX XX% headcount was EPS flow from the of year up We XXXX. the Adjusted XX,XXX million. in associates, About quarter with of growth cash the finished end free and years. up from up

to growth and demand talent a and calibrated heading carefully been well positioned we future perspective are has revenue hiring Our XXXX. from into

neutral the modestly basis had by our revenue year-over-year benefit growth. X% in during quarter our an contribution quarter somewhat expenses on XXXX. levels a below the Research and fourth Fourth XX% lower The contract research and post-pandemic value with margin expectations. quarter headcount margin reported driven from grew contribution was consistent as strong still XX%, FX travel

full-year XX% Contract revenues in The increased CV basis XXXX. our tech of vendors. on annualized the contract the XXXX, revenue leaders under global at our than a function research for XX% at value and coming at from the year enterprise more contract reported their with teams is across balance line by neutral. a from and CV and value XX% For or bulk looking the was represents margin the In time. leaders gross XX% contribution FX in of both GBS, GTS point with

functions cases, mission most other leader’s IT force. business GTS these our leaders priorities. function And who their critical around enterprise through and important across GBS end of helping industries. sales technology serve are leaders business Our we we leaders of both serve the sales our who who and all In includes function leaders, world users serve force. enterprise We're address through we

$X.X Russia. high-single-digits, of the the fourth the of up billion strong prior XX.X% GTS impact at CV from and compared leaders quarter high-teens grew year ‘XX. of function across in for was from CV to grew up a vendors growth enterprise XX.X% the quarter, GBS double-digit exiting fourth rates. rate versus at adjusted the CV tech and end

other and $XXX [Technical was business value practices, practices, or all contract growth company across of rates combined was sizes Difficulty] broad-based regions. in our sectors net high-single-digit had our almost transportation, million manufacturing size enterprise was The the retail sectors. growth all and at industry geographic which categories. sectors, million. grew $XXX fastest and Quarterly We double-digit rates. increase technology CV at industry grew media, of double-digit NCVI than Across growth across

We countries, growth also our drove top of nine the double-digit growth in XX. with XX in high-single-digit

down XXX% $X.X X.X% at for of quarterly fourth was for Russia. GTS the XX% end $XXX versus GTS billion the for exit year. sales XX.X% technology quarter. adjusted business and year NCVI of retention new was had was GTS up of CV prior the quarter, versus while the last million, Global up

against with business modestly was New leaders compare. up function year-over-year tough IT a

strongest tech of ever. with even against compare XXXX, was facing vendors business its New quarter tougher QX which

compared headcount year, was quota-bearing December up growth last XXXX. GTS XX%, of from about XX% up hiring was the catch of to

investments Our our drive long-term continued growth. sales teams sustained double-digit in will

metrics appendix be the found set can Our full earnings of our in GTS regular of supplement.

to over was medium-term billion of at the of is XX%. CV of up quarter, sales our fourth high-end XX% XX% which $X business Global outlook the above end year-over-year,

while million growth third grow increased All GBS of GBS which grew our retention chain faster than GBS was rates XX%. and other by than led $XX at double-digit to XXX%. both practices marketing for the continued supply HR, quarter, CV from

year Headcount being last very versus in the year-over-year than against growth annual two-year headcount in double-digit strong growth sustained GBS from new XX% future. compare. we XX% XXXX help increased a hired to a X% will compound quota-bearing us business up for was XXXX. the business new X%. was little position rate more GBS up The of catch for growth with

the As full can found of of with be earnings in GBS metrics our supplement. set our GTS, regular appendix

quarter. been to quarter exciting business was our the margin in-person conferences we has conferences. Conferences for in for the $XXX fourth held in in-person to XX%, return quarter It was contribution the million, nine revenue very

reported year-over-year year the was Consulting were in neutral basis, revenues revenues the to based $XXX million, year of and contribution $XX contribution were full up XX% a and on last margin XX% FX basis. basis consulting FX up revenue Labor FX up XX%. XX% million. quarter Fourth revenues neutral QX by quarter. XXXX, Gross an XX%. XX% On fourth neutral. XX% on versus increased XX% was For margin increased an

neutral FX The was described the year, quarter. an percentage year-over-year in basis a about change last XX million, rate. of points growth with XX% December at to XX Backlog on multi-year inclusion bookings year-over-year calculation contributed our earlier backlog strong contracts another increasing we $XXX

XX% business the strong optimization prior and an quarter neutral on year. contract % XX Our FX reported as had increasing a basis very versus

segment of have in is we highly variable. the this detailed As part the past, consulting

