IT - Earnings call transcript Q2 2024

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David Cohen

Good morning, everyone. Welcome to Gartner's Second Quarter 2024 Earnings Call. I'm David Cohen, SVP of Investor Relations. [Operator Instructions]

After comments by Gene Hall, Gartner's Chairman and Chief Executive Officer; and Craig Safian, Gartner's Chief Financial Officer, there will be a question-and-answer session. today's being that advised be conference recorded. is Please

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

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

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

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

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

Eugene Hall

and environment. flow. a ahead Financial delivered Good today. QX, free profitability thanks results in were second remains complex value In the and of quarter and grew morning, for cash we us single for joining contract strong resilient expectations, high digits. Gartner

Leaders more challenges remains volatile than and ever ambiguous. across enterprise every face environment simultaneous The before. uncertain, complex external and

with The technology persistent funding impacts many the interest of AI. chain sector; continue list in public generative on. higher companies are deal rates; cybersecurity industry banking challenges; For potential threats; impacting supply continues are there challenges goes face to small budget example, industries; the shifts to the

need smarter they stronger best on need know and actionable drive to know Gartner teams their and they help. their is they the achieve the decisions for insight source leaders Enterprise priorities. And mission-critical performance objective

proposition and Our save risk, teams time, our money, achieve their develop clients gain manage success. skills, leadership save enhance value confidence, helps to

to largest continues profitable be most and Research our segment.

serves business enterprise in every industry Research leaders across Our in every of functions all geography. and

Our market opportunity XX%, Within grew business, vendor enterprise and clients leaders Research is returned our tech vast. growth. value contract our to function with

topics, recent and cost We optimization, guide of including continue chain wide development, to through CrowdStrike AI, manager outage. clients the and cybersecurity leader a supply range generative optimization,

proven are value, we of relentless anywhere our unparalleled execution deliver whether or clients in practices, Through thriving, between. struggling

serves Our through our their sales channels. Research business teams executives distinct and

grew GTS, within Contract or X%. leaders leaders single leaders GBS, XX%. IT. with finance, legal, value or and new teams business their and more. GTS business high grew IT. value enterprise Sales, serves sales Technology HR, value and grew function Sales, grew This marketing, new GBS Global GTS digits. Business contract grew their beyond Contract includes XX%. serves supply X%. Global teams chain, GBS

audience. Revenue deeper clients Consulting to qualified XX% conferences complement Gartner quarter, execute extension Gartner Research. is XX%. for the Conferences and our grew strategic Consulting of outlook grew an helps business. initiatives Gartner and their work. important to IT strong. an the insights deliver most in valuable is engaged an revenue through Consulting Consulting extraordinarily second remains project-based Research

that clients. to will double-digit sustained we every of are the better, we of long-term get at deliver unparalleled the committed faster, to And one fuel relentless year everything best value effectively We our as heart do. driving growth. teams our team to because execution People work are stronger practices

financial expectations. with growth value function enterprise delivered delivered Gartner We ahead of contract closing, In leaders. results XX%

We'll growth. us growth and proposition to market by future clients, double-digit addressable continue to for our providing investing our share and actionable returning for value allow to program. our insight will opportunity objective prudently long-term value to client create capital Our revenue shareholders drive repurchase shareholders our sustained through

over free of modest net continue We cash and to margin in expect generate excess significant well time, expansion flow income. we'll to deliver

us All our the of of this sustained and into more to record future. far positions success continue track

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

Craig Safian

Thank you, Gene, and good morning.

in We value first the from in for quarter-to-quarter, this barring about or but CV points year-over-year, meaningful growth the bottom overall may Second X.X% expect accelerating will from quarter. the contract basis quarter environment. be X% higher geopolitical delivered Growth marked we trend a believe the grew XX the first quarter from shift cycle, vary we the macro QX.

