IT - Earnings call 4 2023

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

David Cohen

Good morning, everyone. Welcome to Gartner's Fourth Quarter 2023 Earnings Call. I'm David Collin, SVP of Investor Relations. [Operator Instructions] 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. Please be advised that today's conference is being recorded.

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

On EBITDA for the as in adjusted to and release adjustments are our the call, earnings otherwise, with supplement. references stated described unless all EBITDA,

XXXX contributions otherwise. Our weighted stated otherwise. Russia unless FX-neutral, divestiture foreign exchange XXXX are based contract on quarter rates growth values and All to fully counts, unless first and exit. associated counts related exclude in growth and are diluted the rates for share are the All we discussed comments share to rates average Gene's references stated

Relations the section for website. of are Reconciliations we numbers Investor all gartner.com non-GAAP use the available in

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

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

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

Eugene Hall

flow Good performance value. contract Revenue, morning, Gartner in in today. delivered and strong expectations. single-digit thanks and above growth in EBITDA, cash for drove the free We another came joining us EPS high fourth quarter. adjusted

disruptions. environment. different impacted dramatically XXXX, Gartner enterprises ways. client delivers the world any incredible They experienced multiple in In value macroeconomic in

industries as defense in drove banks. High and polarization financial and capital-intensive health outsized regional care. interest supply spending, increases inflation effect as high Geopolitical an example, For affected affecting chains. and such industries rates rates while military such had on conflict institutions

Cybersecurity saw more significant more where getting the affected leap And work we capabilities of more became and and events entertainment or and estate a AI, other disruptive. in were complexity. stronger even shifts real and fueled live artificial attacks intelligence, how industries. even More people frequent, in which

every in insight and and leaders leaders know objective best They an organization's the for delivers Gartner and industry stronger actionable drive world. serve and decisions help, the need. the Gartner smarter need source know priorities. they is that enterprise, the every they mission-critical across We help who performance geography. We on shape every they got

the difference the make also leaders the success and insights failure, with Our we and between enterprises they work serve.

XXXX, practices into As move our the operational ever is strongest we execute consistently it's to best been. ability

positions We ever. have open the proportion lowest of

capability capacity world-class. Our recruiting are and

associate than teams proposition, strong value future. will performance higher well strong the our a and have which into tenure allow have to We in us XXXX, drive

be our profitable segment. to continues Research and most largest

and Our sizes market across is opportunity vast geographies. sectors, all

deliver In business we're proven to quarter, range a clients. more. external and of work, wide relentless topics, resilient optimization fourth Our execution of able environment. value remains our help cybersecurity, practices, we artificial the intelligence, to cost data a analytics, Through remote in complex unparalleled with including clients

subscription revenue in GTS global than at Total delivered fourth on value from rates. in GBS, the of growth in revenue growth function of XX% Research and more QX. enterprise leaders contract our revenue Across XXXX. X%. basis consolidated X% grew grew value X% revenue organic was Subscription an We contract represented quarter. double-digit

New leaders grew double-digit business enterprise function rates. with at also

GTS, CEOs, or product also including vendors, distinct leaders at IT. teams through leaders. teams their and serves executives sales began technology some Marketing the with led serves continue X%, Officers grew to IT within year, sector Global their Exiting leaders be improvements. and serves GTS see GTS to enterprise and GTS by channels. and function Gartner Technology sales we Chief contract leaders. to vendors leaders by and growth value Sales, senior technology affected technology dynamics.

digits. New high business with tech vendors single at were

and retention lead to business contract new expect value growth. We

XX%. qualified Sales, or marketing, GBS their business legal, Conferences source value and GBS, and digits. sales chain, grew Gartner up supply includes new more. Business contract finance, beyond IT. engaged had We a year This fourth Global in GBS since of teams the quarter. full HR, XXXX valuable was leaders was audience. and finish double extraordinarily in-person drove conferences and to first deliver the great insights we strong an XXXX. year, a

In spectacular. many up some and conferences or conferences, Symposium and Across near largest at conferences, our capacity. in held all ReimagineHR was IT QX, we our Orlando. were destination year-over-year, of Barcelona, with Orlando These including destination in attendance

Looking very bookings ahead and to to excellent. to continue be advanced be XXXX, strong feedback continues

helps an execute for important Consulting X% through results and the strategic optimization year. an work. saw We Research. to complement extended in of year. the is full Gartner clients extension initiatives our project-based their revenue grew consulting deeper, labor-based record full most Consulting growth IT business. contract for in Consulting is Gartner Consulting research

we guidance, across economic as opportunity upside. We range which view achievable and are with introducing XXXX for a geopolitical scenarios wide of

quarter and to in our strong another deliver whether the right and or achieved environment. the be incredible agile know world, are thriving we to Gartner exceptionally value, client clients We're struggling, any in things adapt to between. changing anywhere growth. We closing, of successful continuously In do

we're ahead, success future. positioned sustained continue Looking into well record to far our the

us long-term growth. value revenue to client proposition addressable opportunity Our sustained and drive market allow will double-digit

net free over expand of expect and flow income. We in modestly will excess we cash time, significant generate well margins

As return shares time. of we'll reduces for future and returns our outstanding capital levels excess over significant to we This growth, increases invest shareholders.