XXXX. Consolidated XX% Full-year and of FX the on basis a destination XX% basis consulting of and basis. continued biggest neutral XXX were from on return increased cost revenue quarter reported reported on fourth support XX% FX margin up was contribution XX% an Gross services as points was year-over-year basis. XX% strong neutral an higher the conferences. the to headcount growth in-person and increase in of our The up drivers to

an quarter for on year-over-year lower We X% compared as decreased and in FX in was XXXX. SG&A non-recurring due functions. X% comparable neutral headcount G&A increased charges SG&A XXXX, basis. reported basis, to additional On sales the and fourth non-cash up a to had

basis a For was on on fourth an basis services on and EBITDA neutral. up FX XX% increased the XXXX. quarter up in reported XX% basis on SG&A neutral year-over-year on FX cost an $XXX XX% neutral the FX reported full a million, -year, basis. and XX% reported of a XX% for and increased XX% basis

our in full-year expectations. was reported $X.XX upside at consulting a most the quarter on our neutral. EBITDA and low-end Fourth billion, basis XXXX exceeding and reflected forecasts, to XX% expenses our for revenue up guidance FX XX% of EBITDA over the increase notably

versus XX.X% was tax hedged the for for interest with The $XX about floating in the which million Depreciation was rate used The prior adjusted The we the million quarter. of income through modestly for deferred net the quarter. down use rate, to fourth for adjust QX XXXX. financing the fully was adjusted we quarter, XX.X% maturity. modest quarter year. income in excluding was rate expense debt items $XX the costs Net is tax net the have calculation flat

about is $X.XX, tax reduction for fourth shares up full-year shares was was outstanding or million shares. The QX This on year-over-year. with the about about count rate XX.X% same X% was million average year-over-year. share XX We Adjusted X.X million The basis. unweighted basis. an fourth exited XX% quarter the a on of quarter the EPS in XX

operating insurance excellence For hard cash million, the by flow of excluding the full-year, cash which for was growth proceeds Hurricane adjusted our Operating September. EPS $XXX was hit Myers cash in about XX%. year Fort Ian, EPS the center X%. quarter for of QX $XX.XX, was was in XXXX, in late QX flow was impacted flow down extremely

able were we invoices as we delays slipped caught did invoices from as would. these delayed Myers, getting sell and for now some we clients While Fort up. out service we into some are our Elections to of but January, quickly normally have in

CapEx quarter of and payments. laptop by $XX upfront our cash the in needs was an $XX costs CapEx cash Free million. growth catch-up for about $XXX increases modest for be the model with million up labor was business spend. quarter part important technology client led continues year-over-year, flow million, capitalized Free to flow and

net know, As cash we income. many you of free excess in well of generate flow

also EBITDA from strong. is conversion Our very

or cash partially a a rolling was revenue strong Free flow offset the cash being flow interest, on capital differences inflows. cash fourth basis. With as CapEx, and modest of cash working free margin quarter percent XX% by cash taxes

basis, net the of was of same flow XXX% XX% On cash and free EBITDA income. GAAP

end the million $XXX of fourth we had the of At quarter, almost cash.

Our debt was December $X.X XX billion. balance

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

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

sheet repurchased low of balance more of strong Our $X.X liquidity, and We leverage is rates. billion stock billion fixed effectively $X XXXX. very throughout than interest of with levels

will about as they refresh earlier authorized repurchase Board which needed, share this the billion share expect We repurchases. our We authorization now for month. have $X did

reduced $X.X by more shareholders repurchasing billion two have XX%. million shares that shares. past returned to years, Over than XX we we outstanding the our have by timeframe, Across

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

want XXXX. assumptions our the for base planning guidance philosophy details, I level providing to XXXX Before discuss and

and very provide Gartner research, value how regardless and we of For face help can environment. a clients for innovate they and teams and uncertainty compelling Executives challenges their continue prospects. to proposition and economic the recognize

and the approach discussed. for for as Our across or taken based a in uncertainty two. We've world plan and allows as tech and with growth more a business particularly of trends, the normal way we be phasing, would they our patterns guidance. stronger we've upside retention the NCVI demand as on vendors than closer well compares another prudent there historically, which guidance. the performed If We've is higher-than-normal in near-term level the reflected got quarter into rates, tough to outlook built Gene historical non-subscription to have

than guidance. our driving teams growth addition, in embedded In are on the greater focused what's

the XXXX appendix, as In part as of removal contract acquired years. CEB the well asset think million. Finally, for keep in from for of supplement historical $XXX earnings that updated week. please Talentneuron Talentneuron which and small as you divestiture non-core on XXXX, the of GBS closed we've sold the we mind we overall value CV for last transaction rates, provided a We about revenue prior growth as FX