GTS Over both XX% the to grow to medium expect term, GBS and we XX%.

of Second EPS our ahead all expectations. and EBITDA quarter in came revenue

are updating the a non-subscription on results, change revenue. and guidance QX FX Research We based in our

repurchased $XXX June have through stock buy of opportunistically. We eager remain to back million and stock

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

year. In about of million, in and neutral as was XX% reported second cash EBITDA year, total up was margin QX XX%, up Adjusted free $XXX and from was versus quarter flow last XX% XXXX. addition, million. last contribution X% line with FX EPS was $X.XX, $XXX

non-subscription X% Research X% reported on revenue revenue and grew Subscription second FX-neutral an the year-over-year was QX neutral. year-over-year similar revenue grew The X% XXXX. as change FX basis. to in quarter in

was XX%, margin contribution last consistent Research with year. quarter Second

X% XX%. quarter. about $X.X the CV up GBS FX was growth and grew Contract quarter, second end and enterprise from are GTS prior and million from the across CV leaders up neutral. $XX the function year the at billion value versus Contract of value first

CV practices, single-digit and across all manufacturing high of was and grew or by practices, high or sectors Across rates across except single-digit growth the largest sizes, which vendor double-digit at led grew mix. the double-digit industry small, combined CV sectors. energy, majority rates, sectors, sizes public company industry tech enterprise has broad-based geographic regions. the our

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

year. vendor returned the enterprise growth CV contract CV at increased in single Tech first GTS versus end Global $XX million the quarter. quarter. increased Sales $X.X leader up the prior Technology GTS was quarter, to second from the CV high the X% value billion of digits.

leader retention historical to sales the count XXX% head vendor-focused was quota-bearing year. retention While QX, response consistent down managed was levels. last GTS compared from wallet business was enterprise X% GTS up to X% up was in territories new we year-over-year tech industry GTS with for for as quarter, near-term dynamics.

aggressively growth. GTS, align future continue our with Across territories growth we best we the investing to to are optimize opportunities, we have for and where

of We the by continue to the mid-single-digit QBH end expect year. growth

the for headcount year. have our meet we to this We need commitments

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

was XX% billion Business $X.X contract the the end value at of quarter, up Global Sales year-over-year. second

double-digit $XX which grew rates other single-digit grew was finance, marketing, from digits. first quarter. led practices. Growth supply GBS the than our practices and or GBS of at the increased million legal high CV chain mid-single All by

year. for XX% XXX% business was last compared new growth retention to to count GBS X% was high quarter, quota-bearing Wallet continue was the which for target compares GBS year. we XXXX. up year-over-year, for up prior head XXX% to the GBS single-digit in and

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

reported increased our was year. margin of XX% destination Contribution Conferences neutral quarter. $XXX revenue for conferences strongest Adjusting We held QX conferences. is second about QX the FX XXXX. to the year, of across compared movement million, the and revenue increasing was XX%. XX% the XX in for seasonally of XX% margin quarter the as quarter

continued at booking by an increased June we basis. on of FX-neutral Backlog basis, X% margin of XX% increasing XX% in XX million. an $XX revenue the contract and revenue year. strength. In consulting quarter quarter, XX%. up on Consulting optimization, was year-over-year revenue was FX-neutral in second XX% $XXX year-over-year basis million, prior up FX-neutral delivered was XX% to the with year's million X% quarter. was reported On $XXX versus million, revenue an last QX $XXX the up contribution Labor-based Second versus

year's quarter X% growth, to an and in We highly in which Our prudent the driver cost year-over-year expense contract was X% FX-neutral as costs. SG&A of the as higher compensation in and the increased an approach on biggest XX% contributed services a SG&A through on a guidance. increased to second in quarter costs. higher optimization quarter last the reported EBITDA quarter basis. of FX reported was basis. business X% compensation million, The neutral. Consolidated effective is and year-over-year the increase increased the FX-neutral for outperformed of and from management second reported as quarter result second second X% $XXX up up headcount variable.

through is quarter XXXX. favorable versus rate Depreciation income to by in due the the the This is modest million XX% quarter XXXX. was excluding to of The balances. $XX in million Net interest quarter, interest $X was of financing fully debt our of million. higher have $XX on cash floating costs XXXX third we quarter second deferred hedged up compared expense,

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

quarter the which was $XXX Operating reverse was The flow we second XXXX. with our of timing, change million expectations. $XXX reflects capital quarter $XX million, CapEx QX to in cash for with in half. for compared in the million the working line expect

conversion Free XXX%. rolling revenue cash of $XXX flow was cash quarter flow Free net flow income from EBITDA. XX% on was cash X-quarter a and for GAAP XX% basis was million. of Free the

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

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

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

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

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

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

$XXX quarter. repurchased our the during second million of We stock

authorization We more $X million. share after Board have $XXX the billion our increased repurchase buyback by than capacity recently of

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

primarily are reflect reflects year for outlook. research EBITDA Consulting, partially FX by based guidance rates. increased guidance higher research outlook recent and on for our updating outlook offset latest our the trends. to non-subscription and our and updated upside, full QX is subscription We performance the Conferences We The

XXXX, innovate and research, executive the challenges, teams help environment. compelling value economic The XX% face of how they subscription to about clients and prospects. and which recognize for and of continue very proposition a regardless and revenue For was uncertainty in provide we Gartner can their

QX is year, our the based of the subscription on guidance and For revenue, results FX-neutral balance outlook for research our unchanged.