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

Craig Safian

a very good to morning. and adjusted well Thank we quarter free EPS in EBITDA, and cash revenue, than better you, flow environment. were continue Gene, as complex Fourth execute expected

growth full and X%, billion. billion, adjusted EPS revenue global Our contract diluted consolidated included year the free of performance EBITDA XXXX of of and flow $XX.XX $X.X $X.X of value for cash financial

we FX-neutral. as X% range We revenue of $X.X scenarios, are was for a opportunity introducing with upside. Fourth year-over-year XXXX wide and and billion, guidance, which achievable economic view reported geopolitical across quarter as up X%

cost EBITDA was excluding and EPS free million, the as XXXX finished We $X.XX XX,XXX with was million. $XXX result as XX%. the ahead was management. of of Adjusted primarily margin and was guidance, contribution $XXX divestiture cash associates, QX. total X% same addition, quarter up our In disciplined about the flow a

have value great a proposition. associate by a driven Gartner, across very team We compelling

Moving perspective. XXXX, in are position a tenure an excellent and from we talent into

grew quarter traffic. as the Research quarter X% reported Non-subscription fourth X% FX-neutral. shift and revenue grew a organic revenue basis. year-over-year an the FX-neutral in Subscription higher on to performance revenue in X% quality reflects

it and on to of action return research expected has have we will year contribution the revenue, effect with we increase While period higher travel. XX%, Fourth was new this as over drive prior levels quarter short-term time. consistent the expect revenue and prices a on hiring caught up margin

Contract FX-neutral full the CV as-reported or the the The versus gross increased the and revenues contribution XXXX, year For up research XXXX by $X.X for divestiture. was both XX%. is margin year prior billion at the year. end was quarter CV the first growth and value X% of fourth X%, excludes FX-neutral. quarter,

We expect new retention ever X contract leading had the month We business for December in in of growth. to a highest XXXX. indicator and, value new be turn, business dollars

GBS quarter, across fourth rates. GTS and grew CV double-digit the at from function enterprise leaders For

continued up quarterly prior single high increase the leaders business QX, from versus increased vendors digits in CV year Tech we the flat tech digits vendor in marking enterprise improvement in Tech New vendor CV saw function first with and XXXX. as the business well. was year-over-year QX. sequentially. up double about new

increase, net million. was Quarterly $XXX value contract or NCVI,

had of As We industry enterprise or vendor combined there we've has modestly. public double-digit notable single-digit almost is this single-digit growth size high of the across small practices, by Across was the led rates and discussed sectors. majority sectors, across all seasonality CV high The category, manufacturing which broad-based mix, sectors energy, sizes in growth the categories. largest the company tech our metric. in grew industry past, and regions. practices, at grew the geographic our

XX growth drove of double-digit the also in top single-digit or countries. We majority high our

billion quarter, addition Technology wallet quarter. the the quarter, even versus XXX% at GTS GTS Sales IT XX% the retention was $X.X retention increased versus the reflecting In business GTS historical new consistent leaders' CV Wallet for net end GTS function contract was of the enterprise levels. the increased last Global before of with clients. from fourth new million growth up year. X% third for the prior quarter, $XXX year. was fourth value

with leaders business to compared mid-teens enterprise XXXX. increased New IT function

single New quarter. tech in high vendors business increased the digits with

quota-bearing GTS was head count about flat year-over-year.

resources opportunity ago, we're With well years to the territory over few and ensure allocating the to we dynamic best moving addressable we as hiring we capture continuously opportunities market the positioned did positioned are Operationally, near-term the XXXX. well our introduced large curve, last year catch-up growth XX-year into a we planning we moving are up time. even for teams

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

quarter, for HR. with retention fourth CV the QX XX% fourth X% with value was end up Global by Growth $X.X associated at to was compared practices was The GBS up last excludes year-over-year. of quarter, rates. third head the GBS reflecting existing count GBS strong XXX% GBS contract growth $XX versus the divestiture. was our majority the billion grew year. chain, up our supply net quarter was headcount of XX% at legal the for quarter. GBS from and new This business Wallet million clients. double-digit Business the led of increased quota-bearing XXXX. Sales

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

to years historical XX%, quarter As quarter in XX seasonality. rates FX We XXXX was contract up in revenue appendix we've in-person. we fourth of data quarter, year-over-year. Contribution in typical supplement. X the was million, held margin do of each time, year $XXX earnings with value at the the for updated all this destination consistent XX% conferences Conferences provided the quarterly the

revenue basis which FX-neutral. delivered year XX%. on XX% For an margin of revenues we in record million, and fourth the XXXX, compared was XXXX was a contribution margin Fourth of million contribution $XXX quarter business. contract were the performance an XX% consulting with reported increase Consulting $XXX when affected saw high by Gross all-time was and growth mix in hiring. revenue XX% a million $XXX quarter, the we optimization in full

Backlog were versus was part on This X% strength. delivered the increasing our XX% $XXX FX-neutral last business QX We highly million year-over-year year of quarter. variable. as-reported million, Labor-based December of $XX continued XX revenue FX-neutral up in revenues booking an basis an million, contract on and with optimization basis. of is at $XX

half second up our the largest-ever XXXX, of revenues For quarter the QX. XXXX half second million, $XX in delivered were we when from of