the XXXX. are destination have conferences, being planned guidance we our for conferences For XXX% on in-person for XX basing we

return for expect typical fourth second the We to quarter. seasonality largest more with business followed the by quarter to the

quarter. XXXX, more variable. revenues, the visibility a especially first For strong highly seasonally of and consulting and very optimization as we usual. first the fourth based year contract into in Contract backlog on have the the We in remains composition optimization pipeline our in slower is had quarter half in

assumptions XXXX Our XXXX. for headcount base increases level significant from reflect into annualizing consolidated expenses

talent our headcount will demand up in last to what's more to have we more even line our the stronger opportunity caught is initial is plan, model on hiring with Our for teams. add great we year. plan for in If normal XXXX as than

more T&E this also normalize We year. cost fully expect to

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

with for both to future support FX current continue to be deliver margins. the prudently tailwind a will the We growth At growth strong modest full-year to in second expenses rates, half. manage benefit will the and

for we X%. is is follows: about least at as expect growth revenue Our XXXX $X.XX billion, research of guidance which of

percentage point growth divest year-over-year the of rate. X the to the Excluding effect adds

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

We result of is is billion, least growth X%. about $X.XXX million, revenue about of $XXX at which outlook which of at least The expect an for consolidated revenue consulting is growth of X%.

about from basis Excluding would the divested rate. points add business XX XXXX the to growth

mentioned, I've expenses As planning for to approach This we've taken to a flow. cash prudent applies operating XXXX. free and revenue,

least of at We expect EBITDA full-year billion. $X.XX

least EBITDA to deliver XX.X% than most able we to economic We be upside margins. expect scenarios. in to our at and If margins is revenue guidance, expect stronger

of million, guidance the XXXX. from comp up equity $XXX in Included is

EPS share. adjusted XXXX per $X.XX at expect of We least

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

EPS to offset shares, XX which guidance dilution. million is Our only based on assumes repurchases

first our All our of the XXXX, expect are for full-year million quarter of Investor least EBITDA. we site. to $XXX the deliver details guidance at of Finally, on included Relations

XXXX value the performance in XXXX fourth shares in quarter. strong XXX, by and significant Our of part grew EPS XXXX. adjusted reduction in in increased fueled XX%, continued Contract the

Over the we a past been hiring from heading into are carefully has few perspective years, demand positioned XXXX. our to and well top calibrated

Our continued year to in growth. returning teams investments long-term over excess remain time. double-digit our $X more in billion repurchased capital last sustained than committed shareholders stock our to We and drive will

mentioned, free to $XXX at we cash flow generate least million expect I in As in XXXX.

the initiatives. and from capital liquidity net week's divestiture for ample have we addition, In proceeds last deployment

With G&A we the With line expectations margins. growth modestly and can margin double-digit over growth. expand growth, gross in costs research will our deliver sales CV with XX% medium-term, unchanged. XX% we out expansion, and financial leverage, to model are Looking revenue CV growing

our us share deploy of modest continue can which as upfront. tuck-in count cash lower to we'll capital share the as the least paying over on repurchases, on clients of needs free enhancing time will benefits grow and CapEx our strategic value And our because M&A. We flow and fast EBITDA, at

the Operator? I'll take that, questions. back call over happy we'll With turn and the to operator to your be

Operator

this conduct Baird. we our first the question will comes Jeff from session. Thank At time, question-and-answer from you. Meuler Instructions] And [Operator

Your line open. is

Jeff Meuler

outlook the recent cycle Yes, what if could tech given you. think to the talk for you And and annual channels? there a is related of into, kind through channel? sales need Maybe resources for more or multi-year contracts? through kind functional reallocate and that, thank a risks you vendor on Just to an leader the of, plan renewals to some of those the opportunity

Gene Hall

Hey, Jeff. It's I'll Gene, started. get

we industry to itself, I'm tech those companies. think One, that technology like enterprise tech consumer the the we in going other start is as being is vendor about of different sort and the with as channel, and that. things So segments: And think two devices, IT

On large expecting et And enterprise companies they're to is the be consumers selling spending globally pretty certainly IT, to the cetera. multi-year growing during to ‘XX. sales they tend X.X% the that and IT complex annual that is technology technology the BXB vendors contracts robustly not that's about and enterprise we're -- grow reason are ones increases,