We have into research revenue visibility subscription the this point high in year. at very the

about small X% portion was which now of XXXX research, non-subscription segment our for helped outlook For the updated right XXXX. revenue, million find trends. of software. We most the given non-subscription the We've revenue about for we $XXX businesses this expect recent of

As a expect we U.S. currency of be revenue reminder, about of operating recent half on modest the a in X/X are expenses currencies rates, denominated in the benefit dollar. other back with neutral Based in than FX QX. the to roughly and year our

of Our revenue least of X%. research revenue updated growth reflects subscription XXXX guidance FX-neutral about growth is billion, X%. is about This as of $X.XXX which follows: Research expect we at

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

revenue billion, Consulting of guidance. of $XXX $X.X result which least our is X% expect now full least of The from We FX growth is prior consolidated neutral. of at billion, FX-neutral up EBITDA of million, growth X%. We million expect about year is outlook an $X.XXX at which least revenue for $X at

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

at XXX%. from $X.XX For XXXX, we expect our the income prior reflects conversion of with net guidance. consistent flow of least billion, This free cash GAAP

ended, or the to event settlement insurance. After second reached quarter related the we cancellation pandemic

million expect This the We during included or GAAP in not flow is proceeds third yet quarter. $XXX of pretax cash EPS guidance. the

$XXX weighted for of million. is Our finally, the expect XX fully on quarter, repurchases at made of June. end million guidance adjusted third the EBITDA shares outstanding, the diluted average based least we And through which reflects

have results through growth to and to our grew single CV ahead and cycle. for macro CV plan global been repurchased year-to-date we through first the uncertainty. shareholders. eager despite remain continuing $XXX financial of Our in half in capital We the stock believe our digits the June, this return excess in was QX million high quarter, bottom

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

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

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

Operator

it's Jeff with And line of from the Instructions] [Operator Meuler Baird.

Jeffrey Meuler

at of that you point you what of you're want -- deceleration the marked said environment? I year-over-year signal or that reiterated with trying guess, that that volatile quarter-to-quarter. for just of, end near macro just and geopolitical an because When in vary future are Or you're comp to, seeing? think kind to expecting zoom issue guess, you like CV expect the the a known I you anything there. in QX on a growth growth market caveats, you bottom acknowledgment some may else Is the I

Craig Safian

So definitely any fact it's a amount I'd operating in relatively CV a quarter. in basis down given more operating say environment. XX or very small And about up is that points volatile we're of the

ultimately, that core is to moving is and to and X.X% rates. both could in around above should then bit, the to it back get the little annual we our a think marks XX% message bottom, objective and medium-term I XX% bounce growth every GBS GTS be forward, quarter

Jeffrey Meuler

what signal from recently exactly there. trying on an like reassigning gear? you that phrase territory, tech know is planning. sure guess was you territory salespeople you're of here, if managing attrition? ongoing And it's through but just Got the the the vendor use, kind Or know something territories kicked into those Just it. And that it to or But dynamic? don't not don't headcount I dynamic just I was then building that I

Eugene Hall

Jeff, Gene. it's

territory have what where with as see what every kind have every one has the do at productive to territory, So have leave -- the dynamic literally what we do, each do turnover, with we sales then turnover, is. territories. we those territory And we planning, most productivity what trend the we do and course, and we we every call look low which at person place is -- of as people is is week leaves even quarter, of been we look

extreme in to invasion we just salespeople obviously, Russia. weren't Russia So example. We an I'll sell used going give in decided, when you And to we have back the happened.

