IT - Earnings call transcript Q4 2024

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Operator

Good morning, everyone. Welcome to Gartner's Fourth 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 as will results fourth a include earnings release earnings outlook This financial our of and in today's posted both to disclosed website, XXXX, Gartner's

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

Gene's based comments values fully Our count FX-neutral counts growth growth on are XXXX associated discuss All share foreign stated and unless otherwise. contract rates diluted stated we in are unless to share All rates. exchange rates otherwise. weighted references average for are

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

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

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

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

Eugene Hall

free growth growth Good X% continue will in flow remain contract delivered complex and sales Gartner environment. revenue, were accelerate thanks value quarter We joining In ahead our expectations. headcount grew continues morning, cash XXXX. and resilient organizations us EPS to today. EBITDA, QX, for of to in a across X%. and Fourth

challenged how more. risk attacks sophisticated. to while intelligence was chains escalated to experience Cybersecurity leverage the disruptions. and In worst by XXXX, artificial remain in continued conflict more geopolitical becoming Enterprises even Supply polarization major and mitigating decades.

the to succeed. greater uncertainty is Executives across and they source continues guidance the need and they ever than rate to for Leaders they tools enterprise know insight, know need Gartner change and best the of are help accelerate. before, the facing

make guides about decisions money mission-critical geographies priorities is more includes governments clients that to Gartner managing time, enterprise smarter our risk, across major in and that in This than major their industry. leaders size while We knows organization help no confidence. saving how government. There saving help every building Gartner. every address and all

of countries, public to sector And largest more private the leaders XX there's support world We a anybody on in about of effectiveness the XX and how technology except leverage in including we improve Russia. to economies, sector. leveraging the governance. the than know in technology the In focus U.S., course, efficiency

practices AI artificial of topic environment. up keep the achieve We'll how in help our to intelligence, of insights is to to is challenge pace the objectives. U.S. almost innovation best to impossible these the innovation One In the their across and apply that harness with. continues enterprise leaders world

Gartner conference During AI our scaling next. ways discussed to analysts AI pivot leaders series, symposium and what's XXXX could learning successfully IT from pursuing

helping We leverage thousands to in executives best how their determine are of enterprises. of tens AI

tech business value the sales new contract and channels. accelerated and Research executives both distinct GTS to teams or and Technology their their our GTS tech and for IT. vendors. value contract XX%, consecutive quarter. growth enterprise third with double-digit leaders grew with X% clients in vendor segment, improved Global profitable Research Within be our we teams serve leaders largest continues to Sales, and serves most GTS, through segment. within

qualified strong growth audience. new XX%. beyond and This finance, IT. business Business chain, HR, engaged or XX% GBS Conferences to deliver with accelerated contract serves supply and legal, sales GBS, their extraordinarily Global of value to teams includes Sales, an Gartner leaders valuable marketing, more. insights and

deeper execute XXXX advanced and extension clients Consulting research Consulting initiatives their Consulting fourth the is of Research. IT is quarter, to important are our our business. through revenue for an plan complement Gartner strong. Conferences an work. and in grew project-based most helps XX% strategic bookings Gartner

foundational expectations. of improvement grew exceeded Gartner X%. second, our Optimization a million, company-wide culture, best to to elements practices; $XX are: inspires unrelenting innovation; execution revenue a win consulting commitment was our which revenue as Contract Labor-based long-term global and and of continuous on consistent associates an third, success operate focus and which Three globally first, vibrant team.

In financial CV to of ahead delivered continued closing, Gartner expectations. results growth accelerate.

powerful We a and value client opportunity. proposition have market vast addressable a

to our continue capital to for prudently growth; investing by objective through share will for repurchase providing value shareholders create tools program. insight, guidance our future shareholders and to actionable our returning We and clients; our

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

and of success this sustain record us future. drive double-digit track long-term of more and far to our positions growth All the into revenue

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

Craig Safian

well Thank and adjusted EPS continue and cash contract in environment. Gene, complex quarter Fourth almost morning. EBITDA, you, free accelerated better growth to execute X%. good value than expected a we Revenue, as to were

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

more of to and remain December than through million repurchase $XXX shares opportunistically. eager We stock repurchased

We we achievable for are introducing upside. opportunity guidance, which view as with XXXX

