Gartner, Inc. · NYSE:IT
Gartner — Q4 2017 Earnings Presentation
22 slides from Gartner's earnings presentation, Feb 6, 2018
Slide 1: Fourth Quarter 2017 Results
0 CONFIDENTIAL AND PROPRIETARY I © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Fourth Quarter 2017 Results February 6, 2018
Slide 2: Forward-looking statements
1 CONFIDENTIAL AND PROPRIETARY I © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Statements contained in this presentation regarding the growth and prospects of the business, the Company’s projected 2017 financial results, long- term objectives and all other statements in this prese
Slide 3: Highlights: Fourth Quarter 2017
2 CONFIDENTIAL AND PROPRIETARY I © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Highlights: Fourth Quarter 2017 Heritage Gartner Total FX Neutral CV Growth of 16% y/y improvements in both client and wallet retention metrics with strong productivity growth Adjusted EBITDA of $221M A
Slide 4: Overview
3 CONFIDENTIAL AND PROPRIETARY I © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Overview: Fourth Quarter 2017 a) Please refer to appendix slides for definition of non-GAAP measures and the reconciliation to the most directly comparable GAAP measures b) Net Debt is calculated by sub
Slide 5: Research
4 CONFIDENTIAL AND PROPRIETARY I © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Research: Fourth Quarter 2017 Heritage Gartner Research: Total FX neutral contract value growth of 16% Adjusted FX neutral revenue growth of 17% New business growth of 23% year- on-year Average
Slide 6: Heritage Gartner Research Highlights
5 CONFIDENTIAL AND PROPRIETARY I © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Heritage Gartner Research Highlights Direct Quota Bearing Headcount FX Neutral Sales Productivity* $116K $105K$104K $99K$101K Q4’17Q2’17Q1’17Q4’16 Q3’17 *Excludes L2 2,807 2,716 2,574 2,4602,423 Q3’17Q4
Slide 7: Events
6 CONFIDENTIAL AND PROPRIETARY I © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Events: Fourth Quarter 2017 a) Please refer to appendix slides for definition of non-GAAP measures and the reconciliation to the most directly comparable GAAP measures b) Includes Heritage Gartner and C
Slide 8: Consulting
7 CONFIDENTIAL AND PROPRIETARY I © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Consulting: Fourth Quarter 2017 137134128125123 Q4’17 +11% Q3’17Q2’17Q1'17Q4'16 9591918989 Q3’17 +7% Q4’17Q2’17Q1’17Q4’16 Managing Partners Consulting Backlog* ($M) * No longer includes backlog associat
Slide 9: Talent Assessment & Other
8 CONFIDENTIAL AND PROPRIETARY I © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Talent Assessment & Other: Fourth Quarter 2017 Talent Assessment & Other includes CEB's previously disclosed Talent Assessment business as well as certain CEB non-subscription based talent products an
Slide 10: Cash Flow Highlights
9 CONFIDENTIAL AND PROPRIETARY I © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Cash Flow Highlights: Fourth Quarter 2017 • The decrease to Operating and Free cash flow on a comparable basis versus prior year is due to higher interest and capex • In addition, there was a one-time,
Slide 11: Balance Sheet and Capital Structure
10 CONFIDENTIAL AND PROPRIETARY I © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Net Debt* / EBITDA Ratio Balance Sheet and Capital Structure: Fourth Quarter 2017 *Net Debt in Leverage Ratio calculated using LTM of Adjusted EBITDA of $697M of Adjusted EBITDA Revolver capacity was $
Slide 12: 2018 Guidance
11 CONFIDENTIAL AND PROPRIETARY I © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. 2018 Guidance In $ millions, except per share amounts 2018 Guidance Range Research adjusted revenue 3,100 - 3,150 Consulting adjusted revenue 340 - 355 Events adjusted revenue 380 - 400 Talent Assessme
Slide 13: Additional 2018 Guidance Items
12 CONFIDENTIAL AND PROPRIETARY I © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Additional 2018 Guidance Items In $ millions, unless stated Stock-based compensation 73 - 74 Depreciation 80 - 81 Amortization of intangible assets 190 Effective tax rate (GAAP) 27 - 28% Effective tax
Slide 14: GAAP and Adjusted EPS 2018 Outlook
13 CONFIDENTIAL AND PROPRIETARY I © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. $0.31 $(1.59) $0.94 $1.49 GAAP and Adjusted EPS 2018 Outlook ~$0.08 ~$0.83 ~$1.54 $1.26 – $1.66 Adjusting items calculated at the midpoint of guidance range Amortization of Acquired Intangibles GAAP EP
Slide 15: Appendix
14 CONFIDENTIAL AND PROPRIETARY I © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Appendix
Slide 16: Adjusted Revenue Reconciliation – 2018 Guidance
15 CONFIDENTIAL AND PROPRIETARY I © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Adjusted Revenue Reconciliation – 2018 Guidance a) Please refer to appendix slides for definition of non-GAAP measures and the reconciliation to the most directly comparable GAAP measures In $ millions
Slide 17: Operating Income (Loss) to Adjusted EBITDA Reconciliation
16 CONFIDENTIAL AND PROPRIETARY I © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Operating Income (Loss) to Adjusted EBITDA(a) Reconciliation a) Adjusted EBITDA is based on GAAP operating income adjusted for certain normalizing adjustments b) Consists of charges for stock-based com
Slide 18: Adjusted Earnings Per Share
17 CONFIDENTIAL AND PROPRIETARY I © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Adjusted Earnings Per Share(a): Fourth Quarter 2017 a) Adjusted earnings per share represents GAAP diluted earnings per share adjusted for the per share impact of certain items directly-related to acqu
Slide 19: Operating Cash Flow to Free Cash Flow Reconciliation
18 CONFIDENTIAL AND PROPRIETARY I © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Operating Cash Flow to Free Cash Flow(a) Reconciliation a) Represents cash provided by operating activities determined in accordance with GAAP plus payments for acquisition and integration items direct
Slide 20: Adjusted Segments
19 CONFIDENTIAL AND PROPRIETARY I © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Adjusted Segments Three Months Ended December 31, 2016 Combined(a) Three Months Ended December 31, 2017 As Reported a) Please refer to Exhibit 99.2 filed with Form 8-K on August 8, 2017 for a breakdown
Slide 21: Definitions
20 CONFIDENTIAL AND PROPRIETARY I © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Definitions Adjusted Revenue: Represents GAAP revenue plus non-cash fair value adjustments on pre-acquisition deferred revenues. The majority of the pre-acquisition deferred revenue is recognized ratab
Slide 22: AND PROPRIETARY I
21 CONFIDENTIAL AND PROPRIETARY I © 2018 Gartner, Inc. and/or its affiliates. All rights reserved.