So the They're enterprise continued seeing demand are also IT. technology security, that's for to modernization. digital cloud, vendors selling that

at And growing much so tech general rate industry. are the than a those higher things all

for And still meet they I customers, digital when equipment. modernization the we survey is and well buying as services saying face, as consumer speed is really CEOs, believe important situation, things, their more economic technology that they to is as CEO's business of users, well situations requirements staffing end the the a offer. as this they're Their

to IT, that see enterprise about just the at vendors, ’XX. we growing the on X.X% enterprise tech summarizing globally have So IT,

to during worse On pulled the a because of expect going demand pandemic. and sense was a that lower we lot forward the demand there. the that's lot the to that's consumer side, be And recession device during be in

industry. of sort two And in cities tale there's the tech so of a

We those. IT our business predominantly So is the serve enterprise themselves, that's vendors the on just tech proportionally side.

we So opposed we shrink as looking actually that be device consumer check to XXXX. expect actually expect the serve vendors during and which forward, to we to okay doing manufacturers, to

as to growth. that's sells -- had from business growth into very results, [Indiscernible] that actually I'm a our -- teens we expect our Craig a growth. so went that And high sales force high sorry, translates technology own our teens low-single-digit we to vendor, vendors

actually they -- high-single-digit in growth. I’m So sorry

actually pretty fourth performed in well they quarter. So the

because on Going our go that enterprise pretty the is forward well again business business forward do selling major to a to we technology expect basis. IT vendors,

Craig Safian

flex And where we're ability your lot where Jeff, looking and the we and got at of down territory that growth, up and to question with those pretty and on we're optimization on this assignment putting the we've the team have territories. putting a always last analytics robust very is or agility part a quickly our territory of

our continuing accordingly. so to the environment we're business, of as growth And and allocate selling at obviously looking we're those the resources

very, last I'll and the very business a functions, the and that to then of mentioned outside your you is going our compare pull thing, GBS buried both the really through quarter. in to And was had, well tech in high-single-digit I it but the for tough out, question, the very vendors said, IT sort in And performed in as and growth full-year. QX this it IT of growth Gene had selling high-teens enterprise from

Jeff Meuler

it also Appreciate maybe was year-over-year a on the selling was and comment productivity quite Productivity I of, the growth, the acceleration channel. headcount of -- that. works look follow-up, us soft. further and anything I functional but don't metric say metrics, down to know just vendor strength you kind a in way does to quarterly kind tease at bit on like the understand, that but the pretty sales productivity leader just Can kind given And mix bridge down just you. year-over-year. if that Thank out channel, the impacts? because like tech XX-year anything help there's of

Gene Hall

Yes.

productivity from quarter the basis, to productivity. So year up saw it side as the deceleration GTS the fourth the a look end if the rolling really again of the results mean, again, is that held And the of well. impacting and well. the about way think kind at Jeff, user high-teens high-single-digits, you really, just quarter on including and four quarter, in I again And performed to really business throughout that well obviously in we

about mix ever we associates the talked XXXX proportion and and people In XXXX year, had. brought highest new had tender course we that's new up in best as over to think the Last sales force. start rather, the of as we have more hired we the had over more XXXX really we've the tenuring of of in I the getting course productivity going impact all we've the of We'll ever curves. see those the we to productivity. had obviously start benefits of XXXX, people

Jeff Meuler

Got it. Thank you.

Operator

you. Thank

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

open. Your line is

Heather Balsky

question. the for you've well. bit as a because well Hi, terms of about holds conferences like the how I thank then I guide, piece pretty your the a parts can know especially economy overall the environment thinking research seems and elaborate And call little taking up guide business, a side? of you if addressed you for in communicated macro I'm guess, first of for on tech those in you're imply business consulting, to my you're And it the that off, guidance. curious approach fair amount you during taking the center just prudent but the the

just So get of of Thanks. kind thought? to want train into your your deeper

Craig Safian

Good morning, thanks and questions. Sure. the for Heather,

there. couple think of I a So thoughts

first. So conferences and with I'll consulting start

strong backlog so two We trending good through and coming the in at of first strong delivery very of a business the very we year the quarter, quarter you shape. again, have, feel in And half also And XXXX, look the as in good really those really we position we the actually look again, we consulting fourth looks year, businesses, good had entered bookings the if a the off consulting, strong at based quarter. about visibility roughly but the there. very on that

or tech again, earlier really of out a I of and on digital programs lot get projects consulting are them and embarking the transformation tech think lot most embarking can't of continuing Gene’s value help our And a that. comments our the base on about still major client to -- sector, where team

On our contract. and forward great under XXXX up of in-person fantastic XX% significantly but from we've more the returning we bookings, revenue bookings forward, the team again, call, basically than in conferences as we year exhibitor what of already of Gene driving into job the side, side got has to done conferences locking mentioned, XXXX, and a the had so a pre

As XXXX, well. good as conferences we feel very into about head and business very, the so

there, very On function compares to have -- is We our side, our and we we're leader that to value perform great to for -- research well. have driving clients enterprise but performing and continue we do well continue expect the to business again, that we expect do tough continue.