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

XXXX. flow was was reported Adjusted a versus quarter EPS initiatives. And very the cash the was XX%. total and year. million, EBITDA to finish million, strong up tax a XX% includes contribution as margin up free In X% planning X% benefit $X.XX, FX This QX from addition, $XXX in neutral. our $XXX was

ended We associates, up XX,XXX quarter the with year-over-year. X%

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

Moving and hiring from strong the for talent tenure an plan into a position coming a in with year. excellent XXXX, perspective we are

the X% line basis. and grew X% FX guidance. year-over-year, reported, with neutral. X% revenue in on expectations in and quarter Subscription grew fourth our Non-subscription revenue as Research was FX-neutral revenue an

quarter the year prior XX%, with margin contribution was research Fourth period. consistent

$X.X contribution end of margin the for the year. billion gross increased was The research reported quarter, revenue For up Value, full Contract the XXXX, fourth XX%. prior the neutral. X% and year at as year X% the versus was or CV, by FX

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

seasonality is this discussed notable in metric. As the in there past, we've

CV quarter, the For accelerated across quarter. from consecutive leaders tech grew GBS GTS and third X%. CV for from function the vendors fourth enterprise

was Across combined broad-based industry growth size our by led company health single-digit manufacturing practices, growth sectors regions. practices, all majority sectors. care, categories. double-digit almost public across geographic our had single-digit the of of industry enterprise We the high rates CV and sectors, sizes across at high or grew the and

largest mid-single digits. small which has The vendor category, grew tech the mix,

XX of billion sales the up We also $XXX from drove million end double-digit the top or countries. our contract fourth the CV quarter, the versus Technology growth year. in GTS of the was majority $X prior X% Global high quarter. at single-digit increased third value

vendors. quarter, with growth reflecting clients. even for GTS before both XXXX. enterprise double-digit We since consistent GTS of business sequential XX% increased sellers headcount X% increased quarter, our leaders year-over-year, with new the XXX GTS tech retention for added addition was QX largest the new Wallet net year the and with growth quota-bearing increase versus of new plan. net XXX% in last the

QBH We growth GTS XXXX. in for are planning mid-single-digit

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

The value contract quarter. majority the rates. million led of billion increased $XX Business by Global year-over-year. quarter, was sales end XX% Growth double-digit up fourth legal. Sales from at practices the at GBS finance, was third grew and of the our GBS CV $X.X

XXX% with net XXXX. existing XX% GBS was to the While retention business GBS fourth was strong clients, was our last quota-bearing of for compared X% versus new GBS quarter, year. the headcount growth for up reflecting up quarter

for double-digit We in growth QBH GBS are XXXX. planning

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

we've during provided larger-than-normal major data the earnings As This value we updated currencies. against rates our time, do appendix in quarterly significantly strengthened resulted this the supplement. dollar historical in at XXXX XXXX a each FX to The revaluation. year contract of

you baseline use please your models, As the as forecasting. data remember for updated build your XXXX the to

fourth quarter, the in $XXX Contribution the typical quarter in in was XX%, all person. seasonality. XX quarter Conferences held year-over-year. the revenue destination margin million, conferences with XX% up consistent was We for

XXXX, basis. year XX% delivered reported full we $XXX of a was which revenue and the of on FX-neutral an For increase million,

XX%. made the of $XXX quarter contribution in XX% revenue the Consulting was contribution investments quarter. the the fourth gross conference conferences. quarter increased margin was consulting XX% XXXX. launches with for year Full Fourth during margin and million We expansion existing fourth of compared year of

was basis. Backlog revenue FX-neutral on versus X% FX-neutral December up at basis million, multiyear $XXX of Labor-based QX was million, an reported and last increasing in on $XXX contracts. as on XX year an strength year-over-year XX%

very were pulled We QX. quarter strong, forward with $X XXXX. About optimization revenue delivered quarter of The last million from compared larger was year. the more and with first deals of $XX million contract in

is variable. Our highly contract revenue optimization

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

SG&A an fourth on on a $XXX fourth and quarter the reported of result headcount X% reported sales. increased year-over-year basis. EBITDA increased and mostly in quarter FX-neutral an quarter growth, as FX-neutral the million, for as basis. X% as XX% in of the SG&A was an in increase

EBITDA FX XXXX up upside basis $X.X the almost for primarily on to a over EBITDA reported quarter year performance. a X% X% revenue full Fourth increase guidance our was stronger-than-expected billion, reflected and neutral.

