Gartner, Inc.

Good morning and welcome to the Gartner First Quarter 2018 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to David Cohen, Gartner's GDP of Investor Relations. Please go ahead.

Thank you, Heather, and good morning, everyone. We appreciate your joining us today for Gartner's fourth quarter 2018 earnings call. With me today are Gene Hall, Chief Executive Officer, and Craig Safian, Chief Financial Officer. This call will include a discussion of fourth quarter 2018 financial results and our outlook for 2019 as disclosed in today's press release. In addition to today's press release, we have provided an earnings supplement for investors and analysts in which we provide a detailed review of our financials and business metrics. In the earnings supplement, we included a full non-GAAP P&L excluding divested operations. This table combines Heritage Gartner and Heritage CUB and removes the operating results of the divestitures starting January 1, 2017. For 2018, the table provides results as if we had used the net proceeds from the divestitures to repay debt on December 31, 2017. This gives you a view down to adjusted EPS for 2018 that reflects how we are thinking about the business as we move into 2019. Please note our events segment has been renamed conferences to align with the business operations. Also, in our discussion of global business sales, or GBS, we will refer to the GXL product. These are the products for business leaders across the enterprise. Gartner for marketing leaders is GML. Gartner for finance leaders is GFL, and so on. We have introduced six of these products over the past five quarters and will introduce more in the future. In aggregate, we refer to these products for business leaders as GXL. We have posted the press release and the earnings supplement on our website, investor.gartner.com. Following comments by Jean and Craig, we will open up the call for your questions. We ask that you limit your questions to one and one follow-up. On the call, unless stated otherwise, all references to revenue and contribution margin are for adjusted revenue excluding divested operations and adjusted contribution margin excluding divested operations, which exclude the deferred revenue purchase accounting adjustment and the recently divested businesses. All references to EBITDA are for adjusted EBITDA excluding divested operations with the adjustments as described in our earnings release and excluding the divested operations. All cash flow numbers, unless stated otherwise, are as reported with no adjustments related to the divested operations. All growth rates in Jean's comments are FX neutral unless stated otherwise. Reconciliations for all non-GAAP numbers we use are available in the investor relations section of the Gartner.com website. Finally, all contract values and associated growth rates we discuss are based on 2018 foreign exchange rates. In the earnings supplement, the abbreviation XDO indicates that the metric excludes divested operations. As set forth in more detail in today's earnings release, certain statements made on this column may constitute forward-looking statements. Forward-looking statements can vary materially from actual results and are subject to a number of risks and uncertainties, including those contained in the company's 2017 annual report on Form 10-K and quarterly reports on Form 10-Q, as well as in other filings with the SEC. I encourage all of you to review the risk factors listed in these documents. Now, I will turn the call over to Gartner's Chief Executive Officer, Gene Hall.

