Gartner shares fell 13.3% after earnings, despite management raising full-year guidance. The call points to continued pressure in client spending: downsell remained relatively stable, while the company said winning new business is an important opportunity to drive stronger performance in coming quarters.
- Management said Q3 revenue, EBITDA, adjusted EPS, and free cash flow were ahead of expectations, and contract value growth accelerated for the third consecutive quarter.
- NCVI dollars increased sequentially from Q2, about in line with historical seasonality; wallet retention improved sequentially, while downsell was relatively stable for a second quarter.
- Core GBS subscription products grew 7%; sales and finance practices grew at high-single-digit rates. Software and services within tech vendors grew mid- to high-single digits.
- The U.S. federal business continued to normalize, though Gartner reported about $15 million of federal NCVI in Q3.
- Gartner said it expanded margins year over year, generated strong free cash flow, and repurchased $1.7 billion of stock over the past four quarters.
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