interest balances. Net up of expense, fourth XXXX compared XX% an XXXX quarter of deferred to interest in similar our quarter quarter, of financing was due Depreciation QX. excluding improvement the higher million. versus in cash was the to $XX million costs to $X million on was This $XX the income and

income which the took of planning use for benefit The tax again, the planning full a as was QX a XX% the net place we of used The in calculation of which rate rate, quarter. fourth net of XX%, for calculation the items the tax QX. result The income a to for favorable adjusted in favorable result rate tax tax tax of income, adjusted during quarter adjust quarter. was the adjusted year XX% net was the for as

in XX% tax in XXXX. have about We shares had adjusted basis. with quarter. the fourth been million If on QX million the in shares an Adjusted million X just outstanding had $X.XX. unweighted up XX of exited quarter X% a the fourth under quarter reduction is about was This shares versus would EPS rate QX XX XX%, been adjusted $X.XX, EPS the year-over-year. We or

for year, $XX.XX, XX% been EPS For year EPS up have for adjusted XX%, been the rate full tax If the $XX.XX. had would adjusted adjusted the XXXX. was

QX flow compared million, Free quarter up for working the $XX for the XX% XX% year. Operating prior for cash million to in benefit million, was with a quarter. CapEx flow million, than compared was $XXX last year. cash less to was year the up timing $XXX $X the quarter about capital last

a There XXXX. net versus full Free cash the proceeds, $X.X cash real XX% XXXX, Adjusting free and after-tax XXX% during billion, year and free and estate for a benefits. these increase several flow XX% for of lease flow items planning of revenue, including for was tax EBITDA almost termination were affecting flow GAAP was XX% payment income. of insurance net income cash XXXX items,

is is of when higher had Our about CV billion quarter, free fourth conversion generally flow cash. growth we the the At end of cash accelerating. $X.X

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

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

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

the the with for continue $X.X for during forward. is fourth repurchase we rates. year. liquidity, repurchases authorization end than leverage million the going remaining, of $XXX than the fixed levels and sheet December, repurchased low more authorization million $XXX $XXX refresh expect of strong interest of of we very quarter balance We effectively stock and and Our will more to million of the Board billion had At full

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

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

you the U.S. As dollar know, has significantly. strengthened

We growth headwind full percentage for revenue and will point to EBITDA the be year. FX X around a expect

clients for we continue a provide proposition compelling research, innovate For prospects. very and and to value

research XXXX XXXX contract second, nonsubscription revenue, ending revenue. growth continued the primary function CV revenue research timing of performance first, with and the of The X of Starting acceleration; was factors: revenue. outlook XX% subscription is third, for which consolidated XXXX of a and value; the slope

CV during reflects accelerate XXXX. continuing Our guidance to

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

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

With the CV, XXXX X% ended around U.S. million Federal Government, with the is of of we which total. $XXX

year U.S. widely Federal in all the with contracts of the for renewal across year. Our are departments. agencies Around spread and are XX% CV spread Almost X contracts federal GTS. is U.S. across

very value public clients. We offer compelling a for our proposition sector

mission-critical the term. discussed, priorities. affect function leaders business government in their we address our government Potential As may help changes Gene short

continue growth will research will and to This to us service over clients. sales, We position time. to provide levels great our drive strong

part of second be was segment of of X% segment to nonsubscription the full Research in continuation of year half guidance trends. we'll fundamentals the able consolidated XXXX. this outlook. The If the portion a built improve, underlying into We about increase of revenue the the traffic

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

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

the the We to quarter gross margins year the expect highest be of for segment. in Conferences the second

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

X% the pipeline about slower we on our composition backlog We forward optimization Contract based first QX, usual. and in as about of revenue, half remains the very the variable. seasonally was strong several years. also business visibility Consulting, For highly the $X in first more XXXX quarter. has had million and into It's have of which pulled

this a part segment. outlook for We've prudent the incorporated of

hiring rate for Our consolidated and XXXX. hiring expenses half growth second reflect for from level the XXXX the have run planned base the assumptions we

the about driven factors, hiring sequentially merit notable by and the recommend conferences expenses seasonality Beyond thinking we calendar annual increases. with

sales cash our XXXX future growth delivering plan to headcount invest commitment strong and margins growth Our for free to high while mid- for for flow. single-digit reflects

growth again XXXX. For GTS, in QBH mid-single-digit expect we

need we part we're now, about vendor thoughtful our capacity to and public the tech the have in sector of the be the hiring for for business We term. going short

double For this plan to GBS, we grow digits QBH year.