SG&A increase FX-neutral X% and as in basis. year-over-year basis. The growth. a FX-neutral driver quarter was of biggest support increased to as Gross the margin SG&A of higher XX% our the reported quarter headcount X% was Full headcount XXXX. XX% X% increased the future in result fourth and year-over-year growth. was XX% an on fourth to basis revenue compared services increased of cost X% XX% reported Consolidated a quarter year and the consulting reported on up as FX-neutral. contribution in in

EBITDA $X.X modestly the through management. excluding debt Fourth of the XXXX of costs our interest is maturity. $XX million year the fourth XXXX we was compared to for due Net $X disciplined up higher $XXX was on million floating quarter was up Depreciation This was reported last the EBITDA million to million. down compared guidance XXXX. deferred full quarter cash financing billion, modest rate quarter income FX-neutral. upside quarter expense, million balances. a was in The primarily for almost versus $XXX to the hedged $XX and X% EBITDA expense fully year. our have to X% interest on in basis a increase over quarter reflected fourth

or net year-over-year. adjusted QX use in we rate of unweighted on the tax net XX% was quarter. quarter shares for XX that million full year EPS which tax last We the rate, the XX the to for The quarter. tax an of items shares the We in income, adjust X fourth was $X.XX used income for adjusted quarter. calculation is the The for XX% was X% with calculation year. about income a fourth the exited QX Adjusted rate was XX%. adjusted outstanding basis. with had about This compared shares for $X.XX million of The million reduction about

from modestly year, full the was adjusted up EPS XXXX. $XX.XX, For

in GAAP was XXX%. $XXX CapEx $XXX on compared up million, normalize million, the result XXXX revenue the quarter the quarter full the for of year. Operating of million. cash a to was full $X.X million, which for flow $X almost million, on cash increase and spend the cash up X% catch-up of for $XX for the flow versus XX% a year Free flow this been X-quarter last from flow billion, year. XX% year have compared down basis would QX $X.X cash year. as investments conversion to last rolling Free net for technology income quarter XX% was divestiture, was free EBITDA. cash Free a flow Adjusting XX% was

higher cash when is flow generally growth is conversion accelerating. free Our CV

from We to GAAP insurance a and items have divestiture. flow in X-quarter a past including supplement both shows conference free years to earnings XXXX EBITDA and conversion, the which some on cash unusual basis. conversion affecting had new X the the related slide rolling pandemic proceeds The income cancellations net have the

a X- EBITDA margin XXX% year. in and income about difference free from flow conversion flow cash typical expect We net between free to a The X-point is normal cash GAAP to XXX%. margins

of quarter, billion $X.X about of fourth the had At we the end cash.

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

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

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

liquidity, very Our is levels balance and leverage rates. fixed low of sheet of billion effectively interest $X.X with strong

stock $XXX going end year. authorization billion of December, for the had than for and repurchase we will refresh repurchases the quarter and forward. to $X We the during about the continue At $XXX Board we more the fourth repurchased expect million of remaining, million of full authorization

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

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

of help and innovate value The of clients how very face Research, the recognize and for provide proposition The challenges, continue prospects. and Gartner economic and can For we regardless environment. their a the third, teams they to uncertainty value; the outlook executives and compelling XXXX of ending revenue. Research is primary contract [ of factors: of X first, reacceleration; revenue timing performance growth function for growth bottoming a the XXXX the ] nonsubscription second, and slope and

revenue. research the consolidated was revenue, subscription of which with XXXX Starting XX%

during reflects guidance Our reaccelerating bottoming and XXXX. CV

to first calendar and growth. inputs revenue NCVI XXXX half quarter First are important

view We quarter for have tech taken a renewals. prudent seasonally phasing important because QX vendor NCVI of is a

contracts come bottom subscription our about likely of research tech majority quarter renewal the the value for some the during With contract growth up will And bottoms. haven't being sector's recalibration. X multiyear, revenue after

to incorporated continues was is than be consolidated perform revenue If X% business, in and better retention In part XXXX. new of The the upside our this there well revenue of would into about to needs plan, sellers into This traffic business for guidance. we've nonsubscription and find find lot best The buyers software of built a we a shift higher-quality help the groups. small for reflects the business value their both XXXX customers. help adds to guidance tangible outlook sources. the

shorter drive As the I term, revenue mentioned, it time. over affects we and but this prices expect higher revenue in to increased

For on our XXXX conferences revenue, we XXXX. destination XX of Conferences, are X% we about for guidance in-person planned is the basing which have

largest similar expect by XXXX, we the to followed QX. We seasonality in what with saw QX quarter

consistent have we've We good last very This historical what contract. revenue, levels. with XXXX under visibility and the is majority into with year ahead of of already guided

remains We've margins prudent and for way have outlook is has first as half on visibility slower sustained for remain part we of revenue, growth aligning short-term Contract which long-term also very pipeline highly had with It's segment. XXXX into more years. a balance this double-digit CV growth. was on backlog to variable. of strong composition usual. of based our quarter seasonally the best while We the the growth. X% and in expense first us for focused optimization about For the investing consulting, This several also incorporated the

consolidated typical level a base than seen cadence Our while. reflect a for assumptions expenses we've in more

driven a the about We the with merit even of as increases. thinking recommend of investing timing calendar expenses for P&L. view have sequentially, by are growth flowing campus and notable taken revenue prudent we We seasonality into the future

for Our growth to for reflects mid- single-digit our our delivering XXXX high headcount while margin on growth sales plan commitment for to invest future targets.