we So territories we don't fill that productive. those territories anymore, most other have but are

example, are others, environment recent that to small tech like vendors more used that those versus a In get able vendor there especially get funding look in you at AI can't to market, funding can. tech small be today's and in of the for if sets

that people do is basis, are companies selling weekly what on when leave, okay, we not so to to tech funding. get And literally a these say, going we're

like AI where them those in fact territories basically places in funding. over move are take to and Let's big

our recover this are in So productive we that the with to it proactively territories. or deployed constant in to to where we'll that, it areas. more the going we'll and more than those we'll move down either actually headcount people term, do close basis sure it's again, We it's always where cases clear doing on turnover. make like salespeople a short productive And do not have those most that say, we're territories too,

Craig Safian

high the the even just year way that with through, of And the the by the for territory planning, we mid-single-digit end of then growth of growth GBS dynamic thread all the year. end GTS sort for targeting, single-digit pulling QBH QBH by all and are

normal chance allow long-term match, opportunities. that against innovation place all about. it That's the operating but better XXXX. talked in and actually making X that that or for X the to gives in things procedure us in again, It's perfectly medium-term we're Gene it doesn't a last best put the implicit sure investing short-term, are again, us of now. years resources our are going we the an all been And And in

Operator

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

Toni Kaplan

it down, thought? you because the the subscription was worse focus the originally piece, be not the but on guess, Just I think It trajectory it I know guide. you non-subs growth than to actually to non-subs returned non-subs you side, your like it piece. the of wanted was I through vendor Or because as -- revenue tech seems because is -- as declining. just I us was still guide maybe trajectory the to lowered be research on to seems business. help on thinking? non-subs is going quick were the

Craig Safian

the I'd operational research first subscription unchanged entire little an piece a Toni. last relates operational thing piece. of is exchange. non-sub that up to Yes, revenue The guidance it's sure, revenue, mean, overall say essentially But mean, is quarter. the the I perspective, the from bit foreign change the from I from

And believe again, to or QX be was we QX. quarter, either last as we talked bottom that going about the

And outlook. NCVI so had growth strong, dialed CV and into our QX we of solid a

so relates everything, change all non-subscription And the to business.

Toni Kaplan

balance the leverage. then cash you're high, And Great. below is pretty

capacity added Maybe to elevate I for -- that know sort an look buying give already on update of what back conditions just program. just of could like be but more level. for do, to you You stock? buyback to you sort the us we

Craig Safian

sure. Yes,

And sort of philosophy basic buybacks. buybacks on philosophy be our influencing they're our to on each disciplined. in -- So I'd price of those important is opportunistic sensitive, underscore and all

capital close cash first what to flow X operating the other through free we've most We're of top year and flow of in a buybacks 'XX. full half What obviously, first months And the this, people our the each year. to pretty are of or returned on cash 'XX through lot shareholders. fact, say, I'd this, the close also on of did back since call we our you and know know XXXX

to And and want free flow price we're going opportunistic so cash we and incremental disciplined, value to leveraging shareholder by but sure sheet. make are we that our continue sensitive, balance to be driving our

And that, I would going at the strategic The value-enhancing so been over that absence buybacks of has forward, buybacks. several And more tuck-in forward. on last look would M&A, buybacks. bias we be focused moving we in and years presume

cash. right, have So you're we

sheet a flow. we're cash of We the that sure we'll X and shareholder through year, the job and leveraging our first by We make pretty continue to have months did balance value free incremental capacity. driving good

Operator

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

Andrew Nicholas

some focus up there might Is productivity pretty be Any growth, quarter. wanted I nicely business of color the your unpack selling in seemingly are first that to comps. some little that better a relative any the you at new you would I stepped from easier But on least GTS, change first be to force? Can great. sales to know seeing environment? there bit?

Eugene Hall

Drew, Gene. it's

we're So to environment the world. what the say is same. of on the focused I'd changes in always is to agile respond the be pretty running I And improving But think as you know, much actions productivity do our we're teams. and selling taking

you're It's environment think better really. in any got that's not impact I the the way, that really seeing.