sales our year faster The depending We long-term go most have our This essential operating how plays on sustained headcount. plan. by the XXXX the increasing of is recruiting to way growth is an capacity double-digit important for we out. invest part

FX-neutral is X%. growth. $X.XXX FX-neutral billion, about least XXXX with XXXX for which consistent We growth Research expect CV guidance Our near reflects growth The guidance revenue follows: subscription is as at of revenue of research X%,

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

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

EBITDA reported full expect of EBITDA expect at we We margin XX%. billion. of a year basis, at least $X.XX least an On

in and XXXX the this hiring to a plan. Compared FX, prudent factors with additions, XXXX approach margins, XXXX headcount growth

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

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

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

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

EBITDA, exceeded single-digit vendor we continuing free tech uncertainty Revenue, year global guidance well the year performed despite flow in ago. CV growth. market. macro a finished set expectations We We and XXXX dynamic with high and EPS a the performance and cash our

over our We remain than to past capital excess during the to return $XXX stock shareholders. more X We XXXX eager billion $X repurchased million and about in years.

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

the our over and out medium expectations Looking are model financial term, unchanged.

XX% gross CV CV costs XX% modestly expansion, will deliver growth Research With in and double-digit revenue margin line G&A With leverage, will growth, with sales time. we we growing expand about EBITDA over margins to growth.

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

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

Operator

first Jeff W. Robert will Baird. our question from Meuler come Instructions] [Operator from And

Jeffrey Meuler

CV I'm then. especially of us revenue things of currency to constant that rate to year Research the but while begin the perspective, X%, QX still gave of an comp you A some you trying lot have growth landing tie only You gave through together. CV us and exit well X.X% a with when easier flows the subscription does near

trends Just Government something assumptions ground together? yet? the Or the just from beyond on from those hearing those seeing map tie you're in renewal trying the perspective? prudence the heat salespeople Federal are anything are to you signal things you risk figures guidance or seeing in renewal Or anything U.S. the to

Eugene Hall

biggest end And year year of is sort revenue year. the of determines, going be CV prior So driver forward that to much to growth the into subscription flows year it, XX% how growth. of of call following revenue actually XX% the through

is about prepared we of NCVI talked other part, the our The remarks, during phasing bit quarter-to-quarter-to-quarter. which important little the a

And is and quarter. heavier lowest bit as business our is or little quarter a average, heavy we we new mentioned, than a renewal it -- QX

prudent so QX those for or pretty QX we are QX -- we approach QX performance. a and And plan in down the And generally that move quarters revenue the the on can CVI. depending up to how take materially and

looking rolling I sort And a our of you're around for of flow currency ending normal contract into for that and NCVI half then would so expectations "normal" flowing first into growth what of at constant X% XXXX growth is XXXX. revenue value sort characterize subscription as

Jeffrey Meuler

XXXX margin headcount kind to be are annualize in talking spend to and to year or of yet likely investment, framework then final a like year And I is that And be the hear fully reimplementing margin that medium-term now will So be terms going XXXX where fully expand margin opportunity you're I quota-bearing it. be because sales the of rate about the not reset? lands to thinking an to guidance, medium-term growth consistent in modestly I still growth should for going you framework? upside. back growth ever time, ask with you're on XXXX? from over needing GTS the headcount from guess, reaccelerating we Got rebased for But the sounds still it still we XXXX

Eugene Hall

Jeff. Thanks,

yes. about to year for us of store don't say, and and that dynamism the to terms back operating of But is that the is year-over-year expense step we sort way in. growth. one it operating have X% in around what XXXX growth think of guide plan know implied I baked like I'd has the into environment the operating So to we're our expense

across the have XXXX normal we and perspective that growth QBH particularly for encompasses from that a on in company brought phasing of but we with hiring. more the board planned And growth XXXX, the

CV our the modeled so and over revenue rate again, of we if And and XXXX. -- accelerating in have growth course

"normal And say so be again, up ends in the a would being to baseline. XXXX yes, could right the new XXXX year," it's more I that if world But hard dynamic call we moment. this given operate, again, which

Operator

And from Toni come our Stanley. next question from Kaplan will Morgan

Toni Kaplan

in we now the growth and accelerating see where first wanted place to year? is throughout had understand, I the dynamic, year, continued in I a a the vendor quarter part vendor prepared for to tech are we know this expect growth caught I tech nonissue but last accelerate in remarks to quarter. where should we that the a year

