Slide 1: Third Quarter 2024 Results
Third Quarter 2024 Results November 5, 2024 © 2024 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. This presentation, including all supporting materials, is proprietary to Gartner, Inc. and/or its affiliates and is for t
Slide 2: Forward Looking Statement and Explanatory Note
Forward Looking Statement and Explanatory Note Statements contained in this presentation regarding the growth and prospects of the business, the Company’s projected 2024 financial results, long-term objectives and all other statements in this presentation other than recitation of historical facts ar
Slide 3: Contents
Contents Consolidated Financials and Guidance 3Q 2024 Financial Results Page 4 Updated 2024 Guidance Page 5 Segment Results Research Page 6 - 8 Conferences Page 9 Consulting Page 10 Capital Allocation Capital Structure and Allocation Page 11 Free Cash Flow Page 12 GAAP Financial Statements 3Q 2024 G
Slide 4: 3Q 2024 Growth and Financial Results
3Q 2024 Growth and Financial Results Global Contract Value (CV) Consolidated Revenues Research Revenues Free Cash Flow 7.3% $5.0B 5.4% $1,484M 5.1% $1,281M $565M FX Neutral: 5.6% FX Neutral: 5.4% 68.0% Contribution Margin 73.7% Contribution Margin Global Technology Sales CV Adj. EBITDA Conference Re
Slide 5: Guidance
Guidance 2024 Guidance • Research Revenues: very high visibility of subscription $ millions, except per share amounts; shares in millions revenues based on CV results to date; non-subscription revenues outlook unchanged from last quarter. Guidance as of July 30, Updated Guidance as of 2024 Nov 5, 20
Slide 6: Research Metrics
Research Metrics Global Technology Sales $ millions 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 Contract Value 3,563 3,578 3,643 3,779 3,757 3,797 3,865 Y/Y FX Neutral Growth 8.8 % 7.3 % 6.5 % 6.3 % 5.4 % 6.1 % 6.1 % Quarterly NCVI 9 14 66 136 -22 40 67 Quota Bearing Head Count 3,666 3,664 3,630 3,641 3,602
Slide 7: Research: Additional Metrics
Research: Additional Metrics Global Technology Sales $ millions 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 LTM Net Contract Value Increase (NCVI) 288 244 223 225 194 219 221 Productivity ($ thousands) 96 75 64 62 53 60 61 Y/Y Growth -31.6% -44.8% -51.6% -43.4% -44.9% -20.6% -5.3% Client Enterprises 13,357 1
Slide 8: Research Segment
Research Segment Revenues $ millions Contribution Margin 1,281 74.5% 1,268 1,266 74.1% 1,243 73.9% 73.7% 73.7% 1,217 1,219 73.4% 1,208 73.3% 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 $ millions 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 2023 Revenues 1,217 1,208 1,219 1,243 1,268
Slide 9: Conferences Segment
Conferences Segment Revenues $ millions Contribution Margin 58.3% 58.1% 214 50.4% 186 169 41.4% 40.2% 76 35.8% 65 57 70 33.2% 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 $ millions 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 2023 Revenues 65 169 57 214 70 186 76 505 Y/Y Growth 524.3
Slide 10: Consulting Segment
Consulting Segment Revenues $ millions Contribution Margin 143 40.0% 40.3% 37.4% 36.5% 37.6% 135 133 32.5% 127 128 128 27.1% 126 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 $ millions 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 2023 Revenues 127 126 133 128 135 143 128 515 Y/Y Growt
Slide 11: Capital Structure and Allocation
Capital Structure and Allocation $ billions 9/30/2024 Rate Maturity Capital Structure Cash 1.8 nm nm • Optimizes financial leverage benefits and financial flexibility • Target 2-2.5x leverage1 Revolver 0.3 Term SOFR + 135 2029 • ~$300-500M cash is needed to run the business 2028 Bonds 0.8 4.50% 2028
Slide 12: Free Cash Flow Conversion (LTM)
Free Cash Flow Conversion (LTM) % of Revenue - LTM 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 Our typical Adjusted EBITDA margin to Free Cash Flow Adjusted EBITDA 27.1 26.4 26.0 25.1 24.9 25.0 24.8 margin conversion is about 4-6 percentage points. Cash interest, net (1.7) (1.5) (1.3) (1.4) (0.9) (0.8) (0.7)
Slide 13: 3Q 2024 GAAP Financial Statements
3Q 2024 GAAP Financial Statements 13 © 2024 Gartner, Inc. and/or its affiliates. All rights reserved.