rates, XXXX. to for go We how other like depending growth tenure out, have approximately we CV to recruiting At the capacity and growth in have the year year. support current the be neutral faster full levers to on will increased FX plays

Our follows. as guidance for is XXXX

guidance least growth Research recalibration expect business. $X.XX a of the for is of and The growth part We NCVI research performance about prudent subscription of The digits. the high in revenue revenue of at nonsubscription reflects FX-neutral revenue reflects single X%. the which billion, guidance plan

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

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

$X.XXX at billion, XX%. in EBITDA year an of full EBITDA results expect least margin which at of We least

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

from This we of expect above billion. For reflects $X.XXX flow net at of conversion a free least GAAP income XXX%. XXXX, cash

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

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

a repurchased opportunity double in introduced upside. stock We high performed tech We eager our X XXXX billion continuing enterprise year we past Global grew remain despite shareholders. $X the more the exceeded EBITDA $XXX CV capital EPS our performance Revenue, vendor than in achievable than million during growing function and guidance market. with with digits. to uncertainty well and more global We return macro this years. digits to CV and expectations, for leaders dynamic single in excess and quarter,

opportunistic be price disciplined. to sensitive, and continue will We

to time deploy M&A. and share XX% modestly cash With our gross repurchases, least upfront. the our because count expectations lower Looking and our paying our value-enhancing in growing EBITDA strategic needs which with over tuck-in of clients about share of on benefits model costs capital revenue the And expand sales on G&A margins EBITDA the continue as fast are unchanged. over grow can XX% we financial as at will expansion, modest and double-digit over CapEx We medium CV us line we will we'll term, leverage, flow margin growth deliver to out and CV time. growth, With growth.

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

Operator

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

Jeffrey Meuler

in but been interpreting cyclical want headwinds you're responding drive dig the I Just higher-quality I non-subscription year, huge it like to business, recalibration. I know need it's seems previously And know now more headwinds. as and first. operationally weak it's on research to that more but was a not traffic. for all like

the terms So know guess, an if now there in just I review improvement. the for like was of don't opportunity I I a versus why business operational cyclicality where guess, of or, there's business

Craig Safian

the I'll it and as will start, Gene for thanks a give question. Jeff, then in well. chime

full and just adjustment. In reviews And nonsubscription is pressure the And the sides to was and things was with mostly pressure I stable providing them And manifested always year. we we we're site software that think the revenue. more one out both learn And that. on XXXX of pricing tangible throughout offerings, results the these mentioned, saw highest them is made about actually the sure are -- adjusted Obviously, both value, for had as the and and And we tech facts, buy, year. starting equation. that so and of making sides the way again, with matching the things sellers. QX good of then of QX, on We that equation. nature, what with the news coming coming help essentially are to through has X% research our ratings focused real on that to business to the we're full about been of business of itself -- part small value we earnings. we are buyers pricing market the we though, the of have our roughly we since to

focused more always driving value for on even clients. We're our

drive we've things over for good will short-term the higher-quality we is prioritization done for pricing of higher on term, is sides this equation, and to forms And But everybody. revenues. focus our good one so impact the higher long of revenue, really on traffic. time, which over shift both think again, And which clients of will the drive is

guidance one traffic. I on about focus would real we've in But is higher the modeled just thing the say quality

expect in the not that in that We manifesting real want long to in, We over reality. see actually modeled so that to pricing. have the any happen. uptick Again, term, not itself did we we in model

Jeffrey Meuler

of retention better environment. you've new lag how the talk takes clear I renewed then you loud business typical just tail for more and similarly just when retention new has And the vendor seen like to the improved. Okay. that prior like you're inflections the sold yet more through the on on difficult Or tech time trends. business, a long how tech not in thinking Maybe hear in kind vendor, about what's trend for from it

Eugene Hall

Jeff, it's Gene.

issue comes lot or for a they those X signed So biggest have is of markets that have for a a vendors the one ago, multiyear changed now. have And getting vendors, tech -- have tech up year the small X- in when are and funding. we in renewal, small any X-year difficulty vendors don't if or that funding they and they

out business. fact, in cases, In of many

is in happening in so of that tech terms what's that's biggest the retention. And there our drag sector

are seen, of you've as companies, larger thousands of people. laying off The tens

haven't restructuring. And so finished they

As we mid-single up in the sector, business is overall tech digits. new mentioned,

a and the of very And just way, today. these gone funding. thinking side through so follow are signed still that -- companies have they now it's And that a once we we're since our company robust indicator different the agreement by getting It's business retention of business. a that way these -- work out will very particularly leading that's