Eugene Hall

the are well. So market as we vendor and has nicely type recovered

to state So a quarters. it the to return normalized we several over expect next more

to I it it's to we accelerate -- And think continue so year. expect for the

Toni Kaplan

Great. been questions And buyback. recently then the have is people on I asking one of think that the

-- mentioned have that? is leverage you the excess extent thoughts really level could to a only lot the below goes your remind you sheet, buying target cash And into contemplating in your us your you where on what just decision-making about dilution. balance process But you're is. Craig, for back of So on guide, that I the know any

want we upside could to guide? buyback see Just whether to that understand

Craig Safian

you, Toni. Thank

through to capital smart our and our returns strategic those great we to be committed Philosophically, to sure buyback we is tuck-in the we through initiatives shareholders of shareholder delivers term start. that programs. want long our over whether or one I'll program buyback our capital capital deploying that So initiatives on deploy value-enhancing in ways, make remain we through the returning value-enhancing it M&A. know

in back again, north buyback we a side, back of the for $XXX XXXX. zooming million On moment, bought just

years, past X billion. the $X Over been it's over

of are free yes, And capital work we put than to work shareholders. to proven to to and cash and that, our so I flow money think our work we've more behalf on willing

to the said, be don't in That buying just blindly. we want market

philosophy disruption in We of in go ready when is And big. opportunistic the a a or whatever the big price-sensitive, go have there we and it to being the sector disciplined. either share when price opportunity are in may see to or market we or be, an

$XXX were last we stock because over million attractive year to able repurchase of follow at prices that We philosophy.

pretty that price-sensitive dynamic And forward, deviate question, and discipline. we're the so as place be philosophy so not market the opportunities from more into to aggressive, but to place a I on and and volatile going give mentioned Jeff's being going us should world opportunistic and get our overall of is

Operator

Deutsche Our next Faiza from Bank. from come Alwy question will

Faiza Alwy

First, the I wanted sector. to public ask about

going sector a in You in I thoughtful sector. the talked hiring the proposition know the said for there's value short about term. are lot that the public you And public been to Obviously, you've be about news.

sector Just there, give us the but light a thank -- color how of approaching bit a you us color give environment the public dynamic you're for in and quantification bit the there? more tactically about just more

Eugene Hall

So start. me let

the First, us, federal world. state in sector governments, local -- public for countries around governments encompasses XX governments, the for

governments essential help service, citizens, we're So sector sector, actually from. with their comes for their public an And where we world when of in the to services them. most to delivering advanced it the incredibly and diversified among terms we're service in comes public better

so going continue that. doing And we're to

Government, the just actually being being as important as sector. U.S. the at so but And just and as countries you it technology look if federal, commercial not sector, whom all state, as of like is public we XX local, for about think

sector it do see expect well continue with a as very we we so us vibrant for to to overall very us. that And

Faiza Alwy

is -- like lenders being Is board? on you across GTS Give that -- that tech were some about is higher XQ perspective much specifically about or talked renewal quarter how you board? you. us a for talking then And or Understood. Okay. across it the the

Craig Safian

it's Yes. is, Craig.

XX, XX, phased are the but it's evenly pretty renewals not our XX. XX, throughout So year,

bit mentioned little largest as to build than we XX% our our Fourth business new quarter a And and is so it's we sell mark. conferences, lowest be new new higher quarter, we the earlier, our most I quarter. pipeline have business. business And happens most QX the the

And roll it to new QX, as quarter. tends lightest be business we into our

higher-than-average us sure of renewals the causes quarter we're So quarter about make that our dynamic really QX into business the to of NCVI it's revenue amount that build that seasonally lowest slightly and thoughtful our the in plan. new we

Operator

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

Andrew Nicholas

you the renewal First think on and cycle Just in and X-year about it's point bit being typically contracts a I back question, to I it of kind flow or reacting are you of medium mentioned are business circle just your like and getting I massive the just tangible approach? to not cautious? optimistic be goes kind will generally government clarify, more news part a not you those is sure to it's long piece. understand conservative wanted But opportunity that a back if business can feedback of that choppy? part this to of you're just term. already the from the or

Eugene Hall

-- no trends we change. from in what in as no -- but no if today, look if XX just public look here now the are So same that trends QX. saw If -- trends change future, in I we're sector, difference again, change the same state, there's countries I'd highly local diversified. the we the on I we're QX. the federal, say, business, zoom There's in And total seeing we U.S. in at could the our there. I No saw are seeing sit