thoughtful prudent experience We making magical fourth some of the don't have assume our that been our right high-teens the growth with to in quarter vendor return sure out and and clients just tech we about gate.

we're so And that trying enrolling perspective. use through experience, research prudent most quarters our a we recent to be by sure four making the from

business leader performing But tech again, function enterprise high-single-digits. at double-digit user strong, end very again nice growth The rates. still vendor business

year a were we ago. where from down Just

Heather Balsky

on are -- associates are, thoughts and follow-up with customers one-year kind in XXXX. you attract relatively and the environment of And tougher environment the the question this as sort a Thank into a a sort question, you've done, hiring young for you new you're follow-up ability with earlier the potentially a associates last regards of, you. to new say, environment who in And a of have force. your teams How to around sales this in? preparing going

Gene Hall

Hey, Heather, it's Gene.

So associates clients important most priorities train prospects are mission our today. the and we our with on critical what always

that's some issues to people's to is be the industries going of on be One going cost reduction. minds in

cutting of for money reduction. any train client. they're cost by very our among We're with And proportion to not salespeople They services. cost on, things small going clients a lot help other to so -- we how of can't our save a

in they other we multiples the of help of them what whole number hand, can On business. a actual for their ongoing save pay us

costs, labor continuing kinds single about [Indiscernible] own things, that that, mentioned technology in to automation to more that like often invest I again, in services the other their a just situation, companies, helps they and of industry. want And labor addition their it's [Indiscernible] costs. as every own to tough transition on most with environment earlier, are more digital even In in and

train on be how new to transition proposition, -- purchases, salespeople our that efficient they we the to clients both so more over to but that which get save digital, continuing money could So is actually sell value they to IT how also on time. their

together So good but the they're they're quite new where traditional it think, things, of effectively, combination we put those training at in -- of those you experienced the I sell terms salespeople context. productive salespeople salespeople, quite good lets -- as actually are skills selling our new of things how course, as not to broad and and in

Heather Balsky

for you help. the Thank Alright.

Operator

Thank you.

from from comes Morgan Toni question Kaplan next Stanley. Our

Your line is open.

Toni Kaplan

Wanted Thanks, on guide being the obviously, again. so margins. strong exceptionally year. the really to out XX.X% next And the start Margins in quarter, much.

had You've headcount this What's the sort on quarters, margins sort sales that really of going higher fully level? back let's guess, T&E? XXs drive say, low are to X.X about of I you of to level.

Craig Safian

the to it Yes, about from XXXX several bridge I Toni. morning, Good talking mean, XXXX with is the to for way been we've consistent last the think way about quarters. the

is paying associates load of so, and in of And the course biggest the new obviously, hiring XXXX. the the for XXXX the over all all annualization did we full piece it those of

our hiring should biggest piece by lot of So it. or was I the back-end loaded that's say. second-half of far loaded, A

uplift pretty And individuals. a cost annualize those so, as in all we significant of obviously, the annual there's

your to T&E, of element an There's point.

line traveling. to and And lockdown be. of -- we still XXXX, quarter of But were expected was mostly first part fourth in so, obviously, not the we're we kind in where with

the get few are a new XXXX, annualization post-pandemic. kind are the expect that ones of And there there, travel bit headcount the on of T&E and more in primary normal but T&E expense to other little the of incremental so, a we as side. And and two the nits here there's really we

Toni Kaplan

Okay. Thanks. the prepared wanted free couple about cash a below of helpful. So in flow. little you then I but takes on to and mentioned free free just I guidance why ‘XX than lighter be in ask Great. guidance was talk things the a bit the flow know And about remarks, came would any maybe flow also and cash the puts cash looked thinking?

Craig Safian

absolutely. Yes,

as the a did and we just caught is, to result end discussed a January, on what, delays bulk of we up are that invoicing bunch XXXX caught be of So my actually the all all XXXX. we up thought of which Hurricane. through out on actually, that. And able is get the of in in And into slip prepared XXXX, it some in the remarks, would coming story I

feel ‘XX we finish both the behind about all So that getting and good us.

In terms can numbers. be lot flow the cash there to obviously, of of XXXX, a free variability

look net and you roughly of free a guidance, what margin is is on flow it cash of with percent at income free flow as EBITDA as cash expect the free from is in line we'd range well. a the percent expect surface the cash conversion If the where flow GAAP we'd the as in

free flow And I guidance is performance. the expectation of line think sort flow so, the business and cash cash free with in the

that taxes. couple a there notably your I things do cash little think impacting potentially a of are ‘XX put below bit expectations, most it probably,

flow cash reflected taxes, So all earnings that into in XXXX free that's pay more in because XXXX, extra have well. of obviously guidance as and we to

Toni Kaplan

Perfect. Thank you.