Good morning, and thanks for joining us. 2018 was a strong year. We continue to have world-class operational execution and innovation while making progress on our core strategy of establishing leading market positions in every role across the enterprise. We continue to invest in our business to drive sustained double-digit growth. Across the business, we grew our sales forces and reduced open sales positions to record lows. We made substantial investments in GBS products, service, and sales to accelerate future growth. We also made substantial investments in critical support functions, such as recruiting, to ensure that we have the talent to support sustained double-digit growth. We divested several non-core businesses to focus on our enormous market opportunity. We helped 15,600 enterprise clients in 100 countries around the world with their mission-critical priorities. We provided great jobs to 15,000 associates around the world and delivered market-beating returns for our shareholders. Few organizations had this level of global impact. In 2018, total revenues were up 12%, fueled by strong performances from our research, conferences, and consulting businesses. Research delivered another strong year of double-digit growth, up 12% over 2017. One factor fueling our growth is the consistent application of the Gartner formula. The Gartner formula for growth is our playbook for driving sustained double-digit growth. It consists of indispensable insights, exceptional talent, sales excellence, and enabling infrastructure. For all of these, we drive globally consistent execution of best practices and continuous improvement and innovation. We continue to apply the Gartner formula to both global technology sales, or GTS, and global business sales, or GBS. GTS serves leaders and their teams within IT, and represents 80% of our total contract value. In GGS, our performance continued to accelerate in 2018. Contract value growth increased to 14%, and sales productivity improved. We again delivered double-digit growth in every region, across every size company, and in virtually every industry. This acceleration was driven by three primary factors. Consistent application of the Gartner formula for growth, continued growth in our sales force, and a reduction in proportion of open territories. During 2018, we had the best level of execution yet of these programs. GBS serves leaders and their teams outside of IT. This includes supply chain and marketing, which we've addressed for several years, as well as other major enterprise roles, including HR, finance, legal, sales, and more. Each of these roles has the same need for our services as IT. For example, HR leaders recognize that future effectiveness depends on talent analytics. We help HR leaders build their talent analytics capability and use it to drive successful business decisions and outcomes. Talent analytics capabilities are dynamic and constantly changing, so HR leaders are continually having to adapt. This is an example of why our HR offering is as essential for HR leaders as our IT offering is for IT leaders. Over time, our HR business has the potential to have contract value of over a billion dollars. Finance, sales, marketing, and supply chain could be equally large. This gives GVS incredible growth potential. Our objective in 2018 was to build the initial foundation for sustained double-digit growth to realize this incredible opportunity. We're implementing the Gartner Formula for Growth across GVS. In 2018, we put special emphasis in three key areas, products, processes, and Salesforce growth. As David said, we refer to our products for business leaders as GXL. GXL products deliver sustained growth compared to legacy products. They provide greater value to clients because they're tailored to the client's individual needs. This, in turn, results in higher prices per user and stronger retention. Beyond better pricing retention, GXL products provide exponentially more growth opportunities because we can sell these high-value products throughout our clients' organizations. We've had GXL products in our supply chain business, and they've been very successful. We've also had GXL products in our marketing business, and they've been very successful. Beginning late in 2017 and continuing 2018, we added GXL products for the largest GBS roles, including HR, finance, sales, and legal. Over time, we'll add more GXL products for other roles. Another essential element for sustained growth is best practice training, tools, and processes. Over the past decade, we've developed sales training, tools, and processes for GTS that are among the best in the world. During 2018, we began equipping the GBS sales force with these best practices. The learning to use these best practices isn't easy. It's a significant change from the previous way of doing things. and can take talented, experienced salespeople years to become proficient. For example, in GTS, we hire talented, highly experienced salespeople. These new hires take three years to achieve full productivity. In their second year, they sell almost double that of their first year, and productivity continues to improve again in year three. One way to think about GBS is that virtually all the salespeople and their managers were in their first year with Gartner in 2018. Like experienced new hires, they need to learn the Gartner best practices. It'll take them some time to become fully proficient. Beyond products and the Gartner formula, we grew sales capacity 23% during 2018, which sets us up for long-term growth in 2019 and beyond. As a growth company, we were aggressive in building this foundation to provide long-term double-digit growth. We transitioned from legacy to higher-value GXL products as fast as practical. We piloted the new GXL products in late 2017. Then the products were rolled out and salespeople trained during the first half of 2018. Salespeople continued to sell the legacy products during the first half to close out their existing pipeline. Beginning at mid-year, salespeople began selling only GXL products. As a result, sales of legacy products were robust in the first half but stopped in the second half. As expected, the GBS sales force rapidly went up the learning curve, and sales of GXL products accelerated throughout 2018. Our sales force sold more than $100 million of GXL new business, almost triple the $37 million from 2017. And almost half of these sales were from products that weren't fully launched until mid-year. However, the transition from legacy to GXL had an impact on our 2018 contract value growth. GXL's accelerated, but not fast enough during 2018 to outpace the decline in legacy sales. As our sales force continues to gain experience selling GXL products in 2019, we expect to achieve double-digit contract value growth by the end of the year. As I noted earlier, we haven't yet introduced GXL products to replace all legacy products. So we have sales people who don't have GXL products to sell. These salespeople will continue selling legacy products until we introduce a GXL replacement. As a result, we'll still have some legacy product new business until that point. So in GBS, we enter 2019 with a 23% larger sales force. That sales force has more tenure and is further up learning and productivity curve. We have a higher mix of GXL products, which have greater retention. And we'll have a full year of our retention programs. This is our path to double-digit growth. Beyond research, our conference and consulting businesses performed very well in 2018. Gartner conferences delivered incredible insights to our attendees while building brand awareness and making a profit. The newly renamed conferences segment had its best year yet. Investments we made at the conference sales organizations and the event of business were critical in driving these strong results. Revenue was up more than 19% and surpassed $400 million because of the tremendous value our clients get from our conferences. Our advantage of business accelerated to more than 20% growth for the year, compared to no growth prior to the acquisition. The forward-looking metrics for our conferences segment remain strong going into 2019. Gartner Consulting extends the value of our research, providing in-depth expertise on longer-term engagements. Our consulting business grew 7% during 2018. Building off a strong base, our labor-based business and our contract optimization business both drove improvements over 2017. We ended the year with our backlog up 12% year-over-year, which sets us up for a great 2019. SG&A grew 16%. G&A grew 9%, slower than the overall business. This included investments in growing our recruiting capability to meet our long-term talent needs. As a growth company, we made significant investments in sales to drive future growth. We invested in three areas. First, our largest investment was in expanding the GTS sales force and reducing the number of open territories. This was a key contributor to GTS contract value growth and acceleration. We also invested in expanding the global conferences sales force and reducing the number of open territories. This was a major factor in conferences having a record-breaking year. And finally, we invested in expanding the GBS sales force, growing headcount about 23%. This provides a great foundation for future growth. In summary, 2018 was a strong year. We continue to have world-class operational execution innovation while making progress on our core strategy of establishing market-leading positions in every role across the enterprise. We made investments across the business to support sustained double-digit growth, and leading indicators are strong. We assist our clients around the world with their mission-critical priorities, provide a great job for our associates, and deliver another year of market-beating returns for our shareholders. And now here's Craig Safian, our CFO, to give an in-depth view of our financials. Craig?