Operator

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

Toni Kaplan

to beyond a remarks, The line new and similar tech the last on prepared the vendors. Actually, following business around question. commentary is in maybe this

improvement Even So new vendor sounded very in tech the in good. general, sounded new business just enterprise the good. business

know year. to that sort in starting flow prepared could value risk I see if value. remarks an that wanted next few shift is inflection the to that quarters, through expecting to how there expect of that you in the of and contract this you're anything Just quickly to -- sort that mentioned understand contract a could you was in

Craig Safian

Toni, thanks the for question.

out lay facts. Just the to

end part grew new vendor business prior rates. over of grew the part function enterprise of The CV new GTS business, at and GTS, XX% or user business high year-over-year, business. point, was new leader on GBS mid-teens single-digit your up to So year

saw strong as mentioned, business the we what's actually market view results happening all we the we sell markets moment, in indicator so fourth into new So for a a we to the real business quarter. of in in And pretty as new across the speak. leading

so to And we in from from to actually saw again, continued a QX, new first modest XXXX business in tech QX That time the growing QX. improvement for in with QX vendor the fourth quarter.

pressure As function and our remarks are Gene business CV you alluded combination as still a of as well, a fourth And recalibrate, market. NCVI small it, still part about have to And know, touched talked since growth of retention. or sector to started vendor to question, the a and lot the and on coming of touched of of third, renewals still retention response that of tech new tech lot prepared call lot haven't pressure, in the and that in been this we Jeff's in there's also of quarter we really haven't a the been XXXX. renewals

of retention little still So a pressure. bit

business leading reaccelerate view to we as during to that's gives us bottom a XXXX new and to And during as definitely of that part we expect again, CV say what confidence However, indicator. well. XXXX start

Toni Kaplan

X seems to like has was 'XX? just earlier like And a I just headcount. what last of below to then guess, expectations about understand wanted wanted normal the growth a know of year there -- lot in a follow-up, 'XX. to I quarters The for levels. headcount sense. about -- catch-up been Makes for are headcount slowing ask growth in a more little and bit in prior sort And I the your it

sort Or the of of think margin? I to it, that an So saying I there's headcount but opportunity, growth wanted indicator slower seeing is manage less below-normal don't levels sort now? I you're just -- guess we're that guess, understand the headcount is helping -- there's

Eugene Hall

of now, have of on capture years. Over really intend the that of retention Toni, faster capacity as grow at next can as over team have time Part headcount capacity selling we of that's we market right believe growing grow strategy our a depending there's to selling our That today. actual capture the the So slower opportunity or in market headcount embedded we have. though, potently capacity enormous many the And to business. our kind be opportunity. we very core opportunity a we going growth to look it actually to is lot it. We

Craig Safian

mentioned And prepared And we've prepared faster. plan GTS/GBS single dialed mid- headcount growth our always, to during digits. as actually we go remarks, a got high into of we're quarter-bearing as our combination to

if have As to. and capacity we we mentioned, recruitment both I Gene want go faster

well. So we've got and mid- as see we GBS coming and rebound quota-bearing we growth faster dialed in go to single-digit high can in headcount, faster that GTS if

Operator

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

Heather Balsky

I was muted.

do us been something of there, material about. what renewals any control that companies tech are? nothing Sorry the under, can just you ask can you have that's but and about you that. if obviously, curious you, are there's I vendor the there And on and wave wanted are in -- perspective help to go back renewals on how to know can front. side the going I investors

Eugene Hall

look it's the -- a companies the kind slower you if little renewals because, in market, Again, at of larger people. off are again, normally thousands than going tens of they're of usual laying

by will expect Again, demand. There's to grow to expect X% we global almost plenty We trillion. $X change. initiative of that

So plenty of demand there.

time, over that normalize. expect will We

on on from real on there's focus what But you issue now, over tech going time, a shift us. I for are, what real get now market is AI. these those which a the so very mentioned, there's great through vendors funding And funding a small retention is, as

successful funding which taken funding part so in companies days business, that And affects these have the segments those of are retention. a our less-popular case the retention [indiscernible] commercially, for get our and as in

Craig Safian

where we what it of in through and combination are modest actually macro what the always clients, does value And back larger embedded, modestly maybe presence other coming help Gartner tech than pretty we'll we maintain or seen growth would business add, we significant the then then growth some from or or less macro and still do the And tougher some term. that back is delivering win environment. clients, our what environments, buy a spend, typically, reduction there sure retention Heather, long we've but perspective that's they drive over the and on renewal we And but to that I'd just to huge always. is or sort of otherwise, vendor cycles; cuts see of grow see that out thing mix a normally business win to make a take tech stay normally

Heather Balsky

just And probably to kind tech in the same Based the over XX about you've XX thinking of your Last quarter, that? normalizing still what talking fourth asking version quarter, in CV on you about said you talked Is already saw on normalizing. you months. how of that then side about were another but outlook? question, vendor you are the something

Craig Safian

is reacceleration. in that our or Whether to it it this view actually it's that to line strong. this We see XX XX, are But medium-term or believe can we months of of the we So XX believe that with see time. grow range X -- that XX market here reacceleration on going still long-term We business the objectives. is business unchanged. segment over still in we really or will be our

can't offerings with our to drive why growth, clients XX% XX% value medium still business. term, the this there's strong for consistent our Our over objective the this medium-term no back And for to reason segment. get really huge in