Operator

you. Thank

come will William next Nicholas from Blair. question from Our Andrew

line Your open. is

Andrew Nicholas

good for taking questions. morning. Hi, my Thanks

one First ask on wanted just to was conferences. I

that would than ‘XX, at think all Obviously, in a prepared conferences running lower pre-pandemic. that's were XX remarks this planned bit in I your be what's there decent in-person. or where at and you point said you least

know conferences relative move the the an there kind to there. potential the over course terms talked of your just functional additional lines through of to the So next of for is ultimate for as different be year? update goal of to conferences years. in does couple about And on we looking strategy I Where ‘XX you've destination sit conferences? added adding

Gene Hall

Andrew. Hey Yes.

have our so functional finance, each as within applications each to So businesses, -- et -- also well that cetera, as conferences conferences major major and strategy think, cybersecurity I IT, those the now HR, the in in our and and geographies. of -- our forth. all of far areas for sorry, we're in is And from

do I which -- so quickly those can. actually as we major just the a with so, to said, attend we're And is operationally to -- want at And in point build have conferences. major a conferences, seat conference much and these that how our the there's for take we time region. these where it value because we us aspiration attendees, go add fast you long will We're hire expand every geographic we every what as these people holders really actually share count get by limited of our the -- and to to to conferences have a can

And so, that we're going continue path. on to

attendees, that. seat we did have ‘XX, And in very our also of expect We have we think we provide continuing can ‘XX, that find certainly, do expansion conferences, of can handle because during to an XXXX. in will -- we've the and the If had value we high they more, we our to again, our we prospects. as year, holders these operationally ‘XX, a as

Andrew Nicholas

I a for ask Great. in about GBS. And just follow-up, then growth to Thank wanted my bit. specifically gears more switching little you.

speak any the And different evolved have, about in GTS. couple talked things GBS, months there's out some or within clients if leader of, You either of negatively outside with can businesses to functional to over of But have the Thank quarter? relative call of individual last positively past kind that the businesses channel you how there there? you. to conversations evolved the

Gene Hall

Yes. We fourth the GBS. GBS had performance quarter. XXXX, including in tremendous in opportunity during great There's

things was as business, all we quickly rest in operational functional capture grow robust our that that to as we very actually. that -- growth areas had slower, were with As the really across areas, growth, opportunity. the GBS more internal had. And of We it enormous can

another a we than have one were area. example, for area So where slow in had we little hiring might

places was performance. internal on. very we're overall operational performance so, working GBS to more that due a again, the But happy that And very things little the more believe was with strong, we we're that slower, are

Craig Safian

for I that, growth prepared XX% full-year strong, well. underscore and growth off really XX% strong XXXX supply is to just both a in chain mean, again, mentioned coming really, Andrew, coming my remarks, I of were as years in And in HR growth. XX.X% of off Yes. full-year really year-over-year as above well XXXX growth the continued And consistent

and fact so, And chain, leaders across of providing really strong value in that finance, the demand serve that there. are legal so all GBS, enormous It's sales, the HR, indicative we on. we functional to marketing, supply of

Andrew Nicholas

I’ll back queue. you. in get Thank

Operator

Thank you.

next Our from Wells Seth from Weber Fargo. question comes

open. is line Your

Seth Weber

getting morning, customers multiyear down? how mentioned contracts? what costs Or can you you're environment come might you appetite that prior just perceptive talk better. an in to I'm pricing the where are? like inflation answer less to Thanks. think questions, in Gene, you starts And an manage environment guys. one look any and the for wondering good to pricing, if Hey, on pushback customers of looking about

Gene Hall

Yes.

item. increases factor. factor to or And some tremendous is you pay, ticket we've they it whether the accelerated can for So and value we better the we've these contract a price recent of a user And credible we the And company, to if X% Gartner value isn't that small provide from swing a alternative it's of zero an individual pushback increases The for cost larger-than-usual any swing provide. essentially costs had over it. our even clients or value. had, because for And X% past, inflation. spend a at look on say, I'd for clients the the have provide

though increases, rates. of, I'd had, even at higher price say, have no measurable pushback on we So they're kind our

Seth Weber

that still appetite Okay. Or And there contracts? multiyear changed … for is is

Gene Hall

absolutely. Yes, Absolutely.

multi-year a -- administrative prefer have the our again, it. It's of clients costs contracts. dealing they fact, ticket In with and many in item small

multi-years, doing people over don't waste And again. want this to procurement of not their if our the time because so, many, most clients actually and over prefer

from to And opposed around. so, way for the demand clients see actually as other our to multi-years

