Slide 1: First Quarter 2024 Results
First Quarter 2024 Results April 30, 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 the
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 1Q 2024 Financial Results Page 4 Consolidated Financial Summary Page 5 Updated 2024 Guidance Page 6 Segment Results Research Page 7 - 9 Conferences Page 10 Consulting Page 11 Capital Allocation Capital Structure and Allocation Page 12 Free Cash Flow Page
Slide 4: 1Q 2024 Growth and Financial Results
1Q 2024 Growth and Financial Results Global Contract Value (CV) Consolidated Revenue Research Revenue Free Cash Flow 6.9% $4.9B 4.5% $1,473M 4.2% $1,268M $166M FX Neutral: 4.6% FX Neutral: 4.1% 68.8% Contribution Margin 74.5% Contribution Margin Global Technology Sales CV Adj. EBITDA Conference Reve
Slide 5: Consolidated Financial Summary
Consolidated Financial Summary $ and shares in millions except per share amounts 1Q23 2Q23 3Q23 4Q23 1Q24 2023 Revenue 1,409 1,503 1,409 1,586 1,473 5,907 Y/Y Growth 11.6% 9.2% 5.8% 5.4% 4.5% 7.9% Y/Y FX Neutral Growth 14.3% 10.0% 4.9% 4.4% 4.6% 8.2% Contribution 974 1,016 958 1,056 1,013 4,004 Cont
Slide 6: Guidance
Guidance 2024 Guidance • Research Revenue: subscription revenue reflects CV $ millions, except per share amounts; shares in millions bottoming and re-accelerating during 2024; non-subscription revenue reflects a shift to higher quality traffic to drive better Guidance as pricing and revenue over tim
Slide 7: Research Metrics
Research Metrics Global Technology Sales $ millions 1Q23 2Q23 3Q23 4Q23 1Q24 Contract Value 3,563 3,578 3,643 3,779 3,757 Y/Y FX Neutral Growth 8.8 % 7.3 % 6.5 % 6.3 % 5.4 % Quarterly NCVI 9 14 66 136 -22 Quota Bearing Head Count 3,666 3,664 3,630 3,641 3,602 Y/Y Growth 21.8 % 13.2 % 4.5 % 0.3 % -1.
Slide 8: Research: Additional Metrics
Research: Additional Metrics Global Technology Sales $ millions 1Q23 2Q23 3Q23 4Q23 1Q24 LTM Net Contract Value Increase (NCVI) 288 244 223 225 194 Productivity ($ thousands) 96 75 64 62 53 Y/Y Growth -31.6% -44.8% -51.6% -43.4% -44.9% Client Enterprises 13,357 13,247 13,124 13,122 12,815 Contract V
Slide 9: Research Segment
Research Segment Revenues $ millions Contribution Margin 74.5% 1,268 74.1% 1,243 73.9% 1,217 1,219 73.4% 1,208 73.3% 1Q23 2Q23 3Q23 4Q23 1Q24 1Q23 2Q23 3Q23 4Q23 1Q24 $ millions 1Q23 2Q23 3Q23 4Q23 1Q24 2023 Revenue 1,217 1,208 1,219 1,243 1,268 4,887 Y/Y Growth 7.1% 5.7% 6.2% 5.5% 4.2% 6.1% Y/Y FX
Slide 10: Conferences Segment
Conferences Segment Revenues $ millions Contribution Margin 214 169 58.3% 41.4% 50.4% 35.8% 33.2% 65 57 70 1Q23 2Q23 3Q23 4Q23 1Q24 1Q23 2Q23 3Q23 4Q23 1Q24 $ millions 1Q23 2Q23 3Q23 4Q23 1Q24 2023 Revenue 65 169 57 214 70 505 Y/Y Growth 524.3% 48.8% -25.7% 13.8% 8.4% 29.8% Y/Y FX Neutral Growth 544
Slide 11: Consulting Segment
Consulting Segment Revenues $ millions Contribution Margin 133 135 127 128 40.0% 40.3% 126 37.4% 36.5% 27.1% 1Q23 2Q23 3Q23 4Q23 1Q24 1Q23 2Q23 3Q23 4Q23 1Q24 $ millions 1Q23 2Q23 3Q23 4Q23 1Q24 2023 Revenue 127 126 133 128 135 515 Y/Y Growth 9.5% 4.8% 24.1% -7.0% 6.0% 6.8% Y/Y FX Neutral Growth 14.
