Gartner Q1 2025 slides: modest growth across segments, maintains full-year guidance

Gartner Inc (NYSE:IT) reported its first quarter 2025 results on May 6, showing modest growth across all business segments while maintaining its full-year guidance despite some mixed signals in new business acquisition.

Executive Summary

Gartner delivered consolidated revenue of $1.53 billion in Q1 2025, representing a 4.2% year-over-year increase (5.7% FX neutral). The company’s adjusted EBITDA grew 0.7% to $385 million, while adjusted EPS increased 1.7% to $2.98.

"Our first quarter results demonstrate continued growth across all segments, with particularly strong performance in our Global Business Sales division," the company noted in its presentation.

As shown in the following comprehensive summary of key financial metrics:

The company’s Global Contract Value (CV) reached $5.1 billion, growing 6.7% year-over-year, with Global Business Sales CV showing the strongest performance at 10.8% growth. However, the quarterly Net Contract Value Increase (NCVI) was negative at -$63 million, suggesting some challenges in new business acquisition despite the overall positive growth narrative.

Quarterly Performance Highlights

Gartner’s Research segment, which accounts for the largest portion of revenue, grew 4.2% year-over-year to $1.32 billion, with a strong contribution margin of 74.5%. The segment maintained high client retention at 84.4% and impressive wallet retention at 103.0%, indicating strong client relationships despite the negative quarterly NCVI.

The following slide illustrates the Research segment’s performance:

The Conferences segment generated $73 million in revenue, up 3.6% year-over-year (5.4% FX neutral), with a contribution margin of 37.7%. The company hosted 10 destination conferences in Q1 with 11,911 attendees, achieving same-conference revenue growth of 12.1%.

Meanwhile, the Consulting segment delivered $140 million in revenue, growing 3.7% year-over-year (5.3% FX neutral), with a contribution margin of 38.2%. The segment maintained a healthy backlog of $214 million and a utilization rate of 63.9%.

Detailed Financial Analysis

Gartner’s research metrics reveal some interesting trends across its sales divisions. Global Technology Sales, which represents the largest portion of contract value at $3.85 billion, grew 5.5% year-over-year but experienced a quarterly NCVI of -$58 million. Global Business Sales, though smaller at $1.2 billion in contract value, showed stronger growth at 10.8% but also had a negative quarterly NCVI of -$5 million.

The following detailed breakdown of research metrics provides further insight:

The company’s free cash flow for the quarter was $288 million, with a strong free cash flow conversion rate. The following chart illustrates the company’s free cash flow conversion over the last twelve months:

Gartner’s balance sheet remains robust, with $2.1 billion in cash and total debt of $2.5 billion, resulting in a gross debt to adjusted EBITDA ratio of 1.6x and a net debt to adjusted EBITDA ratio of just 0.2x. The company maintains investment-grade debt ratings from all major agencies.

The following slide details the company’s capital structure and allocation strategy:

Forward-Looking Statements

Despite the mixed signals in Q1 performance, Gartner maintained its full-year 2025 guidance, projecting consolidated revenues of at least $6.535 billion, adjusted EBITDA of at least $1.535 billion, and adjusted EPS of at least $11.70.

The detailed guidance breakdown by segment is shown in the following slide:

For the medium term, Gartner continues to target growth rates of 12-16% for Research, 5-10% for Conferences, and 3-8% for Consulting, with overall revenue growth of at least 10%. The company expects adjusted EBITDA growth to exceed revenue growth, and adjusted EPS growth to exceed adjusted EBITDA growth.

Strategic Initiatives

Gartner’s capital allocation strategy focuses on maintaining financial flexibility while returning value to shareholders. The company targets a leverage ratio of 2-2.5x and maintains approximately $300-500 million in cash for business operations.

Free cash flow deployment priorities include offsetting equity dilution, opportunistic stock repurchases, and strategic tuck-in acquisitions. In Q1 2025, the company repurchased $163 million worth of shares, with approximately $870 million remaining in its repurchase authorization.

The quarterly financial summary charts below illustrate the company’s performance trends over recent quarters:

Gartner’s stock closed at $426.98 on May 5, 2025, down 0.12% for the day, and was trading down 3.25% in premarket trading on May 6, suggesting some investor concerns despite the company’s maintained guidance.

While Gartner continues to demonstrate resilience across its business segments, the negative quarterly NCVI and modest growth rates compared to previous quarters may raise questions about the company’s ability to achieve its medium-term growth targets. However, the strong wallet retention rates and robust balance sheet provide a solid foundation for future growth initiatives.

Full presentation:

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