Good morning, everyone. Welcome to Gartner's Second Quarter 2024 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 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 second quarter 2024 financial results and Gartner's outlook for 2024 is 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. Our contract values and associated growth rates discussed are based on 2024 foreign exchange rates. All growth rates in Gene's 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 call 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 2023 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 remains resilient in a complex environment. In Q2, contract value grew high-single digits. Financial results for the second quarter were ahead of expectations, and we delivered strong profitability and free cash flow. The external environment remains volatile, uncertain, complex and ambiguous. Leaders across every enterprise faced more simultaneous challenges than ever before. For example, small technology companies continue to face funding challenges. Supply chain shifts are impacting many industries. The banking industry continues to deal with higher interest rates. There are budget challenges in the public sector, persistent threats, and the potential impacts of generative AI. The list goes on. Enterprise leaders and their teams know they need help, and they know Gartner is the best source for the actionable objective insight they need to drive smarter decisions and achieve stronger performance on their mission-critical priorities. Our value proposition helps our clients save time, save money, gain confidence, manage risk, develop leadership skills, enhance their teams and achieve success. Research continues to be our largest and most profitable segment. Our research business serves leaders across all enterprise functions in every industry and in every geography. Our market opportunity is vast. Within our research business, contract value with enterprise function leaders grew 10%, and our tech vendor clients returned to growth. We continue to guide clients through a wide range of topics, including generative AI, supply chain optimization, leader and manager development, cost optimization, cybersecurity, and the recent CrowdStrike outage. Through relentless execution of proven practices, we deliver unparalleled value, whether our clients are thriving or struggling, or anywhere in between. Our research business serves executives and their teams through distinct sales channels. Global Technology Sales, or GTS, serves leaders and their teams within IT. GTS new business grew 8%. Contract value grew 6%. Contract value with GTS enterprise function leaders grew high single digits. Global Business Sales, or GBS, serves leaders and their teams beyond IT. This includes HR, supply chain, finance, lean, legal, sales and more. GBS new business grew 16%. GBS contract value grew 12%. Gartner Conferences deliver extraordinarily valuable insights to an engaged and qualified audience. Revenue grew 11% in the second quarter, and the outlook for conferences remains strong. Gartner Consulting is an extension of Gartner Research. Consulting helps clients execute their most strategic initiatives through deeper project-based work. Consulting is an important complement to our IT research business. Consulting revenue grew 15%. People are at the heart of everything we do. We get better, faster, stronger every year because we work effectively as one team to deliver unparalleled value to our clients. Our teams are committed to driving relentless execution of the best practices that will fuel long-term sustained double-digit growth. In closing, Gartner delivered financial results ahead of expectations. We delivered 10% contract value growth with enterprise function leaders. Our client value proposition and addressable market opportunity will allow us to drive long-term sustained double-digit revenue growth. We'll continue to create value for our shareholders by providing actionable objective insight to our clients, prudently investing for future growth, and returning capital to our shareholders through our share repurchase program. We expect to deliver modest margin expansion over time, and we'll continue to generate significant free cash flow well in excess of net income. All of this and more positions us to continue our sustained track record of success far into the future. With that, I'll hand the call over to our Chief Financial Officer, Craig Safian.