Operator

from with line Fargo. of Seth Weber Wells the comes question next Our

Seth Weber

of a down about just it, your revenue the maybe into clarification. that think way baked digits. double growth nonsubscription Is to think first, kind right -- it a guide, what's you research about model? backing I I think talk of down like your into low implies When revenue

Craig Safian

the correct Yes, Seth. that math, is

You it. got

Seth Weber

shorter? from just tie are to the just bit? business strong, these sentiment wins, Is your customers? It cycles hearing on little then new seeing And are wins all and together the things trying better seems just sales I'm -- with your the really getting are just business guidance. Or like you productivity frame function comps actually are Okay. just easier, is strong a that new better? you of that mean can or a is I

Eugene Hall

Yes.

have So is say value first I'd a strong proposition. we

And the offerings, so buy. our want they value from they get when clients to see

And that's in impact have done, driving -- sales have. that what things that as the productivity. tenure focused there's his in remarks, as on that's improvement mentioned then tenure And modest on fundamentally that, -- as top the we things affect tools well. process that having always We're we're and of And Craig things well. what's we So can demand. like

And have clients is because so get for the it need demand driving value for to thing of they really services -- our the on fundamental them. to intrinsic but

Seth Weber

at changed sentiment quarter? customer it anything here. of has -- the changed? over the sentiment cycles for has Has Or business better? all wins Or acceleration the But call last have gotten sales Right. new out you'd

Eugene Hall

environment improved XXXX. selling of throughout sort modestly the say I'd

Operator

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

Andrew Nicholas

as to driver artificial touch front. was I at a wanted business. topics, intelligence the on of the you I outlined new one of Gene, realize it that

an of that relates to about new Just as there as AI curious, to new landscape, it's business. or I specifically any the ever-evolving is even from topic new driver any new clients. but I'm boost or there's conversation maybe if kind part it client wins just subjectively been business, notable wondering of boost in understand cross-sell, of tech quantify way of talk kind

Eugene Hall

our all Andrew, know, the areas. lot they last variety a of over a publicity of get wide value has we had areas as you -- and those year. serve of AI

-- so And media, et is throughout cetera. there the

It's clients' just interest is businesses. demand an or interest cover that we area our in. how clients causing help I'd And there so like of the things that of that something. unusually -- our clients say affect an that's is high one it It's we is other understanding an AI extra XX% what have stuff it's like things and of not level the the could with.

that clients cost have on Just opposed AI. cost just problems, to optimization they're as

the of demand. clients, on it area depends of of So it's an certainly but robust kind individual situation

Andrew Nicholas

conservative. an range think guidance upside you across that economic quarter Great. you and the for guidance. NCVI half of opportunity and wanted are on my was and in your I achievable first Gene, just had CV And follow-up, important you've press that been the that a said first hone in then I scenarios. inputs I growth of for to recognize release, part wide

from upside us assumptions in it for bottoming together, for all And just about fair growth the to underlying assume there Or think pieces is some other So is happening these half way that that be putting CV would in then to the trying us earlier? is second your guidance? to there?

Craig Safian

I contract will is think which the revenue to to revenue drive impact the recovery. big of going know, NCVI revenue. always as flow the run QX, you on and revenue, revenue lag to and on the way but that, XXXX think CV guide great first QX XXXX for piece, cash in research segment subscription the value about half minimal to the on And the great and than step-ups and are revenue, or impact our a the top revenue out drive future have have changes going bigger are obviously, and

not bottom nor our of a for and of of that course the we have the to outlook but pointing revenue CV reacceleration are So bottoming or is, number to guiding XXXX. a over we're the a that we year, specifically into CV CV where baked

Operator

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

Brendan Popson

Brendan is is mid- your about Manav. back growth. on guys CV Obviously, new pretty single digit, how double-digit high getting is to you QBH want think your for just if still ask strong. business to to This I

that? do new will, time? QBH? you seems higher of Is Or really you guys think wallet that, kind more from over kind actually So even expect just like just of it like a about it productivity, business do away I goes retention, it's for issue guess, now. cancellation how Or that if you

Craig Safian

value right impacting value vendor the business. contract biggest mean and the I part Brent, now tech the growth contract of thing is

mentioned, part enterprise XXXX. we has as growth actually grew our double-digit fourth so business function the in and And of through course quarter consistent leader the at of grower rates the been double-digit a

you is growing function which double-digit of vendor more growth at prepared CV, X.X% as of portion And of value was in flat total reality contract is mentioned is tech we for that leader the remarks, the XX% essentially overall business, if enterprise year. the the than business, the look so portion our growth, at the rates. And

a of total CV. the business, than so tech impact vendor of less obviously XX% overall CV reacceleration little we That again, the is on growth. see start to has And as a an

obviously our is super think hiring I we course is up that piece important bit of caught on quite the other XXXX. a over The

And so early what very that people meant is, over Gartner the careers. course a sales of their in of XXXX, we had lot

And know, tenure as up increases. come as you productivity curve, with their people

of rebound perspective into XXXX confident importantly, provide probably, the our we capacity sector so amount curve, and feel a up got enough more heading the combination given selling right we've coming And from tenure GTS/CBS of And should in tech and XXXX. the fuel, growing that that XXXX if salespeople and XXXX into as high headcount, during that's accelerating digits about single we're you value our mid- sustaining will, to and growth we roll really contract to growth XXXX. that drive

Brendan Popson

Okay. can And it's well. rates then any still us just within growth call-outs GBS? you Obviously, or performing pretty give

just So can color any anything you other -- give us.