Thank you, Gene, and good morning, everyone. 2018 was an exciting year for Gartner. It was the first full year of providing insight and advice to clients across all enterprise functions, giving us a much broader addressable market and the ability to provide even more value to our clients. On an FX-neutral basis, our year-over-year financial performance for 2018 included total contract value growth of 11%, total company revenue growth of 12%, adjusted EBITDA growth of 9%, polluted adjusted earnings per share of $3.63, and free cash flow of $468 million. Demand for our services remains robust around the world, and in the fourth quarter, we delivered excellent financial results across our three operating segments. As our 2019 outlook demonstrates, we expect to deliver double-digit, effect-neutral revenue and EBITDA growth with strong cash flow generation. Fourth quarter revenue was $1.1 billion, up 10% on a reported basis and 12% on an FX-neutral basis. We also delivered a contribution margin of 63% of about 24 basis points from the prior year, EBITDA of $211 million, up 6% year-over-year and 6% FX-neutral, and adjusted EPS was $1.20. Free cash flow in the quarter was $7 million, modestly ahead of expectations as some major CapEx projects slipped into 2019. Our research business had another excellent quarter. Research revenue grew 9% in the fourth quarter and 11% on an FX-neutral basis. Total contract value was $3.2 billion at December 31st, growth of 11.4% versus the prior year. We always report contract value growth in FX neutral terms. For the full year of 2018, research revenues increased by 13% on a reported basis and 12% on an FX neutral basis. The gross contribution margin for research was 69.1%, consistent with prior years. On page 9 of the earnings supplement, you will see details of GTS performance over time. In the fourth quarter, GTS contract value increased 14% versus the prior year, accelerating its growth rate both sequentially and year-over-year. GTS had contract value of $2.6 billion at year-end. Client retention for GTS remained strong at 83%. While retention for GTS was 105% for the quarter, up 70 basis points year-over-year and the highest we've reported for GTS. These retention rates reflect clients spending more with us each and every year. GTS new business grew 14% versus the fourth quarter of last year. We continue to see a mix of new business across new clients, sales of additional services, and upgrades to existing clients. We ended the fourth quarter with 12,998 GTS clients, up 6% compared to Q4 2017. The average contract value for Enterprise also continues to grow. It now stands at $197,000 for Enterprise and GTS, up 8%. This continued and consistent increase in average spend reflects our ability to drive CV growth both through new and existing enterprises. Average spend for Enterprise has increased consistently over the past several years, but our average enterprise still only has five to six seats. meaning we still have plenty of incremental penetration opportunities within our existing clients. The investments we have made over the past two years to improve Salesforce productivity continue to pay off with an increase again this quarter. For GTS, the year-over-year net contract value increase, or NCVI, divided by the beginning period quota-bearing headcount was $118,000 per salesperson, up 7% versus the fourth quarter of last year. This is the fifth consecutive quarter of year-over-year productivity improvement. The combination of headcount growth and productivity improvements led to GTS accelerating its growth rate over the course of 2018. Turning to GBS. As you heard from Gene, our focus in 2018 was on building the foundation for future sustained double-digit growth in GBS-CV. All of our GBS metrics reflect the discontinuation of sales of the largest legacy products. As Gene described, the discontinuations have been based on a purposeful strategy that allows our sales teams to focus on GXL products going forward. GBS contract value finished the year at $607 million, up 1% versus 2017. As Gene also discussed, the future of GBS is our GXL products. Looking at total contract value from the GXL products, we drove an increase of 79% year-over-year from $109 million to $195 million from 2017 to 2018. Just in the fourth quarter, in HR and finance together, we generated $30 million of new CV. On page 10 of our earnings supplement, you will see the usual summary of GBS metrics. GBS client retention was 82% for the quarter. GBS wallet retention was 95%, down from 100% last year. New business declined by 11% in the quarter versus the prior year. We ended the fourth quarter with 5,451 GBS clients, down about 4% versus the prior year period. For GBS, productivity declined significantly. The year-over-year net contract value increase, or NTVI, divided by the beginning period quota-bearing headcount, was $10,000. The average contract value per enterprise at GBS increased about 5% to $111,000. Those are the headline results. However, they obscure what is really happening as we make the transition to GXL products. To drill down, we've provided some more details than usual this quarter, and you'll find the data I will reference included in the earnings supplements. On page 11, you will see the bridge from 2016 GBS-CV to 2018 GBS-CV. Shown in gray and on the bottom left of the page, you will see that the new business for the legacy products declined by $81 million in 2018 as we made the strategic decision to discontinue new sales of those products in favor of the new GXL products. The chart on the top left depicts the most important development, growth of new business in the new GXL products. We sold over $100 million worth of GXL new business over the course of 2018, an increase of 176%. And that number obviously ramped over the course of the year as our frontline sellers started making the transition to selling GXL products. The drivers of future GDS growth are the same as they are for GTS, headcount and sales productivity. Improvements and increases in both lead to revenue, profits, and cash flow. In 2018, we grew our sales force 23%, which is in addition to growing 16% during 2017. As this larger sales force continues gaining experience, they will drive accelerated growth. Productivity, in turn, increases when new business improves, retention improves, or both. While we typically combine new business and attrition in our reporting, we're breaking them out this quarter to help you see what's going on below the headline numbers. New business productivity for GBS overall, a complete measure of how much the GBS sales team is selling, is calculated as trailing 12-month new business divided by opening period headcounts. This is comparable to the methodology we use for our longstanding productivity measure. On this measure, we ended 2018 at more than $260,000 of new business for salesperson. New business productivity for GXL continues to ramp, as the team has had more time with the newest products since we started introducing them late in 2017. In 2018, which was only a partial year for most of the practice areas, the team sold more than $100 million of GXL new business. That compares to $37 million last year. Almost half of 2018's new sales are from products that didn't pilot or fully launch until late in 2017. The one other thing to note is that legacy new business will not be going to zero. While we have launched GXL products in all of the primary functional areas, there are still leadership councils that will continue to have new business until we've launched a replacement GXL product. As we shift more of the CV to the GXL products, we expect higher retention rates. While legacy GBS CV attrition is close to 30%, GXL attrition is around 20%, almost at GTS levels. Exiting 2018 on a blended basis, that's about 27% attrition. there is still opportunity to reduce attrition, and we've expanded our service teams because we know great engagement leads to better retention. The underlying drivers of engagement are the individualized content and service that an enterprise license does not facilitate as naturally. As the attrition rate moves from just under 30% towards the GXL rate or even lower, we will see growth accelerate. With the success that the GBS team is having with the new GXL products, their high retention levels, programs we have in place to drive incremental improvements and retention, and stability in the organization and strategy as we enter 2019, we continue to manage towards double-digit CV growth by the end of this year. On page 12 of the supplement, we outline a high-level model to help you think about the path to double-digit CV growth the way we do. You can see the sensitivities to improvements in new business productivity and retention. We get to double-digit growth through a combination of more salespeople already on board and with more tenure, a better product mix for retention, broader retention programs in place, and a compelling set of new products. If we don't make any improvements in new business productivity or attrition, GBSCV will grow about 8% in 2019. Of course, we are focused on continuous improvement and innovation. For every 100 basis points improvement in attrition, we will see 100 basis points improvement in growth. For every $7,500 improvement in new business productivity, we will see a 100 basis point improvement in growth. That's only a 3% improvement. Looking back at the research business in 2018, GTS had an outstanding year with increases in wallet retention, sales productivity, and accelerating contract value. We are seeing returns on the increased spending we did in 2017 and 2018. For GVS, while CV decelerated in the quarter, we have built the foundations for the future. The market validated the product's value propositions, and the sales teams have made tremendous progress adapting to the new products and our go-to-market approach. In conferences, revenues increased by 16% year-on-year in Q4 to $196 million. FX Neutral growth was 18%. We had 15 destination conferences in the fourth quarter, consistent with last year. On a same-conference FX Neutral basis, revenues were up 18%, with an 11% increase in same-conference attendees. For the full year of 2018, revenue increased by 19% on both a reported and FX Neutral basis. Gross contribution margin for the year was 50%, an increase of about 190 basis points from 2017. As you know, we made a number of investments in support of our conference business in 2017. Those investments paid off as conferences had its best year ever. Fourth quarter consulting revenues increased by 12% to $96 million. FX neutral growth was about 14%. Labor-based revenues were $74 million. In