Craig Safian

And top founded a their contractual obviously, of priorities are on mission-critical by term. Yes. not that,

And so, mission-critical and they support want to have their that sure they support priorities. to make insight

seen on to our pushback multiyear all contracts. sell And no so, ability we've at

Seth Weber

-- compare year? does levels you conference prebooking this business. pre-COVID Okay. time that the for And for the then just to sign-up XX% Craig, of mentioned the how Can you

Craig Safian

Yes, it's great a question.

greater XX% I than what were actually we're -- the we significantly even said, on actually bit comparable pre-pandemic both a and metric. perhaps actually, little or So is than Gene stronger that

Seth Weber - Q

Perfect.

Okay, you guys. very thank much

Operator

you. Thank

Sachs. Tong question comes George next Our from Goldman from

Your line is open.

George Tong

Hi, thanks. Good morning.

XXXX more the headcount do of GTS progressing labor headcount in normal Research growth model. hiring will mentioned line you And GBS this market? growth tight level will in think Can in You with for discuss is and year? be given achievable you what the how be

A - Gene Hall

Hey, George.

associate are we we're marketplace. attractive in my a the we're want trouble growth -- I our to had accelerated about why so has place it's people a we place in -- hiring -- a to at all, go body We've very work. we much remarks. into drive the reverse which tough selective well. a And is no our actually that as -- for in our talked rate So as talent, employer When

work, to So again, place people an work to here. attractive want we're going

have value so, people. don't And any they so have proposition, hiring we great associate a trouble

Craig Safian

we capacity. that think just George, to rebuild recruiting we've I available way our and now on -- comments, And Gene's think, in recruiting the to about have building function ‘XX, ‘XX forward. And we invested and rolling

we those and people. go broadly As a out and more have selling Gene recruiters mentioned, for attract brand to associate great brand

kind of growth. points headcount As than “normal think the X points more X it to this growth lower with we for CV expect grow year, our in line algorithm” headcount is about where to we

in the and CV potentially if accelerating, to the standing the us a the given down. we we opportunity we capacity if our bit with little faster being said, given growth That business, breaks recruitment and market, see can easily our it challenges the gives have slow And see we there. tap go

So our plan -- a perspective. we've we the flex built real that what that line with but to in a normal comfortable with flex feel from demand flexibility us our is down also up model, allows given on seeing go-forward or we're or

George Tong

XXXX. you what a to guiding target? That's could And in follow-up, conditions least at XX.X% EBITDA as it. then XX.X% helpful. outperform Under the you're Got margins

Craig Safian

and major stronger, the cash primary we prudent potential revenue, on And in the that from I that's mean, on come we've probably And anticipate free upside. upside the margins, I does expenses taken the a Yes. way it. would would as approach that be revenue see we the mentioned the think we the way revenue prepared remarks, flow. to on in if

we're And We perspective. also are, investments really, of sure we're future seeing headcount, making all growth making can and that all of calibrating what we seeing the again, really the revenue from notably a are expenses deliver that that our sure right strong sustain also with expenses our but so we're we margins. into most

structural we are forward. -- modestly our than And we they we talk We're got moving could expand And basis we've significantly pre-pandemic. so, balance the on believe we about, a like margins right feel now. year-over-year-over-year higher margins obviously were as

George Tong

Great. Thanks very much.

Operator

Thank you.

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

line is open. Your

Jeff Silber

so much. Thanks

a we for the mentioned looks color Why sell What now? of kind bit that? divestiture own five it of it divestitures? You business. little about business do? get should other like we any on And expect that or Can you we Talentneuron the years. more It six did

Gene Hall

Jeff. Hi,

data, So we've provides we for to that bought Talentneuron people that companies, -- planning are when had market CEB CEB. done. have in principally acquisition CEB, was data acquired When that the It that got business workforce. their And an therefore, business labor companies long-term -- a is where we business. we doing should bought

fit day, it. depth. the we was looking of better the decided use strategic that a that of business at with at to that a it business it business the were end strategic And owners We've not is been than see bet lot looked we go-forward which As divested we looked ways looked innovative it We've us, it it, for for us. we it. could why a really basis, on at in and at we've to does our is

focus related which not that business to. on was in -- the just really Let’s core our HR,

we if them. would our things terms of discuss again, divest fit divestitures, core it's we when In other see We'll that don't those business, appropriate.