Andrew Nicholas

And continues I'm at looking enterprise, then it Understood. per up the and nicely. contract value tick to client

CV how evolve more larger to to bunch result hunch enterprises. confirmation as you any my selling a that it of or metric some there of the tech have growth? vendor clients you'd maybe wanted losing the so now trough confirm Just seen smaller into the on and expect color seats more But that's than that

Eugene Hall

opportunity the those get time. Craig plenty that's can Basically, I'll not our basic clients of client, -- is we So with more when started, a to the to strategy clients seats to There's sell finish. end. over sell Andrew,

additional selling of them. And to clients business, users so and is part our selling one licensed to keep strategy sell core additional

strategy sell of logos part our as of other The course, new well. to is,

factor had new that because well that's And you is as clients. so part a that this see is which always growing as keep -- and as core our actually existing -- strategy, there one clients always we've of

Craig Safian

add. Andrew, would I just And

our we highlighted, just being that per And And with relationship what client, little is at then retention Gene for them that going years, that and the you also you and have is helping well. in CV been we've bit expand do continue XXX%, about look intend talked churn wallet a once we on figure enterprise we small which to that If of doing baked overall end but year. to of that each as forward. helping is every modestly, over there terms in, increased a

Operator

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

Heather Balsky

your I low third getting of could about selling talk are the you about that was thinking teens back time now, you context number. the environment, get growth hoping the to how XX tech growth your now? to that going the your XX months, have to environment the you outlook and right to take right you where the In expected do it medium-term back And things is to back there? quarter call comments to Or changed? also 'XX table normal return think still on on to vendors in

Craig Safian

you. thank Heather,

a In a well. of we operating we're I'd see, stable but I medium-term it very argue to is a globally, we'd continuing need quite environment environment. honestly, more like volatile the And our really all probably do in environment, doing say again, operating terms but stable we're well operating volatile than to a do won't goal. outlook, great --

to tech to vendor business tech the is challenging continues quarter, We overall small portion the that this but return is XX% of challenging, GTS and or that still growth medium-term range to it a is in see back want leader be into market. The to to lower side, single-digit particularly the say then end-user growth tech from growing would rates, what obviously, were super vendor today. growing on portion the environment. is we last enterprise guidance super GBS And end of range. XX% up operating in high vendor on pleased get quarter at the I the tech

Heather Balsky

trend? think just tends a And helpful. terms of half consistent as about historically. from see you cadence look trends When in that sequential not reason sort in That's you CVs, generally, any of the follow-up, year, you there the business to the typically way that the but number, the Okay. sequential any if exact you back would the like back is see, of deviate

Craig Safian

no. Generally,

big motion, So which like piece selling typical stable. pretty that, what the a of drives our our are phasing, conference are things calendar,

no, what But Obviously, out was it to us year follow to year perspective. QX like should I this we from for little normal we've a think So back would trends trend. I back half of the because off called of expect seen. the of half similar a earlier the that year us look

Operator

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

Joshua Chan

look as trending the CV slowly How If do envision I GBS of macro? you at growth, so think from had kind the the of shape GTS about here? obviously as you of been perhaps nicely GBS predicted. that's How reaccelerated you moderating do because

Eugene Hall

XX% quarter, in So GBS, is good. really grew we first, think which we the

The is has tremendous opportunity. second GBS a market thing

that go going little go around huge prepared opportunity market a time. bit to opportunity to aligned over but CV to quarter-to-quarter, it. are We there, is the get and capture bounce is we're

Craig Safian

the business XX% that to the to growth, and XX% both again, that the business GTS for continue we and business believe is growth. CV to XX% can medium-term GBS objective And XX% deliver

Joshua Chan

on Great. Okay. ask any then EBITDA second in margin. those ingredients also there question QX, is year-over-year led that I slight the ingredients that hold can margin the if reason to into the And expansion guess wouldn't a half? I

Craig Safian

Josh. Great you, Thank question.

QBH future growth for for into GBS, single-digit so talked an of mid-single-digit again, operating expense sort And too, phasing half for continuing and are investing operating second normal a half little a second make about that think coupled growth GTS we forecast to and So bit, QBH the sure question about again, with and expense investments sure revenue perspective, the to plans. Heather's the from dialed making that from growth. to those are we perspective is way back high both

I note quarter that conferences. thing is for margin highest our would QX other The is

calendar this if despite that So growth, top the the margins in which But know, quarter, saw really you QX year largest that drives being from which conference the margins, actually the dialing doesn't you on the again, how highest XX.X%. really QX then incremental the the EBITDA QBH that reconcile quarter, benefit of also investment kind as sort given our you QX can year, benefit second which in OpEx results are half math or some give results run you That's the for second phasing, normal you investments of revenue, the full those outlook EBITDA that margin revenue future. to down for of and around is of quarter. line