the labor-based business, revenues increased 3% versus Q4 of last year, or 4% on an FX-neutral basis. On the labor-based side, billable headcount of 738 was up 8%, and we had 141 managing partners at the end of Q4, up about 3% versus the prior year. Utilization of 61% was affected by Europe, where we had lower levels of backlog. The backlog position in Europe improved as we exited 2018. Overall, backlog ended the quarter at $111 million, up 12% year-over-year on an ethics-neutral basis. Our bookings performance remains strong, and our 2019 pipeline is encouraging. The contract optimization business was up over 60% versus the prior year quarter. For the full year, consulting revenue increased by 8%, or 7% FX neutral, and its gross contribution of 29% was up 40 basis points compared to 2017. As I mentioned earlier, the overall gross margins for the whole business improved by approximately 24 basis points in Q4 and over 60 basis points for the full year of 2018. SG&A increased 12% year-over-year in the fourth quarter, or 14% on an FX neutral basis. We continue to grow sales capacity and the enabling infrastructure to support our strategy of delivering sustained double-digit growth over the long term. The enabling infrastructure includes investments in human resources functions, like recruiting, and real estate to support the increased number of associates around the world. Our sales force continues to be our largest investment, and at the end of the fourth quarter, we had 3,894 quota-bearing associates in research. This includes 3,104 in GTS and 790 in GBS, or growth of 15% and 23%, respectively. For the full year, SG&A grew 16% on a reported basis and 15% FX neutral. G&A, which represents about one-third of the SG&A, grew about 9% as we continue to see modest operating leverage in G&A, leverage that we can reinvest in other areas to support and drive growth. We've made a number of investments across our selling teams over the course of 2017 and 2018. And our results in 2018 show some of the returns we've been getting for those investments. In GTS, we've made investments to increase territories, reduce open roles, and to drive improvements to sales productivity. In 2018, we saw improvements to productivity and the growth rate of CV accelerated. And the incremental CV we gained from these investments has value beyond just one year. Similarly, in our conferences business, we invested in increasing territories, reducing open territories, and management and selling infrastructure for the Avantha business. These investments supported almost a doubling of our growth rate in 2018. And we are expecting the same sorts of returns from our investments in GBS. We are investing in growing the sales force, improving service, and launching new products, which we believe will translate the double-digit contract value growth in 2019 into and even faster than that in the future. Adjusted EBITDA for the fourth quarter was $211 million, up 6% on both a reported and FX-neutral basis. Depreciation was about flat with last year, and amortization took an expected step down from $53 million to $34 million as some of the acquisition intangibles reached their 18-month life. Integration expenses were down year over year as we have moved past the biggest part of the integration work. Interest expense in the quarter was $25 million, down from $36 million in the fourth quarter of 2017. The lower interest expense resulted from paying down debt over the past year. The Q4 adjusted tax rate, which we used for the calculation of adjusted net income, was 30.6% for the quarter. This was higher than expected, largely due to audit settlements and increased non-deductible expenses. Tax rate for the items used to adjust net income was 45.3% recorded. Adjusted EPS in Q4 was $1.20. For the full year, adjusted EPS was $3.63, excluding divested operations. In Q4, operating cash flow was $45 million, compared to $22 million last year. The increase in operating cash flow was driven by solid operating results, lower interest expense, and improvements in working capital. Q4 2018 CapEx was $62 million, and Q4 cash acquisition and integration payments and other non-recurring items were approximately $24 million. About $18 million of CapEx we had planned for the fourth quarter slipped into 2019. Free cash flow for the full year was $468 million, which is up more than 36% versus the prior year on a combined basis. 2018 was a very strong free cash flow year for us. but there are a few items, all of which we've discussed in the past, that you should be aware of. First, the 2018 results include a roughly $40 million catch-up on collections that should have occurred during 2017. The reported figure also includes the free cash flows of a number of divested operations related to the periods prior to closing. We estimate a roughly $19 million impact there. Taking those two adjustments into account, our ongoing 2018 free cash flow would have been $409 million. 2018 was a strong free cash flow year. Our December 31st debt balance was about $2.3 billion. Our debt is now 95% fixed rate. Our gross leverage on a reported basis is about 3.2 times. Adjusting EBITDA for the divestitures, our gross leverage ratio is now about 3.4 times EBITDA. We use some of our capacity to take advantage of the decline in the stock price in the fourth quarter, repurchasing $156 million of our stock. Our capital allocation strategy remains the same. We deploy our free cash flow and balance sheet flexibility on strategic value-enhancing M&A and returning capital to our shareholders through our buyback programs. We have over $850 million remaining on our share repurchase authorizations. turning to the outlook for 2019. Having completed the divestitures in the fourth quarter, we again provided you with a set of non-GAAP financials we used to evaluate the business. We expect to share this incremental information on an ongoing basis. Before jumping into the details, I wanted to give you the context of how we approached our 2019 guidance and how we are operationalizing what Gene and I have discussed this morning. First, our 2018 ending contract value and corresponding growth rate drives the bulk of our 2019 research revenues. As CV grows over the course of the year, it does positively impact revenue, but growth in Q3 and Q4 has a more muted impact on the current year revenue line. I'd also note that there is a slight headwind to our research and total revenue growth rates caused by product retirements. Second, advanced bookings and consulting backlog are the metrics that drive our conference and consulting revenue guidance. As mentioned earlier, we had very strong advanced bookings in our conference business, and our consulting backlog is up 12% year over year entering 2019. Third, we continue to invest to support and drive the future growth of our business. After a surge of investing, 2019 will be closer to our typical run rate. Our 2019 plan calls for 11% territory growth in GTS, while maintaining our record low level of open territories, and roughly 14% to 16% territory growth for GVS. We have decided to moderate the growth in GVS so that we can focus on getting all of our sales teams further up the learning curve with fewer distractions. The territory growth in GVS is predominantly in areas where we have already achieved strong productivity. We continue to invest in our enabling infrastructure functions, but we again plan to grow them at a slower rate than revenue in 2019. And lastly, our guidance reflects recent FX rates. The dollar strengthened over the course of 2018, and FX is causing a roughly two-point negative impact to our projected 2019 growth rates across revenues, adjusted EBITDA, adjusted EPS, and free cash flows. The highlights of our full year 2019 guidance are as follows. We expect adjusted revenues of approximately $4.2 to $4.3 billion. That is FX neutral growth of 10% to 13%. In addition to the non-core businesses that we divested over the course of 2018, there were some additional products from the CEB acquisition that we viewed as non-core. We have retired these, which is impacting our 2019 total revenue growth by about 75 basis points. We expect adjusted EBITDA of $720 to $765 million, FX neutral growth of 7% to 13%. We expect an adjusted tax rate of around 25.5% for 2019. Please note that if you are adding back from GAAP net income, the rate for the tax effect on the add-backs is about 23.5%. We expect 2019 adjusted EPS of between $3.82 and $4.19 per share, FX neutral growth of approximately 7% to 15%. For 2019, we expect free cash flow of $455 to $485 million. That is projected FX neutral growth of 11% to 19% off of our normalized 2018 free cash flow. All the details of our guidance are included on our investor relations site. It is also important to note that we have revalued our contract value at current year FX rates. Our 2018 ending contract value at 2019 FX rates is $2.5 billion for GTS and $594 million for GBS. Details are included in the appendix of the earnings supplement. Lastly on guidance, I'd like to provide some additional information to allow for an understanding of the seasonality and other factors that will impact our revenue and earnings on a quarterly basis. For 2019, we expect our quarterly revenue phasing to be roughly consistent with adjusted revenue phasing from 2018. Q1 will be a little lighter than 2018 as a percent of the full year, impacted by a stronger-than-normal Q1 2018. This is also the quarter with the most pronounced impact of product retirements. For the first quarter of 2019, we expect adjusted EPS of between 50 and 54 cents. Q1 EPS is impacted by a slightly lower proportion of revenues, higher depreciation, and foreign exchange. Our strong 2018 financial and operating performance across all of our operating segments continued in the fourth quarter. Notably, our strong GTS contract value growth of 14% accelerated over the course of the year, and sales of our new GXL products and GBS continue to scale. Our conferences and consulting businesses both had strong years. Free cash flow improved significantly in the year. We have divested all the identified non-core assets and used those proceeds to rapidly de-lever, reducing our debt balance by $1 billion in 2018. And we resumed our share purchase programs. buying over $260 million of our stock in 2018. The trends going into 2019 are strong, and our teams are executing the plan. We are applying the Gartner growth formula across the combined business to drive sustained long-term double-digit growth to revenues, EBITDA, and free cash flow. With that, I'll turn the call back over to the operator, and we'll be happy to take your questions. Operator?