Thank you, Gene, and good morning. Second quarter contract value grew 7% year-over-year, accelerating about 50 basis points from Q1. We believe the first quarter marked the bottom for CV growth this cycle, barring a meaningful shift in the macro or geopolitical environment. Growth may vary from quarter-to-quarter, but we expect the overall trend will be higher from the 6.9% we delivered in the first quarter. Over the medium term, we expect both GTS and GBS to grow 12% to 16%. Second quarter revenue, EBITDA, and EPS all came in ahead of our expectations. We are updating our guidance based on the Q2 results, FX, and a change in non-subscription research revenue. We have repurchased $565 million of stock through June and remain eager to buy back stock opportunistically. Second quarter revenue was $1.6 billion, up 6% year-over-year as reported and 7% FX neutral. In addition, total contribution margin was 68%, about in line with last year. EBITDA was $416 million, up 8% as reported and 10% FX neutral versus second quarter 2023. Adjusted EPS was $3.22, up 13% from Q2 of last year, and free cash flow was $341 million. Research revenue in the second quarter grew 5% year-over-year as reported and 6% on an FX-neutral basis. Subscription revenue grew 7% FX neutral. The year-over-year change in non-subscription revenue was similar to Q1 2024. Second quarter research contribution margin was 74%, consistent with last year. Contract value was $4.9 billion at the end of the second quarter, up 7% versus the prior year and up about $67 million from the first quarter. CV from enterprise function leaders across GTS and GBS grew 10%. Contract value and CV growth are FX neutral. CV growth was broad-based across practices, industry sectors, company sizes, and geographic regions. Across our combined practices, the majority of industry sectors grew at double-digit or high single-digit rates led by the energy, manufacturing, and public sectors. CV grew double-digit or high single-digit rates across all enterprise sizes, except small, which has the largest tech vendor mix. We also drove double-digit or high single-digit growth in the majority of our top 10 countries. Global Technology Sales contract value was $3.8 billion at the end of the second quarter, up 6% versus the prior year. GTS enterprise leader CV increased high single digits. Tech vendor CV returned to growth in the quarter. GTS CV increased $40 million from the first quarter. While retention for GTS was 101% for the quarter, up from Q1, enterprise leader wallet retention was consistent with historical levels. GTS new business was up 8% compared to last year. GTS quota-bearing headcount was down 2% year-over-year as we manage tech vendor-focused sales territories in response to near-term industry dynamics. Across GTS, we continue to aggressively optimize our territories to align with where we have the best growth opportunities, and we are investing for future growth. We continue to expect mid-single-digit QBH growth by the end of the year. We have the headcount we need to meet commitments for this year. Our regular full set of GTS metrics can be found in our earnings supplement. Global Business Sales contract value was $1.1 billion at the end of the second quarter, up 12% year-over-year. All of our GBS practices grew at double-digit or high single-digit rates other than marketing, which grew mid-single digits. Growth was led by the finance, legal, and supply chain practices. GBS CV increased $27 million from the first quarter. Wallet retention for GBS was 106% for the quarter, which compares to 109% in the prior year. GBS new business was up 16% compared to last year. GBS quota-bearing headcount was up 6% year-over-year, and we continue to target high single-digit growth for 2024. As with GTS, a regular full set of GBS metrics can be found in our earnings supplement. Conferences revenue for the second quarter was $186 million, increasing 10% as reported and 11% FX neutral compared to Q2 of 2023. Adjusting for the movement of conferences across the year, revenue increased about 15% in the quarter. Contribution margin was 58%. Q2 is our seasonally strongest margin quarter of the year. We held 16 destination conferences. Second quarter consulting revenue increased by 13% year-over-year to $143 million. On an FX-neutral basis, revenue was up 15%. Consulting contribution margin was 38% in the second quarter. Labor-based revenue was $107 million, up 3% versus Q2 of last year's reported and 5% on an FX-neutral basis. Backlog at June 30 was $199 million, increasing 16% year-over-year on an FX-neutral basis with continued booking strength. In contract optimization, we delivered $36 million of revenue in the quarter, up 62% versus the prior year. Our contract optimization business is highly variable. Consolidated cost of services increased 5% year-over-year in the second quarter as reported and 6% on an FX-neutral basis. The biggest driver of the increase was higher compensation costs. SG&A increased 5% year-over-year in the second quarter as reported and on an FX-neutral basis. SG&A increased in the quarter as a result of headcount growth, which contributed to higher compensation costs. EBITDA for the second quarter was $416 million, up 8% from last year's reported and up 10% FX neutral. We have performed in the second quarter through effective expense management and a prudent approach to guidance. Depreciation in the quarter of $28 million was up 16% compared to 2023. Net interest expense, excluding deferred financing costs in the quarter, was $19 million. This is favorable by $4 million versus the second quarter of 2023 due to higher interest income on our cash balances. The modest floating rate that we have is fully hedged through the third quarter