Operator

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

Brendan Popson

is what some This any just near curious it's of that there's from to opportunity the kind Manav. tax -- what seen expense just been and any the impacts technology. guys are guess, of seeing and what I term. for Brendan that. have on with on IT related but ask, if you you're GenAI was of customers to your saying want Obviously, an also reports I just well, on as kind just budgets a just facing their some, companies of like new there's I of

Eugene Hall

a Brendan. great it's question, Yes,

continues with be clients. So very GenAI interest to very, of all of high our a topic

the invest cases use of The looking function enterprise easing the where investing our best enterprise leaders basically leader on look you are to kind are The heavily. businesses If and the to starting the investments. into tech at GenAI. companies companies, they opposed they're tech function can get for highest as return

I wrestling of us it, topic is to formula it's are interest. it's high and on important the money there. for spending a right because them. very it's think still great with And what people They're

value. lot a can a where so add of really And place we it's

Brendan Popson

Okay. up. following And then just

always -- mentioned and cash you mentioned possibility. a as leverage, the M&A tuck-in With you

of give what, consider. an guess, what kind I us Just M&A idea kinds would of you tuck-in

Craig Safian

it's Brendan, Craig.

kind angles. in some of coverage area. X M&A think would about be our we One So research generally, from enhancing

or we or something where need like be could more we in it finance So need more that. in marketing

executives that flavor operating the insights audience. target of could which are would provide for that So enhance assets one to that the looking acquisition, we be our

geographic a fill-in. of sort be would Second

to that done then one -- the of faster would capability after sort assets tone the perhaps of radar help that's screen is enterprise. And acquisitions would at really valuable there, tenor look geographies much critical have we've and and market of those looks across we then acquisitions buying sort over some have us don't you be fourth the or going sort least the that in So not can at last of third of And but of small same like we're there's leverage a to and years. again, technology-type catalyze the each getting kind categories, or M&A today. mass. We that where what X handful if X, strong as us or as

Operator

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

Surinder Thind

the plans about thought loaded. Is points? going to data quite maybe it's at It Any be Can looking talk back-half this hiring for there be helpful. that just behind the point? like additional your color you for just sounds cadence would

Eugene Hall

Surinder, sorry.

if years. laying was very you after the the we at companies hiring, hire to and aggressively were it's even down slowed you tech easy our very, over tech where where so say, overall, Then tech it it the hiring. bubble were hire hiring been hard to takes for was look the market people I'd dramatically. the year so the off, last our afterwards people was uneven There that, There because companies people. the our few if look at So pandemic was

very up ago well, stepped had years we've so we a lot And people. a of of junior and couple

be ago to That and the make looks the also of group like to wanted feel people tenure full And that point. stable world macroeconomic a to years kind X we like. of that and more seems at out now so productivity hired those mature, we we got is geopolitical them, now, that stable of and see what sure we

hiring so makes up. our And sense it to ramp

for beginning them. in and us second hire And years the to improve people 'XX, productivity first we year 'XX are the the because going X hire their we 'XX over the position will of the half at

few this which kind to back more going would of kind strategy expect the is of even of last times. of to is that And trend additional years, tumultuous to this so the And planning in second traditionally -- we getting what hiring really the we've half the last we're last and do economic hiring is continue, after getting a to the few rockiness done lot roads of before few years just forward. in back

Craig Safian

And hundred by the just there other I'd staff end today, net people Surinder, we thing another from is add the year. it's are few on of the where

sound it given not, actually big the a move, trending. sort of So may like it's

that few -- more mid-single-digit a between GBS, so And the people the of year. single now if for we and growth and for between GTS target QBH end it's digit hundred again, net high

Surinder Thind

maybe And helpful. does can demand That's it the the prepared How in back just incremental like then resources? this half of access CrowdStrike funnel that the convert more in wanting business? does Is engagement impact that just existing you at clients the with of Or this mentioned more you remarks. top year? to drive the something

Eugene Hall

is strategy one priority. most to whole big our on priorities. our help So Friday of a that clients certainly was their important with CrowdStrike

we and webinar bunch demand We a uptick clients. a see our that to We help engagement. series We a of of did in things stream, We media did helps things a in big with live clients. to that we day. so document a had And a published day. them. for had our that did It had whole panel help we webinar

for demand. And buy. particularly, clients. a it them existing we're It's so why they helping great clients, of great really, reason gives which for But for our moment should need, is a in new them

are counts So these times. CrowdStrike help why into to we CrowdStrike our the exist, through clients difficult is --