Thank you. Ladies and gentlemen, if you would like to ask a question at this time, please press the star and the number one key on your touchtone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. And as a reminder, we ask that you limit yourself to one question and one follow-up. Your first question comes from Tim McHugh with William Blair. Your line is open.

Thank you. Just I guess on GPS. I understand the comments you made, I guess, broadly why there's a lot of changes happening in terms of the product set and new salespeople. And so it's going to take time. But I think certainly relative to my expectations and investors' expectations, it seems like it's harder or taking longer, or at least the performance in the fourth quarter probably was a little weaker than we would have thought. So how do you compare to your expectations and what if it is – taking longer or is harder? What's different than you would have said before?

Hey, Tim, it's Gene. I wouldn't characterize it that way. Basically, we, as I mentioned in my remarks, our focus has been how do we get to sustain double-digit growth as quickly as possible? And to do that, we needed to introduce new products. We needed to train Salesforce on those products. They need to come up with their learning curve. As we've talked about in the past, we allowed them to keep selling legacy products they had in their pipeline until mid-year of 2018. We trained them in the first half of 2018, the new products. And so if you look at the learning curve, they didn't really get a chance to start the learning curve very well until the second half of 2018. And as Craig and I both mentioned, what happened basically at the end of the year is they couldn't sell the legacy products, so that fell off naturally. And their acceleration on the new products wasn't fast enough during 2018. It will be in 2019. It wasn't fast enough during 2018 to make up for that fall off. We did that purposefully. It wasn't something that we didn't know was going to happen. We knew we purposefully, in fact, we talked about it the last couple of quarters, of that exact strategy of letting them finish out the pipeline and then training people in the first half on the new products and selling those exclusively for the people that had them beginning in the second half of last year.

Okay, I guess maybe following up on that, the change, I guess, in terms of the pace of growth you're growing the sales force at, that's different than you would have said three to six months ago, I guess. So what are you seeing that says, I guess, makes you decide to stop growing GBS at the same rate?

So the... We grew GBS very quickly during 2018 to set us up for great 2019. We're still trying to grow at pretty good double-digit rates during 2019. As we always do, as we've always done with GTS, as we see productivity going up during 2019 or not meeting our expectations, we'll flex that up or down 2019. But I think we look at it as we're going into 2019 with a much stronger sales force, And we want to see a return on that investment. And when we start to see full return on that investment, I can see us ramping up back in the 20% range of Salesforce growth as well.

And Tim, it's Craig. Good morning. The one thing I'd add is, as I mentioned, we've moderated the growth rate. We're still projecting 14% to 16% GBS territory growth for 2019, which by many measures is still pretty rapid growth. But moderating it It just allows us to have one less management challenge, if you will, as we roll into 2019. And so, as Gene and I both mentioned, as we think about 2019, you know, we've got 23% more salespeople. They all have more tenure or will have more tenure in 2019 than they had in 2018. We've got great progress on the GXL new business sales. and a number of other things working in our favor as well. And so again, as we moderated the growth, we had all that in mind as we pivoted to 2019. Okay, thank you.

Thank you. Your next question comes from Manav Pitnaik with Barclays. Your line is open.

Thank you. Good morning, gentlemen. So maybe just on GBS again, losing clients in that business, I mean, I guess I saw it you guys are still going to sell the legacy business for those who wanted it and so on and so forth. Can you just help me bridge why you're losing clients and just a little bit more color on why legacy is getting hit so quickly that fast?

So just to be clear on our strategy there, for clients that already have a legacy product, we will allow them to renew as long as they want to renew. And our renewal rates among legacy products are slightly higher than they were when they were CP products. And so actually, the renewals have gone up since they've become a part of GPS. And so we're going to let clients who like that product and want to keep renewing, they can keep renewing it. For new clients, we're focusing on selling just where we have the GXL products, only selling GXL products, because they provide more value to the clients and higher retention. And so they're better value for the clients. They want the clients to have that value. And again, it benefits the economics of the business over the long term.

Okay. And I suppose, you know, just, you know, in terms of visibility, I mean, I guess one of the things that everyone's liked about Gartner is, you know, giving you a subscription model and so forth. You have the visibility, but at least it sounds like over the last few quarters, things haven't played out on the GBS side as we would have expected. So I guess what I'm Trying to ask is, you know, if I heard you correctly, I think you guys said you'd get to 8% with no further improvements this year. And I was just wondering how confident are you even in that 8% really?

So, you know, I guess what I'd say is that's purely the math of it, meaning that, you know, if our productivity does not improve and, you know, our retention does not improve, and by the way, we are certainly aiming to improve both productivity and retention. But if they did not, if you just take the pure math of it, that gets you about 8% growth. And that's why we're pretty – you know, I've said for quite some time, we're driving to get to double-digit growth by the end of 2019. That table just shows the kind of pure math from where we are in terms of getting there.