Craig Safian

segment. objective growth still it's mean our medium-term growth within and getting XX.X% base, bigger and I the year-over-year bigger sustaining Yes. for a or so XX% and bigger on

to of be and mentioned But XX% nicely HR fastest-growing for on to are supply register my I As segment. have chain, prepared pieces growing a CV the year-over-year all X pieces obviously, growth. us remarks, legal the

Operator

with from Chan comes of question line Josh UBS. next Our the

Joshua Chan

you are But here. guess know vendor tech it I NCVI. emphasizing like the you sounds don't I more or CV that guide to dynamic trajectory renewal

impact being than to calling way the that rationale are Could just that did. you an there dynamic I that as more of out So normal? specific the of behind on interpret kind you QX we guess, explain of

Craig Safian

Yes, great question.

not as always about -- associated past, speaking, tech we're skewed in This and dates more one, a huge bubble just vendor looking contract talked at actually with pretty contract bit in skew value we the year, have a than So in the we're average but year. the a first our of across little a the with quarter. little that. clients generally and And evenly of we've bit end

want may next sure that so We of and heard know up. prudent our prepared performance use our our And have you most times about quarters couple recent several what during just we word remarks. us guidance make the reflects the to coming

account. to And we've NCVI view into prudent so take that a our taken first on half

I'll CV with reaccelerate again, expect growth said, vendor do -- reiterate, to quarter and even That first on tech during begin overall focus to that bottom renewals. we with XXXX

Joshua Chan

CV, mean seems cost about I spot. the appreciate you can That's in to year-over-year? helpful. structure really if I drivers different talk growth, there. the you the Okay. I revenue good And have positive reaccelerating to margins. shift Could a you over margin color of be have

pluses more than are margin that guidance? with reconcile And how So there the does minuses?

Craig Safian

growth you about with merit about of in wage and that combined the think we've growth aligns or the which growth if with in up and GBS to bit digits the mid- Sure, about Josh. GTS that, that way is we're normal combined elsewhere, think headcount in single targeted year-over-year, with and inflation The place operating conference at got it growing with guidance. implied growing X% expense conferences headcount a the growing only dialed high that but the business, it's look not guidance, X% simplest and actually little our to

operating years, "normal" prior et catching signed up, And more in cadence to much et and cetera. expense so compared cetera, a we as where XXXX of we as mentioned, we're

our build normal of So a more operating much quarter-to-quarter expense.

question, our is value that drives biggest -- the contract thing obviously, XXXX. recovery are We as revenue And for the the for value. ending will talked revenue the lag in we Andrew's about XXXX on contract

other sales way and investing is again, get for so we're several was normal pointing back the been but our this cadence for force future the XXXX, reality which is going growing to quarters not And that we've be going on to the of growing -- guiding, and last the areas. and our this for reality

overall CV the through for an impact We revenues. Obviously, are the revenue on obviously, as well. that dealing XXXX has revenue with mutes XXXX. also the deceleration And performance nonsubscription

guidance, there. our medium-term strong the had we're about thoughtful Consulting such given does while within which, we being optimization, As contract still a growth rates growth rate, the in year

line And so all those I with, it's XXXX bit the consider, the factors guide. into little impacting operating a growth "normal" top what of baked expense of would

Operator

with LLC. line Our next Thind question the of comes Surinder from Jefferies

Surinder Thind

call would Like economy, would what what think at guess I this big your at get the strength aren't back, do look on and they Just if what more are looking of the relative I for a tech picture you why in the side to we conversations, this clients And taking the commit? point? them the spending at step point?

Craig Safian

-- not ago. but a on have may tech X think it's places on the a market also healthy down really Surinder, have -- a really or things funding flowing, and to Gene to that recalibration, X about, combination is of end actually where or side, and small recalibration year the it's we been the it's the so tech same I there that flowing I say the talking So of it was when business of the

so we're just the going money with dealing is And where again, And that. after fish we're the are. we're where or the opportunities fishing

challenging of are months tech there that is jobs seen, of you've completely cutting it or almost selling since still if they large sector a happening would year began, process and little into XX they're as thousands even more the layoffs tens But of they be environment a recalibrated. in when than

the business. to I be They're as But a help and in just for but still So are to We're there is prospects earlier, mentioned still long-term part to We're provide. very recalibration. we're the them We're little going they so win those us. of are confident for huge I in important still significantly the that along clients they come the driving through value bit we It's recalibrating for the this still medium-term to we think for growth confident, fact clients. take value and or as we're ride, time, of in. speak. going

Surinder Thind

it. Got

Eugene Hall

going attention to the to whether, fact, that get layoffs, they're going making to people's into company actively Just lay they're or selling on off. you're laid in focus who off add, is when a of

normal. larger [indiscernible] -- to and while little the Craig a and kind of the takes it so get through well. that's that's They'll tougher will a very environment. return That's much -- And described tougher that