Operator

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

Keen Fai Tong

XX% you improved? or and momentum to stable trends compared similar in exiting which leader the on was elaborate Can growth is was CV pretty XQ. you're seeing Enterprise the the the quarter, of here if some functional quarter

Eugene Hall

there. didn't say was our So which But our and and business. think QX parts QX. is of pretty of the in better, of selling environment environment do not I pickup had was bit change we macroeconomic the why would overall between geopolitical There's a between change execution little lot QX QX. and I a consistent much

Keen Fai Tong

Okay. outlook but in the outlook Got holding full quarter, are for research outperformed year? your from unchanged growth back revenue it. full helpful. What subscription subscription That's research for for then you're the subscription revenue year. raising And the you holding your factors research

Craig Safian

to is our CV to George, into perspective land roughly thought came were points did way year pretty XX the from going basis much outlook. in would subscription baked we revenue the research I QX. from where in second full That was a it accelerate growth characterize we we QX quarter.

about line research the the And so in remarks. now modest impact but until huge really line, will this XXXX also today, changes it's revenue where the a from from we have It's really the CV for revenue. greatest determine subscription deliver visibility good don't the really year. end of growth CV in we we on, That's year the that feel as we the obviously prepared we stand revenue have mentioned

balance we the is think the the uptick than or I line our on in of for change No on So other to subscription that research revenue foreign the for exchange. QX. of for target modest year expectation sort dialed perspective

Operator

Silber And BMO next Markets. from with question Jeff is Capital our

Jeffrey Silber

I retention end? focus think still seem take in getting worse, metrics to is Is starting from which there do retention. know But metrics, to good to declines less direction on wanted it can the to get down. move retention you again? see. be do to going I The will a your the you positive what anything

Craig Safian

first. So I'd GTS focusing on say,

I retention, of function the while to as part So for there. enterprise levels in I think historical and at is strong remarks, prepared leader be continues pretty business mentioned the

metrics I seeing part tech challenging you're the so in particular, the the vendor again, diluting small the And market. is little all market, vendor think of retention tech a bit. continued And

out, through more specific you're cash et terms have they client through because problems, sold as already eventually when their funding wash when well, you there in ago, are now will so and about, We will flow no thinking some It runs take It's issues. funding, cetera. months when XX time this. as not they simple it's got of business really that

in down you're I companies so stuff. what is driving a from, seeing And that drag particular, just is the technology small think retention still

wallet side, side. are numbers we On we retention higher The what really, strong significantly the think had retention on GBS still really out the report I than there, the GTS pandemic. of coming wallet particularly

GBS so as strong And well. retention metrics wallet and retention the relatively metrics are client argue I'd

Jeffrey Silber

little the selling recently, remember contracts. could were correctly, I you to if shift over wrong, think years. one might probably I more more I at X more Great. bit be And in but point Okay. X-year towards a contract shifting I length for time, Research. If

few if are lot months for a renewal And of If me so? up next correct. remind coming you X-year those that's could over or terms just the

Craig Safian

would length, say, vast months. is Yes. do majority the that months. XX XX that some write Jeff, XX are contract are our some months, standard do We write I XX are months, and we but

so clients contracts our a up and predominantly contracts. significant quarter, XX-month in And renewal amount every because for our sellers always we consume basically of coming have

I somewhere X.X average is length contract of think More to than contract is our range. nature. our value year in the X.X XX% in multiyear

to X-year have we're and going up consistently deals deals And to for always quarter-to-quarter quarter-to-quarter. renewal pretty X-year so coming again,

Operator

queue, for no further the Thank pass in you. comments. back I his the And the Chairman to as see Gene and questions call final I will CEO, Hall,

Eugene Hall

like I'd value take call. delivered leaders. from Gartner growth function financial delivered XX% contract what Here's you We enterprise away ahead of results expectations. with today's

opportunity. We have a vast addressable market

We strong value have a client and compelling proposition.

Looking well over growth drive to the sustained positioned ahead, revenue term. double-digit we're long

capital our today, returning look for program. Thanks growth, actual forward of by through share value providing generating to we our to shareholders objective quarter. in insight to to shareholders clients, well next excess will cash you and investing for We joining again our for income future create net repurchase and us our flow continue free prudently updating

Operator

all you today's disconnect. you now for may in thank And conference, participating

Gartner (IT) 30 Jul 242024 Q2 Earnings call transcript