Gartner Q3 2025 slides: EPS growth outpaces revenue amid strategic AI focus

Introduction & Market Context

Gartner Inc. (NYSE:IT) presented its third-quarter 2025 results on November 4, showing solid earnings growth despite modest revenue increases in a challenging selling environment. The company’s shares responded positively, rising 3.45% in premarket trading to $254.40, reflecting investor confidence in Gartner’s strategic direction and financial management.

The IT research and advisory firm reported adjusted earnings per share of $2.76, exceeding analyst expectations of $2.43 by 13.58%, while revenue reached $1.5 billion, in line with forecasts. This performance highlights Gartner’s ability to drive profitability even as some business segments faced headwinds.

Quarterly Performance Highlights

Gartner’s third-quarter results showed mixed performance across its business segments. Overall contract value grew 3.0% year-over-year to $5.0 billion, while consolidated revenue increased 2.7% to $1.5 billion. Notably, when excluding the U.S. Federal Government sector, contract value growth was stronger at 6%.

As shown in the following comprehensive overview of key metrics:

The company’s core Insights segment (formerly Research) demonstrated solid growth with revenues increasing 5.1% to $1.3 billion. This segment maintained an impressive contribution margin of 76.7%, underscoring its role as Gartner’s profit engine. Global Business Sales showed particularly strong contract value growth of 7.1% to $1.2 billion, outpacing Global Technology Sales, which grew 1.7% to $3.8 billion.

However, both the Conferences and Consulting segments experienced revenue declines of 1.6% and 3.2% respectively. The Conferences segment hosted 10 destination events with 11,454 attendees during the quarter, while Consulting maintained a backlog of $187 million with a utilization rate of 59.7%.

Adjusted EBITDA increased 1.9% to $347 million, with adjusted EPS growing 10.4% to $2.76, significantly outpacing revenue growth and reflecting effective cost management and share repurchases.

Strategic Initiatives

Gartner continues to position itself as a leader in AI advisory services, helping clients navigate complex technology implementations and governance frameworks. During the earnings call, CEO Gene Hall emphasized that "AI will be one of the most innovative and pervasive technologies in history," highlighting the company’s strategic focus on this area.

The company’s client value proposition is built around providing objective, unbiased insights through various delivery channels, including reports, analyst inquiries, conferences, networking, and benchmarking. This approach is supported by 2,500+ former practitioners and proprietary data from over 500,000 client interactions and 27,000 vendor briefings annually.

As illustrated in this client value proposition framework:

The company also launched a new AI-driven tool called "Ask Gartner," enhancing its product offerings and demonstrating its commitment to innovation in its own service delivery.

Forward-Looking Statements

Gartner raised its full-year 2025 guidance, projecting consolidated revenues of at least $6.475 billion, adjusted EBITDA of at least $1.575 billion, and adjusted EPS of at least $12.65. The company also expects free cash flow of at least $1.145 billion for the year.

The updated guidance is presented in detail below:

Management expressed confidence in future growth, anticipating contract value growth to re-accelerate in 2026 to high single digits, with a return to double-digit growth expected by 2027. This outlook comes despite ongoing challenges in the selling environment, including longer sales cycles and macroeconomic pressures affecting client budgets.

Financial Position

Gartner maintains a strong financial position with $1.4 billion in cash and $2.5 billion in total debt as of September 30, 2025. The company targets a leverage ratio of 2-2.5x and has $0.7 billion in unused revolver capacity.

The company’s capital allocation strategy prioritizes offsetting equity dilution, stock repurchases, and tuck-in acquisitions. In Q3 2025, Gartner repurchased $1.1 billion in shares, demonstrating its commitment to returning value to shareholders.

As shown in this capital structure and allocation overview:

Free cash flow conversion remains strong at 137.4% of GAAP net income on a last-twelve-months basis, providing Gartner with ample resources to fund its strategic initiatives and capital return program.

The quarterly financial trends can be observed in the following chart series:

Segment Analysis

The Insights segment (formerly Research) continues to be Gartner’s primary revenue and profit driver. This segment’s high contribution margin of 76.7% underscores its importance to the company’s overall profitability. Client retention metrics remain strong, with wallet retention at 104% for Global Technology Sales and 105% for Global Business Sales.

The Conferences segment, while experiencing a slight revenue decline, maintained a respectable contribution margin of 36.6%. The company held 10 destination conferences in Q3 with 11,454 attendees. The segment’s performance is expected to improve as in-person events continue to normalize post-pandemic.

The Consulting segment faces the most significant challenges, with revenue declining 3.2% year-over-year and a contribution margin of 28.5%. Billable headcount stood at 924 with a utilization rate of 59.7%, indicating potential for operational improvements.

Market Outlook

Despite challenges in the selling environment, Gartner’s strategic positioning in high-demand areas like AI advisory services provides a foundation for future growth. The company’s guidance reflects confidence in its business model and market opportunities, even as it navigates macroeconomic uncertainties.

Risks identified include continued challenges in the selling environment with longer sales cycles, exposure to tariff-affected industries impacting contract value growth, potential market saturation in certain technology sectors, and macroeconomic pressures that could affect client budgets and spending.

Nevertheless, Gartner’s strong free cash flow generation, high-margin business model, and strategic focus on emerging technologies position it well for sustainable long-term growth as the technology advisory market evolves.

Full presentation:

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