Andrew Nicholas

Great. to update seems terms I generate Any the your updated And new my wanted leverage to release technology like we be to from one there more broadly. generative ask there then thoughts about business, of follow-up, would within Any it ability of efficient, major models, become AI capabilities. just whatever your get every be. players for It may about in a great. that content, day new you're thinking how more new

Eugene Hall

but So start come AI our biggest clients, us, with lot clients, of a our it productivity with the us. -- of the I I'll in There's back of for one If for of to fantastic future areas can it's clients. our growth I it's and start the uncertainty. lot if provide expectation, is a

best out. tech enterprise the as help this to particular, we're the Within tens of the of function we're as where on leader kinds to the vendor initiatives of And range Gartner, side both side. we AI, but different things our as position sort well. well on have some generative world AI clients of in with applying of in to doing the AI that. of things advanced ranges using training AI AI like and kinds of things our in it generative well other some And translations techniques types facing, like client from as as statistical for like

small to were got we've like so single like going is be be No applications XX%. these And things. improved many tens like it. of little using application productivity Each of are to going

great, meaning X% a out and like productivity us improvement. be and they'll great give maybe work will Some

find have try if actually And impact the to and and a next will don't some one. big on they move we'll

continuous continuous And so innovation, innovation. of a strategy continuous AI we're our as and so have just piece generative are both -- strategy. it and we seeing improvement of continuous improvement another AI

-- will time, will over both it again, clients. transformational, we'll us with it help improve our but So be effectiveness be to continue

which so But not the to things big that so is figure high advantage their great on really is few use a have that is business, there for clients which uncertainty, -- change history us. rate how there's is much for internal are the us business that in about been that it's helping side,

Operator

from Patnaik will Manav question from next Barclays. Our come

Manav Patnaik

was just mid-single side? you're or doing how very that is GTS was to you you I just and on what sales environment get GTS, take to GTS. to sales wondering growth of in of force Gene, right, only I in important double-digit your growth does think digits? talked What long-term GTS, wondering I the back in prepared it double-digit remarks terms about your in why the for kind growth

Eugene Hall

if So growing to there productivity addition believe in room -- that the I look in to GTS, headcount. GTS at is improve we

medium the [indiscernible] both slower GTS we to headcount. the reason is productivity particularly and headcount modestly of the of productivity, growing we vendor so And do growth side believe term our on can we improved business. than bad, grow get can tech we're think over we that we out wanted my

Manav Patnaik

Fair Okay. as why really that you're buybacks, enough. stock if or cheap any is guess, just besides not. just is interpretation anything pipeline on the just part opportunistic But the -- might terms And of back then, of or be holding your there in deal that, of Craig, being I that nature the is it well?

Craig Safian

the our sheet, an on each $X we terms for in or question generate that we we're M&A. billion-plus and us flow or a an the sheet have it's position cash free because in balance where not flexibility buybacks balance and question year, excess of of of cash

into would read and M&A I and pipeline. our not around buyback program opportunism discipline So our anything

and acquisitions, virtually I M&A other would to targets, we I is big a highlight of or I X would bulk nothing thing characterize think medium small tuck-in the the kind like ago. years just Again, all of our did transformational

Operator

Thind come next will from LLC. Surinder Our question Jefferies from

Surinder Thind

question picture here. big a Gene,

end does like that I interpret sounds of tech unusual be in this maybe that about do vendor tech if business think what go-forward and the And like? part do that how a if growth it has of cyclicality about been? sense of cycle should think correctly, you to the the your look in think how you business, to you by basis back As the on normalized And growth vendor XXXX. so, comments normalized

Eugene Hall

X X -- think multiples, extraordinary the up sector. has period, pretty last that time a There over venture tech think number funding, to the period of X we've that in capital times. through years if I went been I So a or X the at during whole you look was it been

And which then of call was tech companies. in unusually spending, bubble, recall again. see an all it, kind can't -- view, so that [indiscernible] don't that venture there my large, a happening I capital I'll of drove and of I happening those

do happen, could think very was unusual. that Anything but I

but We like look didn't that. anything ups years you the downs, that, to at XX saw we see prior If not that. and

would it to be been. cyclical as near And so expect I it has as anywhere

firms capital what a was in that were us, The other wasn't venture then thing happen that in happened investing simultaneously. cyclical. to just it shift There the

they AI. lot now a in in and So venture AI, the focus of capital there's big a were investments not in that