of 2025. The Q2 adjusted tax rate, which we use for the calculation of adjusted net income, was 24% for the quarter. The tax rate for the items used to adjust net income was 25% for the quarter. Adjusted EPS in Q2 was $3.22, up 13% compared with last year. We had 78 million shares outstanding in the second quarter. This is a reduction of more than 1.5 million shares or about 2% year-over-year. We exited the second quarter with about 78 million shares on an unweighted basis. Operating cash flow for the quarter was $370 million compared with $436 million in Q2 of 2023. The change reflects working capital timing, which we expect to reverse in the second half. CapEx for the quarter was $29 million, in line with our expectations. Free cash flow for the quarter was $341 million. Free cash flow on a rolling four-quarter basis was 17% of revenue and 66% of EBITDA. Free cash flow conversion from GAAP net income was 121%. Our free cash flow conversion is generally higher when CV growth is accelerating. At the end of the second quarter, we had about $1.2 billion of cash. Our June 30 debt balance was about $2.5 billion. Our reported gross debt to trailing 12-month EBITDA was under 2x. Our expected free cash flow generation, available revolver, and excess cash remaining on the balance sheet provide ample liquidity to deliver on our capital allocation strategy of share repurchases and strategic tuck-in M&A. Our balance sheet is very strong with $1.9 billion of liquidity, low levels of leverage, and effectively fixed interest rates. We repurchased $340 million of our stock during the second quarter. We have more than $1 billion of repurchase capacity after the Board recently increased our share buyback authorization by $600 million. As we continue to repurchase shares, our capital base will shrink. Over time, this is accretive to earnings per share and combined with growing profits, also delivers increasing returns on invested capital. We are updating our full-year guidance to reflect recent performance and trends. The outlook for subscription research is higher based on the latest FX rates. We increased the outlook for conferences and consulting. And our EBITDA guidance primarily reflects Q2 upside, partially offset by our updated non-subscription research outlook. For subscription research, which was about 76% of revenue in 2023, we continue to innovate and provide a very compelling value proposition for clients and prospects. The executives and their teams face uncertainty and challenges, and they recognize how Gartner can help regardless of the economic environment. For subscription research revenue, based on Q2 results and our outlook for the balance of the year, our FX-neutral guidance is unchanged. We have very high visibility into the subscription research revenue at this point in the year. For non-subscription research, which was about 6% of 2023 revenue, we help small businesses find the right software. We've updated our outlook for this portion of the segment given the most recent trends. We now expect non-subscription revenue of about $305 million for 2024. As a reminder, about one-third of our revenue and operating expenses are denominated in currencies other than the U.S. dollar. Based on recent FX rates, we expect currency to be roughly neutral in the back half of the year with a modest benefit in Q4. Our updated 2024 guidance is as follows: We expect research revenue of at least $5.105 billion, which reflects FX-neutral growth of about 5%. This reflects subscription research revenue growth of about 7%. We expect conferences revenue of at least $565 million, which is FX-neutral growth of about 12%. We expect consulting revenue of at least $530 million, which is growth of about 4% FX neutral. The result is an outlook for consolidated revenue of at least $6.2 billion, which is FX-neutral growth of 5%. We now expect full-year EBITDA of at least $1.460 billion, up $5 million from our prior guidance. We expect 2024 adjusted EPS of at least $11.05. For 2024, we expect free cash flow of at least $1.08 billion, consistent with our prior guidance. This reflects the conversion from GAAP net income of 138%. After the second quarter ended, we reached the settlement related to pandemic or event cancellation insurance. We expect pretax proceeds of $300 million during the third quarter. This is not yet included in the cash flow or GAAP EPS guidance. Our guidance is based on 78 million fully diluted weighted average shares outstanding, which reflects the repurchases made through the end of June. And finally, for the third quarter, we expect adjusted EBITDA of at least $295 million. Our financial results through the first half have been ahead of our plan despite continuing global macro uncertainty. CV grew high single digits in the quarter, and we believe Q1 was the bottom for CV growth in this cycle. We repurchased $565 million in stock year-to-date through June and remain eager to return excess capital to our shareholders. We will continue to be price-sensitive, opportunistic, and disciplined. Looking out over the medium term, our financial model and expectations are unchanged. With 12% to 16% research CV growth, we've delivered double-digit revenue growth. With gross margin expansion, sales costs growing about in line with CV growth, and G&A leverage, we will deliver modest EBITDA margin expansion over time. We can grow free cash flow at least as fast as EBITDA because of our modest CapEx needs and the benefits of our clients paying us upfront. And we'll continue to deploy our capital on share repurchases, which will lower the share count over time, and on strategic value-enhancing tuck-in M&A. With that, I'll turn the call back over to the operator, and we'll be happy to take your questions.