Slide 12: Capital Structure and Allocation
Capital Structure and Allocation $ billions 3/31/2024 Rate Maturity Capital Structure Cash 1.2 nm nm • Optimizes financial leverage benefits and financial flexibility • Target 2-2.5x leverage1 Revolver 0.3 Term SOFR + 135 2029 • ~$200M cash is needed to run the business 2028 Bonds 0.8 4.50% 2028 202
Slide 13: Free Cash Flow Conversion (LTM)
Free Cash Flow Conversion (LTM) % of Revenue - LTM 1Q23 2Q23 3Q23 4Q23 1Q24 Our typical Adjusted EBITDA margin to Free Cash Flow Adjusted EBITDA 27.1 26.4 26.0 25.1 24.9 margin conversion is about 4-6 percentage points. Cash interest, net (1.7) (1.5) (1.3) (1.4) (0.9) Our typical Free Cash Flow conv
Slide 14: 1Q 2024 GAAP Financial Statements
1Q 2024 GAAP Financial Statements 14 © 2024 Gartner, Inc. and/or its affiliates. All rights reserved.
Slide 15: Condensed Consolidated Statements of Operations
Three Months Ended Condensed 2024 March 31, 2023 Consolidated Revenues: Research $ 1,268.2 $ 1,217.3 Statements of Conferences Consulting 70.1 134.6 64.6 127.0 Total revenues 1,472.9 1,408.9 Operations Costs and expenses: Cost of services and product development 459.4 435.1 Unaudited; in millions, e
Slide 16: Condensed Consolidated Balance Sheets
March 31, December 31, Assets 2024 2023 Condensed Current assets: Cash and cash equivalents $ 1,235.8 $ 1,319.0 Consolidated Fees receivable 1,566.0 1,601.2 Deferred commissions 350.7 380.5 Balance Prepaid expenses and other current assets 173.8 127.2 Total current assets 3,326.3 3,427.9 Sheets Prop
Slide 17: Condensed Consolidated Statement of Cash Flows
Three Months Ended March 31, Operating activities: 2024 2023 Condensed Net income Adjustments to reconcile net income to net cash provided by operating activities: $ 210.5 $ 295.8 Depreciation and amortization 49.3 46.6 Consolidated Stock-based compensation expense Deferred taxes 50.5 (17.8) 45.0 (7
Slide 18: Appendix
Appendix 18 © 2024 Gartner, Inc. and/or its affiliates. All rights reserved.
Slide 19: Quarterly Financial Summary Charts
Quarterly Financial Summary Charts Contract Value $ millions @ '24 rates Quarterly Net Contract Value Increase (NCVI) $ millions 182 4,880 4,870 102 4,698 41 25 4,596 (10) 4,555 1Q23 2Q23 3Q23 4Q23 1Q24 1Q23 2Q23 3Q23 4Q23 1Q24 Revenues $ millions 1,586 Adj. EBITDA $ millions 384 386 382 379 1,503 1
Slide 20: Non-GAAP P&L
Non-GAAP P&L $ millions except per share amounts 1Q23 2Q23 3Q23 4Q23 1Q24 2023 Revenue 1,409 1,503 1,409 1,586 1,473 5,907 Less Cost of Services 435 487 451 530 459 1,903 Contribution 974 1,016 958 1,056 1,013 4,004 Less SG&A 657 680 661 704 690 2,702 Plus Equity Comp 45 32 27 26 51 130 Plus Other A
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 2020. Net Income 295.8 198.0 180.0 208.6 210.5 (b) Consists of charges for stock-based compensation. Int
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 (a) Consists of non-cash GAAP net income 295.8 198.0 180.0 208.6 210.5 amortization charges from Acquisition and other adjustments: acquired intangibles. A
Slide 26: Non-GAAP Reconciliations
Non-GAAP Reconciliations $ millions Reconciliation - Interest, net to Non-GAAP Interest, net 1Q23 2Q23 3Q23 4Q23 1Q24 Interest, net 27.4 24.6 21.8 20.5 19.2 Less amortization of deferred financing fees (1.2) (1.2) (1.2) (1.2) (1.5) Non-GAAP Interest, net 26.2 23.4 20.6 19.3 17.7 Effective GAAP Tax R
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 (unaudited; $ in millions) 2024 Guidance (unaudited; $ in millions) 2024 Guidance GAAP net income ≥$ 775 GAAP Diluted EPS (