And that back are set of funding get so years X a a years. companies XX-plus as all, over get think, not the a very X funding. look or getting you -- on ago big shift ago years That's this company today there's funding if event to from I that that last usual a going different used that's can't

Craig Safian

X thoughts And Surinder. there, other

inclusive of CV when vendor. to across one, go if has GBS entire back after objective grown our in after think you And and vendor that's growth, GTS for we research historically, tech it's medium-term tech range year So portfolio, XX%, year. year and year about XX% the and after that

or recent the been cycle think abnormal has And do I so most atypical.

normal The other several growth like over to wasn't of that. Gene what think to or is said thing, the just taking end next returning clarify, I quarters. He anything year

'XX into we'll expect tech continue to continue CV we It accelerate to X vendor so past to accelerated quarters, these And our and beyond. accelerate. and has

Surinder Thind

part where on the believe nonsubscription versus the year you that or helpful. strategic you evolved maybe just what's over the you in head how this think to the in has assumptions expectations talk shift, Can That's of last business. where to of going part XXXX? and lead you maybe for And maybe demand gen are pricing it's about then the

Eugene Hall

the kind business is. So I'll of start where with

working both fact, of think -- way stabilizes traffic normalized bubble, conversion and again the -- those. impacted then this level And I went I -- back was through next things pricing where the So over all will be the few same and quarters. I a be traffic earlier to the think, business it our kind business just will of, getting call like we're by we tech and in through

Operator

will Our from Josh Chan from UBS. come next question

Joshua Chan

could was I I wallet talk the if GTS quarter. about this noticed you wondering retention nicely improved selling environment. the that

if change in wonder and I noticed any of So renewals? selling terms there you've

Eugene Hall

to selling environment So of unchanged, I would continues is say our level but the improve. execution

our So is part. think I the the execution across on business you're improved due improvement seeing to

Joshua Chan

color. prudence. on your And then the comment That's Okay. about QX renewal great

because I tougher a were year, in you but negative in that was had much tech think QX, last NCVI slightly spot. vendors

NCVI I guess comment that? vendors I to would out can better on guess, negative roll you so And getting with we tech care in this year, seemingly QX?

Craig Safian

only guide very on is cycle, we're that and the -- CV, a guide on X month we It's and Yes. QX, we're the just dynamic going we're world place. emphasize not would into don't to I

consider NCVI, We QX for every for fighting have like to prudently business be planned are new what we and rate, we appropriately every renewal and win do. in we always

you then quarters on We'll we'll We ago, X and are executing QX or in early had X continue April ago, do May. that. Gene to quarters we update better, mentioned, ago, quarters X as

Joshua Chan

the good in And Great. QX. luck

Craig Safian

you. Thank

Operator

George question will Tong Sachs. from Our next Goldman from come

Keen Fai Tong

talked question, of Just talk quarter. phasing but that watching how or you you're view top Can the of internal taking in? a factors affect swing is heavier prior XQ renewal prudent you of comes quarter new some NCVI the that and about sort external business lower since a could on built about NCVI

Craig Safian

stuff, the normal George. It's

baked level largest business world companies tech our quarter. companies. So small first global operates the some in and obviously have obviously, we with public U.S. business the smaller to in have a in of down We've vendor that the sector Fed got renewals there. We

factors. So unique the challenging. where we had knew large very a were swing to in there's year bit going be we tech vendor was large always that situations renewals Last several

closing with large and like they're throes the of us announced deal ramifications having either M&A the the So going or us layoffs large that process. in through of renewal to

both thousands thousands the last have So the are talking year. about same teams service perspective But a from extent course research growth to a of perspective, quarter. that that and perspective, we're we a did perspective deals don't renewal and over working the our that of a we

the can or those covers growth bit. little any underneath NCVI a up the And so drive and overall down of CV

Keen Fai Tong

context. perhaps helpful to it's That's Can loaded you're GTS year. mid-single distributed sales be and in And year? to headcount front-end planning evenly this double this it. If going of back-end hiring? or GBS the about Got digits digits increase loaded phasing across in then you or the talk

Craig Safian

question, George. great a it's Yes,

in bit be throughout all In to XXXX, increase it I the our though, March hiring we quarter-to-quarter. little numbers. of necessarily you or evenly board growth have number year. must net The spread loaded. a by more We're note, can almost would So so hiring on to not a thing the bounce our one XX, plan around XXXX, the in think quota-bearing of midnight is headcount for I was current deadline we hit back-end on can is

We are much we more the pragmatic how run business. about

numbers be can of little noise the there So a from in quarter-to-quarter. bit

growth do growth QX when quarter not The our and backfill because quarter, promotions a hiring but net other lighter I'd we be we thing say can then all net that's is often quarter, them.