Thank you. Your next question comes from Jerry Bisbee with Bank of America. Your line is open.

Hey, guys, good morning. You know, I guess following on this line of questioning from others, you know, do you think you've pushed change too fast at CEB given, you know, the state the business was in when you've acquired it? And maybe specifically as it relates to the move to the seat-based or the newer products, you know, can you compare just how that transition went? Gene, when you did that after joining CEB, Gartner a number of years ago and how that's looking now. When we look back at the numbers from then, it doesn't appear, you know, but hard to tell that there was this much, you know, sort of impact to the numbers as you push that change through. And so just help us understand, you know, how that happened in the past and the confidence that provides or how that frames what you're seeing today. Thank you.

So, Gary, that's going back a long time. So I'll just say very briefly that when we first started and we accelerated back then, we didn't have the Gardner formula. We didn't have all the capabilities in terms of recruiting, training, tools, process that we have today. And so that acceleration took place over a much longer time period. You know, as we have – you know, our plan really hasn't changed, and we're proceeding according to the plan for the CEV acquisition, which is – We acquired the company. We developed new products. We talked all year last year about how in the first half we're going to let them sell the legacy products. As we train them on the new products, we have to stop them, then they'll ramp up. That's all going according to what we would have expected. And so we purposely decided to go faster because we have better recruiting training tools and processes than we had 15 years ago.

Okay. And then just the follow-up maybe for Craig. So When I look at the free cash flow guidance for the year, it's not clear to me that there's the working capital benefit in the back half of the year that the acceleration of CV at GBS would normally imply. Can you help us understand, as you think about the free cash flow profile of the business, do we still think that if you are successful in accelerating CV at that segment, we should see the cash conversion increase? improved meaningfully over, you know, at least as an exit rate as we exit this year and into next year, or is there anything different today? Thank you.

No, good morning, Gary. You know, I think the way to think about the free cash flow, you know, I think 2018 was a very strong free cash flow year for us, as illustrated by the metrics, and we made really good progress over the course of the year. First, catching up on some of the challenges that we exited 2017 with, and then just having a very strong collection year. And what fueled the bulk of the great free cash flow year in 2018 was the accelerated growth and the accelerating growth rate of our GTS business, which, again, represents a little more than 80% of that total CV base. As we pivot into 2019, we still expect very strong conversion and working capital benefit. from that great growth rate that we're getting from GTS. I think your hypothesis is correct in that as we accelerate the growth of the GBS business, we get to take more advantage of the working capital benefits that are just structurally inherent to a subscription business where we are billing all up front and then delivering and recognizing the revenue over the balance of the contract. So As we get towards that double-digit growth rate by the end of 2019, that's what we're targeting, we should see the working capital benefit improve, and the conversion metrics will look better as a virtue of that as well.

Thank you. Your next question comes from Tony Kaplan with Morgan Stanley. Your line is open.

Thanks. Good morning. Good morning. Did the macro environment this quarter play any part of our role in sort of the GBS slowdown? Were customers, you know, maybe more reluctant to add to their subscriptions just given some of the volatility and perhaps caution? Thanks.

Yeah, so the answer is no. If you look at our business – Q4 was very strong. If you look at GTS, we had great growth there. If you look at conferences, we had great growth there. If you look at the backlog and consulting, which is primarily our bookings, it was up 12%, which is very strong for us. And so the whole story with GBS is actually pretty simple, which is the ramp in the GSL products, it wasn't yet to the point where it made up for the decline in the legacy products. That will turn around in 2019. And that's what was going on in GBS.

Great. And then your guidance for 2019 at the midpoint implies a little over 30 basis points of adjusted EBITDA margin contraction. I guess as the sales people in GBS ramp up, you know, that makes sense that this could be more of an investment year and you're not quite at productivity. peak productivity levels, how should we think about it afterwards? Like, I know historically you've said you wanted to keep margins pretty constant. At some point, could we actually see margins start to expand once, you know, the GPS salespeople are at sort of a higher productivity level? Thank you.

Good morning, Tony. So, you know, the way we're thinking about managing business is very consistent with how we've managed it in the past. We're obviously focused on accelerating the top-line growth rates in doing so because research has such great structural gross margins. we do typically get some gross margin leverage flowing through. As I talked about in my prepared remarks, we had gross margin leverage both in the fourth quarter and on a full year basis. In 2018, we'll continue to manage our G&A to grow at a slightly lower rate than revenue growth. And so there's operating leverage there as well. And we'll continue to invest in sales. And I think in 2018 and 2019, We have invested across the board. I mentioned investments in GTS. I mentioned investments in our conference sales. And I talked about the kind of returns that we're getting in 2018 and beyond or expect to get beyond from those prior investments. With GBS, we are investing. You know, we invested in 2017, in 2018. We're continuing that investment in 2019 with the goal of getting the double-digit CV growth by the end of 2019. and then that accelerating from there. And so double digit is not the end game for us. It's just a stopping point on our way to even faster growth. As that happens, there is some leverage that we will get on that GBS selling line. But again, the way that we think about managing business going forward is a little bit of gross margin leverage, a little bit of G&A leverage, and we'll continue to make sure that we're investing appropriately in sales to fuel sustained double-digit growth rates at the top line.

Thank you. Your next question comes from George Tong with Goldman Sachs. Your line is open.

Hi, thanks. Good morning. Given your progress with your GXL initiative and phase-out of legacy products for GBS, can you discuss how you expect GBS contract value growth to evolve over the next several quarters? Specifically, should we expect a relatively steady ramp towards your targets, or do you see factors that could cause lumpiness and growth over the course of the year?

George, good morning. It's Craig. The way to think about it is a little bit related to the timing of the phase-out of the legacy product new business sales. And so, as Gene discussed, we still had legacy new business sales happening full-on in Q1 slowly starting to diminish a little bit in Q2, and then where there was the relevant GXL product phasing out in Q3 and Q4. And the GXL new business sales continue to ramp. And so the way we kind of think about it is we really start to see the benefits of the GXL ramp in Q3 and Q4. We're not providing specific guidance around the CD growth on a quarterly basis. We're playing the long game here. We continue to play the long game on that one. But the way to think about it really is just related to the timing of the phase out from 2018.

Got it. That's helpful. And switching gears to the GTS business, can you discuss how spending intentions are changing among your existing clients there and how you expect changes in overall IT spending to potentially alter IT research budgets?

