Gartner, Inc.

Good day, and welcome to Gartner's third quarter 2025 earnings conference call. This call may be recorded. I would like to turn the call over to David Cohen, Senior Vice President of Investor Relations. Please go ahead.

Good morning, everyone. Welcome to Gartner's third quarter 2025 earnings call. I'm David Cohen, SVP of Investor Relations. At this time, all participants are in a listen-only mode. After comments by Gene Hall, Gartner's Chairman and Chief Executive Officer, and Craig Safian, Gartner's Chief Financial Officer, there will be a question and answer session. Please be advised that today's conference is being recorded. This call will include a discussion of third quarter 2025 financial results and Gartner's outlook for 2025 as disclosed in today's earnings release and earnings supplement, both posted to our website, investor.gartner.com. On the call, unless stated otherwise, all references to EBITDA are for adjusted EBITDA with the adjustments as described in our earnings release and supplement. All contract values and associated growth rates we discuss are based on 2025 foreign exchange rates. All growth rates and jeans comments are FX neutral unless stated otherwise. All references to share counts are for fully diluted weighted average share counts unless stated otherwise. Reconciliations for all non-GAAP numbers we use are available in the Investor Relations section of the Gartner.com website. As set forth in more detail in today's earnings release, certain statements made on this column 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 2024 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 Chairman and Chief Executive Officer, Gene Hall.

Good morning, and thanks for joining us today. Gartner's Q3 financial results were ahead of expectations. The macroeconomic environment remains dynamic, with DOGE, changes in the federal government, and evolving tariff policies. We made operational adaptations that are starting to yield results. We continue to deliver great value to our clients. Enterprise client retention remains strong. and contract renewal rates improved from the second quarter. Finally, we repurchased more than $1 billion of stock in the quarter, reducing share count by 6% year over year. AI will be one of the most innovative and pervasive technologies in history. We're seeing unprecedented demand for help with AI, and we're meeting that demand. We're helping tens of thousands of clients in thousands of enterprises across every function, Every size enterprise, every geography, and every industry determine how best to use AI. We've developed indispensable AI insights that are captured in more than 6,000 documents, and our insights are growing every day. To put this into perspective, if you read 10 documents per day, it would take about two years just to get through our current library. While enterprise leaders are excited about the prospects of AI, they continue to chase returns on those investments. We've cataloged more than 1,000 AI use cases, spanning roles and industries, that outline which have the highest ROIs and why. These are indispensable insights. In addition, our entire client base has access to our AI drone tool, Ask Gartner. Ask Gartner enables quick access and generates in-depth summaries of our business and technology insights. We continue to accelerate and enhance Ask Gartner's capabilities at a rapid pace. Our insights are derived from Gartner's vast pool of proprietary data, It is unique, highly differentiated, and not available in the public domain. This includes data from Gartner IT Keymetrics, which is the industry's largest key metrics database, our vast online peer network of more than 139,000 unique users, our more than 500,000 one-on-one client discussions annually, and our more than 3 million ratings and reviews of technology and software services. All of this and more uniquely positions Gartner as the best source for helping clients determine the right AI tools, applications, and benefits. We're also leveraging AI to improve productivity and effectiveness internally. Gartner's data science team is using our sophisticated proprietary AI model to quickly and systematically determine the topics of greatest interest to our clients. We've provided our experts with advanced proprietary AI tools for content production. The amount of content published per analyst is up 31% year over year. Over time, we expect this will have a meaningful impact on retention. And we've reduced our average publishing time by 75% compared to last year. This allows us to respond to changes in the market faster than ever. Our service delivery teams are leveraging our AI tools to be better prepared for client discussions. And our sales teams are using AI to hone their selling skills. As we continue to navigate the dynamic external environment, Our adaptations are beginning to yield results. Client engagement is a leading indicator of future retention. Client engagement was up in the quarter. Client retention is higher than last year. Productivity of our business development executives, who sell to new enterprises, is strong. And across GTS and GBS, our new business pipeline is up double digits. Gartner conferences is also an important indicator of client value. Licensed users who attend our conferences retain at higher rates. Prospects who attend our conferences convert to clients at higher rates. Attendee ratings of our conferences are reaching all-time highs. I recently returned from our 35th annual IT Symposium Expo in Orlando, Florida. We hosted more than 7,000 technology leaders over the four-day in-person conference. You can't find this many senior technology executives gathered together anywhere else. Attendance at the conference was up 8% year over year, excluding the US federal government and Canada. Attendees gave the conference a very strong net promoter score of 75. About one third of the nearly 600 sessions onsite covered the topic of AI. Our opening keynote framed the AI journey across two dimensions, AI readiness and human readiness. Gartner analysts discussed how CIOs can navigate vendor choices reimagined the workforce, and redefined organizational identities to be agents of change. It was our highest-rated keynote ever. Looking ahead, advanced exhibitor bookings for our 2026 conferences are strong. In summary, while the macroeconomic environment remained dynamic, Gartner's Q3 financial results were ahead of expectations. We made operational adaptations that are starting to yield results. We continue to deliver great value to our clients. Enterprise client retention remained strong and contract renewal rates improved for the second quarter. And we repurchased more than $1 billion of stock in the quarter. AI will be one of the most innovative and pervasive technologies in history. Gartner is the best source for clients to determine the right tools and applications for their environments. And of course, we continue to help on other mission critical priorities, such as cybersecurity. We're also leveraging AI to improve productivity and effectiveness internally. Compelling client value, strong demand, operational adaptations, and modest normalization of the external environment give us a clear path back to long-term, sustained, double-digit growth over the medium term. With that, I'll hand the call over to our Chief Financial Officer, Craig Sapien.