We We quarter. because turnover the in in and lot somewhere backfill a else out XXXX, often look pass-through didn't first for greener people see in money often to leave tend the advance them in opt they quarter in earn of quarter. bit fourth little higher a the often if and first

So were be there not all little volatility of reasons, XXXX bit those in we as a but would in the back-end can in as anticipate being nearly for loaded numbers XXXX. we

Operator

next question from Capital Silber our And from Markets. Jeff BMO come will

Jeffrey Silber

product that in by you the price November, correctly, wanted wondering, I'm this greater than different it was geography? take And board? I and year think and pricing. to you it said you of X%. Is beginning normal? I pushback any increases just get Is across the remember did ask roughly If about I

Craig Safian

X%. with paid increase look don't effect, paint said, on a at specifically X. brush. was product as price it geography. into the On So by a little we goes by broad it you November average, most for the and it But part actually We bit below

that to in our given it offsets And paint that be very sure the well brush, one about, the make wage up we're at right in want more broad more in a not of And expectation we markets we're in the making is on aggressive as markets because we currencies. inflation inflation actually the inflationary, least places, again, at taking pricing look we perspective, will we've the the so that philosophically, key a from on as is is wage talked pricing what amount, pricing. are right our inputs laser-focused so that right sure

of of And pushback. it's terms then price been the related in so increase, to note nothing standard pushback,

for justifies I and our products, sure modest each that are price that constantly we clients think that top our our we're very on and year. making focused very delivery on the we increase improving put

Jeffrey Silber

helpful. about That's just Right. different shift If gears, really talk geographies. some I could maybe

what but said and was think specifically the growth trends China, there? you I the really I'm were that in Europe curious broad-based,

Craig Safian

Yes.

of has basically to in there. nothing in or so So we environment pretty XXXX, it's no Europe Europe consistent what been -- the selling half saw second from the report news

we've with in pretty there second success half especially year, had improvement been course has over a some like in but challenging, tier selling I side, the XXXX. of and would China. that is China to What say it's consistent performance over been larger our the the some On below clients the largely of seen

Operator

question come Jason Haas will next from from Our Wells Fargo.

Jason Haas

GTS productivity made execution. the saw about the comments which drive and to XQ, you then be headcount, difficult to some can fact that despite from I earlier improved XQ you you better know increased

of what curious in drive that? to changes could on I more terms able provide color So how that was some you've if been you made you've and

Eugene Hall

focused processes. when recruiting sure constantly And training, we're then the them we and the stuff, give very so right making people. hire right we're on our is So get we normal we basically is, it's which the right improving people,

improving constantly are base, on focus training. also big We our trading

innovating if And the we I always tools look those then at our quarter-by-quarter. sales again, to like literally force, another are tools, those always provide taken we're level

we how basically it's salespeople. the and so by we we And who them recruit, our train tools give

Jason Haas

it. about And there's CV, an comment also expectation. then know CV would but Got don't accelerate. a about comment growth That's helpful. guide continue to a you earlier there's to I

that a in that the here of sort sort expected each hoping reported should finer be potentially to or you here? above you that, of that bottom it more are X.X% quarter can point be be the saying XQ and So could is on you that rough

Craig Safian

that of is course comment when be to would more XXXX, X.X%. XXXX Yes. Jason, think expect we and over the I exit than higher the we

in talked first a to not line about to to trend and the digit higher growth straight more not straight, XX% go accelerate will of exit a and medium-term precisely may will X.X%. so again, precisely As CV slope goal with in we've it the And that continuing to may objective double our the be towards XX%. past, that or rate than X be that the up then

Operator

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

Eugene Hall

So today's call. expectations. results growth from to accelerate. take continues delivered ahead vendor Tech here's you financial Gartner what I'd away to CV like of

We have a vast addressable market opportunity.

have proposition. We compelling value strong a and

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

shareholders shareholders for our insight of excess for our by providing program. value prudently growth, to income to create actual future well capital investing to tools returning repurchase flow our clients, generating through and net continue objective and our cash in We'll guidance free

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

Operator

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

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

Gartner (IT) 4 Feb 252024 Q4 Earnings call transcript