Yeah, so as you know, we're a global company. We're in 100 countries around the world, and things vary dramatically depending on which country you're in. And even within the countries, specific industries or specific companies can be either doing well or in distress. And so, you know, I guess that's sort of at a total macro level. Globally, you know, I don't see any giant change like a steep slowdown or anything like that. If you look at individual markets or individual industries or individual companies, You see puts and takes, but sort of at a global macro, we don't see a big change there in terms of, you know, what we're seeing.

Thank you. Your next question comes from Bill Warmington with Wells Fargo. Your line is open.

Good morning, everyone. So another question on the GBS contract value growth. I was just hoping you could help me bridge the – the 1.1% CV growth in the fourth quarter to the 8% no improvement productivity, no attrition improvement in the upper left quadrant on the chart on page 12.

Good morning, Bill. It's Craig. Yeah, happy to do that. So just so we're 100% clear, when we look on page 12 – the new business productivity is an expression of new business dollars per salesperson. So it's not the overall dollar amount of new business. It's the new business we expect per salesperson. And, again, using the same methodology we use for productivity, we base it on the beginning of period headcount. And so as we talked about during my prepared remarks, The new business productivity we achieved in 2018 per salesperson was a little more than $260,000 per individual. We entered 2019 with 23% more people on Gen 1 2019 compared to Gen 1 2018. If you extrapolate the number of people times the new business per person that gets you a gross new business number. And if you then apply the attrition, and again, we talked about having roughly, based on the weighted average of our GXL and non-GXL products, having attrition of around 27, CV attrition of around 27%. If that is flat, we lose 27% of our roughly 600 million base, You then apply that new business number, and that gives you the calculated NCVI. The NCVI in the numerator, the beginning CV balance in the denominator, that gets us to the 8%.

Okay. My follow-up question, I wanted to ask about your thoughts on the continuing pace of hiring at GBS. And what kind of assumptions are built into the 2019 guidance for that in terms of gross ads and turnover assumptions at the headcount level?

Bill, the way we're thinking about GBS is we grew the sales force net 16% in 2017, 23% in 2018. We're targeting 14% to 16%. headcount growth in 2019. Our turnover assumptions, and we actually just went through a pretty detailed review of this, GBS turnover and GTS turnover are about the same. We're expecting that to continue into 2019. And again, we're expecting net growth of 14% to 16%. I would say that we are overweighting the growth in areas that already have strong productivity. And, again, as Gene mentioned, that's the way we typically manage it in our GTS business as well. And so we didn't set out with, hey, we need to grow X percent. We actually analyzed the business at a detailed level, figured out where we could easily and productively and profitably absorb the headcount growth, and we went and built the growth plan that way. So that's the way we're thinking about GBS growth. headcount growth in 2019.

Thank you. Your next question comes from Jeff Spielberg with BMO Capital Markets. Your line is open.

Thank you so much. Just to follow up on that question, if I do the math correctly and I look at your net Salesforce growth, it looks like you added about 550 people net in 2018. You're targeting about 460 or so for 2019. That's 1,000 people over a two-year period. Are you having difficulty finding people? Are you having to pay these entry salespeople more just to attract them?

So the short answer is no, we aren't having to pay them more than kind of the normal wage inflation in each market. Basically, Gartner is a very attractive place to work. And so when our recruiters go out, we have a great brand, and they're working with a great brand. And on top of it, we have a really, really strong recruiting team. So between the combination of our great brands and our great recruiting team, we've actually, you know, in fact, to succeed our expectations, as I mentioned last year, we have fewer open territories than we had originally thought because recruiting has been so strong because of this whole brand of recruiting capabilities.

The other thing, just to reinforce Jeff there, is, you know, when we're recruiting and those gross numbers you're talking about from a hiring perspective, you were talking specifically GBS, But we're recruiting, you know, around the world. We're recruiting experienced salespeople. We're recruiting people right out of university, et cetera. So it's a very diverse recruiting pool that we're going after. It's not like we're reliant on any one city, geography, country-wise. And so that minimizes the risk as well. And, again, I double reinforce the comment Gene made about the attractiveness of the Gartner program. brand as an employer, particularly for salespeople, and the strength of a recruiting organization.

Okay, great. And my follow-up question, I wanted to focus on the GXL product. You mentioned when comparing to the legacy product that retention is higher for your GXL products. Can you talk about, is there any difference in pricing or margins between those two product lines?

So, you know, the way we've thought about the GXL pricing, we're very big fans of simplicity and consistency. And so the GXL products are priced very consistently to their sister products on the GTS side. And those products are set up to deliver very good, consistent gross margins for us. We price the value when we price to make sure that we're getting – appropriate gross margins. Yeah, I think the real beauty of GXL, when we think about it from a growth opportunity perspective, number one is it's just a better constructed product. It serves the needs of the individual directly, but it also allows us to further penetrate organizations once we get in there. And so what you've seen us do on the GTS side, we've actually done it on the supply chain and marketing side as well, is we'll get in with, you know, one to three seats in an organization, and then over time we will grow that footprint with our product portfolio. And GXL allows us to do that in those enterprises, whereas the legacy leadership councils did not.

Thank you. Your next question comes from Peter Appert with Piper Jaffray. Your line is open.

Hi, good morning. So, Craig, just following up on the margin issue, to the extent you've got slower sales force growth in 19, you're anticipating better contract value performance. It seems like there's a bit of a disconnect in terms of an expectation of lower margins. So what am I missing here?

Good morning, Peter. You know, the – Obviously all of the CV growth we deliver over the course of 2019, the corresponding revenue lags. And so as we build the CV and NCVI over the course of 2019, the bulk of that revenue upside flows into 2020. And so there's one thing we're sure of, which is we're going to pay the salespeople. And that expense is us as long as they're on board or is with us as long as they're on board. And that's what's dragging down the margin. So if you think about it, we're still – we're growing GBS 14% to 16% coming off of a year where we grew the sales force 23%. We're only going to build to double-digit CV growth by the end of 2019. That will convert into corresponding double-digit revenue growth, but not until 2020 – which will meet the margin impact. So it's really an investment in 2019 with the payback in 2020 and beyond.

Got it. Okay. And then just as the follow-up, and I guess this is sort of expanding on what Tony had asked earlier, would your expectation, Craig, then be going forward that we should think about margins in the context of the base rate we're going to see in 2019 as sort of the steady state level going forward? Sure.