Jeff Silber

right. All Great.

name with Jimmy up Neutron. got I Sorry, the mixed

provided there In But read anything it? pricing mid nothing at giving slightly Are people into amount you cetera? terms on did of pushing back year-over-year. to you here, concessions retention, wallet data. reordering, take et in decline looking tremendous follow-up, or Is my a of it

Craig Safian

won't your comment for Jimmy comment. save on We'll I that later. Jeff, Neutron

we earlier consistent think business the as about overall of all talked GTS In the it's way terms research with well. of retention, I wallet again, and the business

is function growth. enterprise Our in of to growth high single-digit business the across leader seeing GBS you're very vendor just performed that tech the essentially, what GTS. wild from And very, and well deceleration business teens

in it's above XXX% still Even significantly with well obviously, really that, strong at client excess of retention. and XXX%,

slight there. business year-over-year or still performed a GTS in variance But center both basis and attributed underscore GBS very And in well business. completely tech the so, can core enterprise function quarter. again, I the the And value is the be deceleration the fourth to on

Jeff Silber

color. the Appreciate Thanks. Okay.

Operator

Thank you.

comes Manav Our from from next Barclays. question Patnaik

line is Your open.

Manav Patnaik

you. lender Thank wanted on the side again. Good tech clarify to morning. I just

you to said assume going you decel that did due that say come ‘XX, hear of and it's a think that's was it basically? to It I And you was high-single-digits? quarter to churn if I just how your business. grew I even curious high-single-digits. or for be going business was growing new

Craig Safian

Hey, good morning, Manav.

So the from perspective. expectation talk we didn't CV about a growth

of part the any business, provide that. For we or don't CV guidance anything like

in business for retention XXXX. to and fourth utilized inputs nature the and terms I new metrics, built our we've quarter that out and as extrapolate of things saw it's metrics what some think, -- the in of our we guidance expectation metrics plan for of as we again, XXXX, productivity the

nice on I just that think right it. selling in high-teens pretty on side, vendor lot tech particular, growth, going through growth. the High-single-digit in still industry is growth still now. a not We're there's obviously,

clients a way and enterprise leaders we function believe we value the across so, with same And proposition that we great help set that the even space, value of the mission-critical got and them to and continue for given in that GTS those proposition have that we'll we've their a in great GBS. priorities and leaders that serve products, help

Manav Patnaik

around the And Okay. the on just Got the then -- growth. question force sales sales it.

think points said points -- You of position. lowest X below you and I open to level guess I CV. X said

mean historically? be kind than even of that year's we the does this than the -- kind to So less were less is to of growth XX% much used maybe going

Craig Safian

Yes.

inflation, our is obviously, going had were catch XXXX. do grow points So overall call is we And That's X to not we -- X want sale. in on because But force forward our recalibrated that cost way we of stated of slower the growth. a moving way we that do essentially it, up. the is to back different, dilute sales moving the lot to And we wage points forward. essentially, grow CV to XXXX our model the model headcount, depending than model sales the

so, in And place we've for that's what XXXX. got

be And we see set to we needed. during slow yes, And not to up up question, accordingly XX% growth. CV mentioned, XX% will XX% or to George's as I headcount growth down as so, unless again, believe XX% it are we speed

tap to And capacity CV growth CV we accelerate, start to see growth brakes have And that. the to so, increase if as be slowing, can the well. we we we able obviously see if recruitment

from So perspective. really, we really we're a in like talent a place feel good

future and mentioned, struck right calibrating We performance. sure like are, we And margin the we've both delivering we for expenses. growth and and strong as growth making we're between Gene carefully feel investing I headcount balance

Manav Patnaik

Got it. Thank you.

Operator

Gene I like any And no you. I'd to further turn the lines. closing our am to Thank conference questions over now Hall showing from phone for back remarks.

Gene Hall

anywhere to In delivers from Here's Gartner incredible value quarter fourth across saw struggling being we've what agile again success. world, to of XXXX, the I'd like and business. to you changing delivered in By a adaptive take we away enterprises exceptionally thriving, between. of today's sustained or strong growth a record that the call. are

carefully We've XXXX. enter we with open demand as positions aligned and prepared well staffing We're lowest the ever. with levels of percentage

we any priorities. things mission-critical do right to today's to is the be in content successful Our And environment. know

to excess returns updating invest We capital today, into free far buybacks, growth, increases future. And We'll drive generate and for cash you reduced and future through of Thanks outstanding as again increase growth well joining us shares well to income. quarter. over margin the modestly we Looking net in our expect over we which to ahead, time. to significant shareholders return we're time. flow positioned forward next for even we look

Operator

you Thank call. concludes conference today's This for your Thank you. participation.

Everyone, wonderful a now may day. disconnect. have You

Gartner (IT) 7 Feb 232022 Q4 Earnings call transcript