Surinder Thind

a firms just changes there's guess, they're and or willing that about Got just decision spending the you about? more something your that that thinking if cycles? PE/VC-backed the things? broadly than that about in it. more, I be being of as clients think cyclicality so least kind advance is Would more all aware that so thinking, And pivots other of to think ecosystem, quicker there then make at guess or of Is business larger strategic business today in be potential of of these more we serve, we at they're or so structural maybe part we there should or maybe the I arguably or prior you line reason perhaps now, should volatility

Eugene Hall

our of So happened nothing of spending. tech pull the it. forever, companies, What forward a perspective The probably is to last to the of it was there's tech during structural going assumed turned most there pandemic, about that tech was was them, -- pull out many forward.

as that. normal. Now they're adjusting it's to to simple as getting back And just

good cyclical, So I in shape. we're think pretty unless become pandemic

Craig Safian

talk When the Surinder, Yes. think, the I sort opportunity, to opportunity. on or we that point. focus underscore of market market I'll just overall about business also

$XXX opportunity, that billion is tech the of of $XXX So market vendor roughly outside opportunity. billion

really function function out very a but across the serving on $XXX big we're opportunity. So billion market the that $XXX-plus in strong of that focused and vendor is market, tech reality market prize billion GBS. confident billion we leader opportunity opportunity remain is again, GTS leaders enterprise And that the enterprise of market $XXX

Operator

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

Jeffrey Silber

year? price about providing the extending is the as put you're environment, in for multiparts. with what have of Can for in the the it's any increases late. you remind this can that pricing pushback? doing ask breaks you I one, know term, something length Are I'll getting well? been just some we you us And just space others talk

Craig Safian

Jeff, thanks for a quick question.

lower down pricing A over a which we've little is most of and down 'XX We we X%. we come in than little side, inflation price increase a because bit. the wage it. seen we're typically November our come bit, little did On bit this inflation when did do importantly a 'XX, in largely year, little what

in around we're so X%. a than more bit X%, that And little

on are magnitude, spend client of clients, is, Again, think pushing by order it. and I $XXX,XXX. not per back large, remember, average the

X% is increase So X% the between or minimis. de difference a pretty

making sell and services continuing -- our real on multiyear and have and value and We're every year. we're sure continuing a sell on we more that. with and our that very incremental we're on And that. again a contracts, And more focused focus focus to to products invoicing each have upfront

And we so pricing multiyear making drive economic that think our a but say, huge we've of job is our value I'd little yes, corrugating the we to phenomenal have sure sticking for has stick done to invoicing guns guns, things sticking a business, managing and tougher, I the which the teams been know there. discounting our not the get been to done upfront. And on our to contracts environment

Operator

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

Keen Fai Tong

especially are renewals of there. compared How help Can other that? there little much concentration important to vendor tech XQ mentioned because quantify You is bubble you year? quarters in a the

Craig Safian

Yes.

CV. mean, the the vendor of on overall franchise. -- of mid-XX% again, low of I remember, less QX CV. I represents tech than vendors, to XX% CV renewals think overall our in This it's a bit more little Normally, year, is XX% a with little than total total tech

bubble, quarter. bit it's little an a of not just more it's in So than first overweighting the huge normal a

Keen Fai Tong

major to upside you're driver And as guiding see then that to helpful. year. XX% do it. target? for EBITDA of That's the of margins Got What the you potential

Craig Safian

margin potential upside revenue that the at for upside this think drive from George, I biggest it's point, XX%. will

is April was our merit X. years. few in again, back me it I question, the for can't As for question it kicking on -- normal has territory our whose think we've about forgive We're planning. more growth last We're normal I the term, more been back -- this Josh's than remember talked using was, OpEx increases on it on

feel I plan feel so And about -- we've really OpEx the got. really we good

the various a And across that be think margin upside revenue I business little potentially upside. place lines unlock could the of so would bit

got this, from perspective, I and again, capacity and doing if we said, That both a are we've revenue recruitment Gene faster. to better alluded to go

'XX sure And up to strongly perform in really want make but we we so to in and only ourselves we continue not are 'XX. XXXX, well are to that setting doing

we're the on and headcount take for little to if GBS bit sure. have to And go we going that GTS growth, opportunity so a opportunity faster

Operator

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

Eugene Hall

in incredible environment. So in changing here today's strong be or our and for are in another We're value whether anywhere adapt deliver any We we to to thriving exceptionally the continuously performance between. call. the right successful and know clients do takeaways drove QX. things are the to struggling, world, natural Gartner

Looking our for ahead, we're well record future. sustained positioned to our continue ] of success end of [ the

drive to and market Our client revenue value long-term will allow sustained proposition opportunity growth. addressable us double-digit

We expect cash free expand in time. modestly significant net And flow well we income. will generate over of excess margins

we returns time. significant shares return and outstanding capital future our growth, we'll for to excess reduces shareholders. As of levels increases invest over This

to look Thanks for joining updating forward us we again you and today, quarter. next

Operator

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

You may now disconnect.

Gartner (IT) 6 Feb 242023 Q4 Earnings call transcript