Slide 14: Condensed Consolidated Statements of Operations
Three Months Ended Condensed September 30, 2024 2023 Consolidated Revenues: Research $ 1,280.9 $ 1,218.8 Statements of Conferences Consulting 75.8 127.6 57.2 132.8 Total revenues 1,484.3 1,408.8 Operations Costs and expenses: Cost of services and product development 475.3 450.8 Unaudited; in million
Slide 15: Condensed Consolidated Balance Sheets
September 30, December 31, Assets 2024 2023 Condensed Current assets: Cash and cash equivalents $ 1,768.3 $ 1,319.0 Consolidated Fees receivable 1,305.8 1,601.2 Deferred commissions 304.0 380.5 Balance Prepaid expenses and other current assets 173.5 127.2 Total current assets 3,551.6 3,427.9 Sheets
Slide 16: Condensed Consolidated Statement of Cash Flows
Three Months Ended Condensed Operating activities: 2024 September 30, 2023 Net income $ 415.0 $ 180.0 Consolidated Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 51.3 48.5 Stock-based compensation expense 34.3 27.0 Statement of Deferre
Slide 17: Appendix
Appendix 17 © 2024 Gartner, Inc. and/or its affiliates. All rights reserved.
Slide 18: Consolidated Financial Summary
Consolidated Financial Summary $ and shares in millions except per share amounts 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 2023 Revenues 1,409 1,503 1,409 1,586 1,473 1,595 1,484 5,907 Y/Y Growth 11.6% 9.2% 5.8% 5.4% 4.5% 6.1% 5.4% 7.9% Y/Y FX Neutral Growth 14.3% 10.0% 4.9% 4.4% 4.6% 6.9% 5.6% 8.2% Contri
Slide 19: Quarterly Financial Summary Charts
Quarterly Financial Summary Charts Contract Value $ millions @ '24 rates Quarterly Net Contract Value Increase (NCVI) $ millions 5,042 182 4,937 4,880 4,870 102 104 4,698 67 41 4,596 25 4,555 (10) 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 Revenues $ millions Adj. EBITDA $
Slide 20: Non-GAAP P&L
Non-GAAP P&L $ millions except per share amounts 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 2023 Revenues 1,409 1,503 1,409 1,586 1,473 1,595 1,484 5,907 Less Cost of Services 435 487 451 530 459 513 475 1,903 Contribution 974 1,016 958 1,056 1,013 1,082 1,009 4,004 Less SG&A 657 680 661 704 690 712 712 2,7
Slide 21: Definitions
Definitions Adjusted EBITDA and Adjusted EBITDA Margin: Represents GAAP net income (loss) adjusted for: (i) interest expense, net; (ii) tax provision (benefit); (iii) gain on event cancellation insurance claims, as applicable; (iv) gain/loss on divestitures, as applicable; (v) other (income) expense
Slide 22: Definitions of Key Metrics/Calculations
Definitions of Key Metrics/Calculations Segment Business Measurements Research Contract value represents the dollar value attributable to all of our subscription-related contracts. It is calculated as the annualized value of all contracts in effect at a specific point in time, without regard to the
Slide 23: Non-GAAP Reconciliations
Non-GAAP Reconciliations 23 © 2024 Gartner, Inc. and/or its affiliates. All rights reserved.
Slide 24: Non-GAAP Reconciliations
Non-GAAP Reconciliations $ millions (a) Consists of the gain on event cancellation insurance claims for events cancelled in Reconciliation- Net Income to Adjusted EBITDA: 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 2020 and 2021. Net Income 295.8 198.0 180.0 208.6 210.5 229.5 415.0 (b) Consists of charges fo
Slide 25: Non-GAAP Reconciliations
Non-GAAP Reconciliations In millions except per share amounts Reconciliations - GAAP Net Income to Adjusted Net Income: 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 (a) Consists of non-cash GAAP net income 295.8 198.0 180.0 208.6 210.5 229.5 415.0 amortization charges from Acquisition and other adjustments: —
Slide 26: Non-GAAP Reconciliations
Non-GAAP Reconciliations $ millions Reconciliation - Interest, net to Non-GAAP Interest, net 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 Interest, net 27.4 24.6 21.8 20.5 19.2 20.0 18.0 Less amortization of deferred financing fees (1.2) (1.2) (1.2) (1.2) (1.5) (1.0) (1.0) Non-GAAP Interest, net 26.2 23.4 20.
Slide 27: Non-GAAP Reconciliations - 2024 Guidance
Non-GAAP Reconciliations - 2024 Guidance Financial Outlook Reconciliation: GAAP Net Income to Adjusted EBITDA Financial Outlook Reconciliation: GAAP Diluted EPS to Adjusted EPS 2024 2024 (unaudited; $ in millions) Guidance (unaudited; $ in millions) Guidance GAAP net income ≥$ 1,075 GAAP Diluted EPS