It's a good question, Peter, and we're not providing a margin outlook or margin guidance beyond 2019 at this point. We'll definitely talk about it in upcoming investor interactions like our Investor Day. But as Tony articulated in her question, and as I think we attempted to articulate in our response, as we improve the growth rate of GBS, all other things equal, that will help margins. But, again, as we think about the future, the way we're managing our business is accelerate the top line, a little bit of gross margin leverage, a little bit of G&A leverage, and, again, we're going to continue to invest in sales so that we can sustain these strong double-digit growth rates into the future.

Thank you. Your next question comes from Hamza Mazari with Macquarie. Your line is open.

Hi, this is Mario Cordolacci filling in for Hamza. I just wanted to see if you can give us a sense of how you expect organic growth to perform in a slowdown, given that TEB is now in the portfolio and in GBS, or maybe even asked a different way is just, I guess, do you view that business as being more discretionary than the GTS segment?

So we don't view that business as being more discretionary than the GTS segment. Basically, our products are very affordable, and they provide very high value. And we have, at any given point in time, and this is true whether it's in IT or it's HR or finance, we have clients that their companies are doing really well, and their company is doing very poorly. And we do well in both environments, because when people are doing well, we help them with growth-oriented issues, When people are doing poorly, we help them with cost control-arranged issues. And so, you know, we can do well in both environments. We've shown them with GTS. We're running the same exact plays in GTS.

Gotcha. Okay. And I know there were already questions about productivity metrics, but I wanted to see if you can give us a sense of those metrics from a regional perspective. And I know you guys are growing or there's territory growth, I think, 11% in GTS, 20% in GBS. I just wanted to see if there's any variations from region to region. And also, what's your timeframe for GBS's sales productivity to get closer to the GTS?

Good morning. It's Craig. I'll take the second question first. So as we think about the corresponding productivity measures, obviously in GTS we've been focused on improving the GTS performance sales productivity, and we've been consistently doing that, but by no means are we done there. We're focused on continuing to drive improvements to overall sales productivity. If you extrapolate the 2019 view that we talked about and that path to double digit and back into what does that mean from a productivity perspective, roughly speaking, I think on average, the productivity would be around $75,000 of NCVI per account executive, and the team here is checking the map just to make sure I'm right, to get close to double-digit growth. And again, there will still be a pretty sizable gap then between that 75 or close to 80K and the 118K of productivity that we're delivering on the GTS side. We're going to be focused on continuing to improve the GBS productivity over time, and we're going to remain focused on improving the GTS productivity over time. Over the long term, there's no reason why they can't be around the same levels. And obviously, if we're doing that and improving both GTS and GBS, our overall contract value growth will continue to accelerate. In terms of the regional differences, I think We manage a pretty diverse sales force that calls on the largest companies in the world down to, you know, relatively small enterprises that have around $100 million in revenue or in that neighborhood. And the people that we're recruiting to sell to those different types of organizations obviously have very different backgrounds. So some of them, as I mentioned, are right out of university. Some of them come to us with 5 to 15 years of experience. You know, for the largest companies, they might have 20-plus years of industry experience. And so the differentiation is probably more important and pronounced there than it is regionally. And we've got sort of that structure set up around the world. Again, making sure that we're maximizing the opportunity for the type of account that we're calling on. We do look at productivity regionally. We do look at it by tenure. We do look at it by type of channel or type of company that we're selling to. We look at it as compared to cost. We look at all sorts of productivity metrics. The key for us is regardless of what level we're looking at, are we driving improvements to those productivity measures consistently over time?

Thank you. Your next question comes from Joseph Farisi with Cantor Fitzgerald. Your line is open.

Hi. So I was wondering, how exactly are the GXL products different than CEB? I know you talked about, you know, the pricing model around them, but the products themselves. And do customers have to cancel legacy CEB in order to get on GXL?

Hey, it's Gene. So the GXL products, have substantially more content in them than the legacy products did. They have more content in the specific function, like HR, and on top of it, we've taken whatever technology content is relevant and put that in the products as well. So the first thing is there's a lot more content in a GSL product than in the legacy products. The second piece is that the actual what's included in terms of things like events and things like that you can go to, analyst inquiries and stuff, also is a higher value package than what you get. So it's basically a combination of the content itself is better. There's a lot more content. And secondly, the other things that are part of the product are also a lot higher. And that's why you see the retention rates being a lot higher with the GXL products.

Okay. And then I guess my second question, why hold to the double-digit growth? I think that was given kind of a closure of the acquisition, but a lot has changed since then, right? You pulled forward investments, you ramped the sales force, you divested things, and now it sounds like you're going after the products. I'm just curious. I understand the mastery. pushes you kind of in that direction. But with all the changes post-closure, you know, why hold to that target? Why not just lower the target and give yourself more of an opportunity to outperform it?

So we've been focused on the operational changes to take advantage of this enormous market opportunity we have in GBS. And so we started from the how do we actually get, like, for example, the transition from the lower-value legacy products to the very high-value GXL products. And because they're high value, we wanted to get there as quickly as we could. We've introduced them now for all the major roles, you know, marketing, supply chain, HR, finance, legal, sales. And we'll introduce others going forward. And so the double-digit is more of an outcome as opposed to a specific objective. And so we sort of said, based on what we know about how people are going to ramp up in the fall of legacy products, the strategy we've taken, this is kind of the outcome we expect as opposed to the other way around. And by the way, As Craig said, and as we both said several times, getting to, you know, our aspirations are higher than just struggling to cross the finish line to double digit. We want to be well at the double digit range, not just, you know, 10.0%.

Thank you. And this concludes our question and answer session. I'd like to turn the call back over to Mr. Gene Hall for closing remarks.

So in summary, 2018 was a strong year. We continued to have world-class operational execution innovation while making progress on our core strategy of establishing leading market positions in every role across the enterprise. We made investments across the business to support sustained double-digit growth and leading indicators are strong. For GPS, we entered 2019 with a 23% larger sales force. We're more experienced in further learning productivity curve. We have a higher mix of GXL products, which have greater retention. and we'll have a full year of our tested retention programs. That's our path to double-digit GPS growth. We assisted our clients around the world with their mission-critical priorities, provided great jobs for our associates, and delivered another year of market-beating returns for our shareholders. Thanks for joining us today, and I look forward to updating you again next quarter.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program, and you all may disconnect. Everyone have a wonderful day.