And it's from the line of Jeff Meuler with Baird. Please proceed.

When you’ve reiterated that you think Q1 marked the bottom for CV growth with the macro and geopolitical caveats, you said growth may vary quarter-to-quarter. Just want to, I guess, zoom in on what you're trying to signal there. Is that just an acknowledgment of the volatile end market environment? Or are you expecting that you expect deceleration at some point in the near future because of a known year-over-year comp issue or anything else that you're seeing?

So, I'd say it's definitely more about the fact that operating in a very volatile operating environment. A 10 basis points up or down is a relatively small amount of CV in any given quarter. I think the core message is that 6.9 marks the bottom, and we should be above that in every quarter moving forward, it could bounce around a little bit, and ultimately, our medium-term objective is to get both GTS and GBS back to 12% to 16% annual growth rates.

Got it. And then on the building headcount from here, I guess, the tech vendor territory, I don't know exactly the phrase you used, but I don't know if it's just dynamic territory planning. But was that something that you recently kind of kicked into gear? Or was that an ongoing dynamic? Just not sure what you're trying to signal there. Is it reassigning salespeople or just managing those territories through attrition?

Jeff, it's Gene. So, we do dynamic territory planning, which is we look at every territory, literally every territory each week to see what the productivity has been and what the kind of trend is. And then what we do is as we have turnover, whether a salesperson moves on or leaves, we have low turnover, but we do have some people leave every quarter. We look at where the most productive places are in those territories. I'll give you just an extreme example. We used to have salespeople in Russia. We decided, obviously, we weren't going to sell in Russia back when the invasion happened. So, we fill those territories with different representatives that are more productive. In a more recent example, if you look at the small tech vendor market, there are sets of small tech vendors that used to be able to get funding but today can't get funding, versus others, like those in AI that can. What we do is literally on a weekly basis, say, okay, but these people believe that we're selling to tech companies that are not going to get funding, let's take those territories and move them over to areas where in fact, like AI, where they are getting funding. So, we're doing this on a constant basis to make sure our salespeople are always deployed in the most productive territories. We do it with turnover, and again, we have cases where it's clear that they're not going to recover in the short term. We'll proactively close down those territories and move either those people or that headcount to more productive areas.

And then just sort of pulling the thread all the way through, we are targeting, even with all that dynamic territory planning, mid-single-digit QBH growth for GTS by the end of the year and high single-digit QBH growth for GBS by the end of the year. Again, implicit in all that are all the things that Gene talked about, and that's been our normal operating procedure for the last four or five years now. It's an innovation we put in place in 2019. And again, it doesn't allow us to perfectly match, but it gives us a better chance of making sure that the resources that we're investing in are actually going against the best short-term, medium-term, and long-term opportunities.

Our next question comes from the line of Toni Kaplan with Morgan Stanley. Please proceed.

I wanted to discuss the research revenue guidance. It seems like you have reduced it due to the non-subscription business. I understand that the tech vendor has returned to growth on the subscription side, but the non-subscription aspect seems to still be declining. Was the reduction in your guidance due to the non-subscription performance being worse than you initially expected, or is the growth trajectory just not as rapid as you had anticipated? Could you provide some insight into the trajectory for the non-subscription segment?

Yes, sure, Toni. I mean, the first thing I'd say is that the entire operational change relates to the non-subscription piece. The subscription revenue piece of the overall research revenue is up a little bit from foreign exchange. But from an operational perspective, the guidance is essentially unchanged from last quarter. Again, as we talked about last quarter, we believe that the bottom was going to be either Q1 or Q2. So, we had a strong, solid Q2 of NCVI and CV growth dialed into our outlook. So, all the change relates to non-subscription business.

Great. And then, the cash balance is pretty high, below leverage. You added capacity to the buyback program. Maybe just give us an update on like what conditions could we look for to kind of buy back more stock? I know you already do, but just sort of elevate that level.

Yes, sure. Our basic philosophy on buybacks is to be price sensitive, opportunistic, and disciplined. I’d underscore that all three are important in influencing our buyback philosophy. Obviously, we've returned a lot of capital since 2021 back to our shareholders. We're close to what we did in the full year '23 through the first half of '24. Our free capital or operating cash flow and buybacks are pretty close on top of each other through the first six months of the year. We'll continue to be price sensitive, opportunistic, and disciplined, but we want to ensure we are driving incremental shareholder value by leveraging our free cash flow and our balance sheet. We will look at strategic value-enhancing tuck-in M&A, and in absence of that, our bias over the last several years has been buybacks. I would presume that moving forward, we would be more focused on buybacks.

Our next question comes from the line of Andrew Nicholas with William Blair. Please proceed.

I wanted to first focus on new business growth, seemingly stepped up pretty nicely relative to the first quarter. Can you unpack that a little bit? I know at least in GTS, some of that might be some easier comps. But are you seeing better productivity from your sales force? Is there any change to the selling environment? Any color there would be great.

Andrew, it's Gene. What I’d say is the selling environment is pretty much the same. But I do think we're focusing on improving the productivity of our teams. We're always taking actions to respond to changes in the world, and I think that's the impact we see. It's not that the environment got better in any way.

Understood. And then, I'm looking at the contract value per client enterprise, and it continues to tick up nicely. Just wanted to confirm my hunch that that's the result of maybe losing some smaller tech vendor clients more so than doing a bunch of more seats into the larger enterprises. But any confirmation there or color on that metric and how you'd expect it to evolve as you have now seen the trough of CV growth.

So, Andrew, I'll begin. Craig can finish. Our primary strategy with clients is that when we engage with a client, it's not the final step. There are many opportunities to sell more seats to those clients over time. A key aspect of our sales strategy is to continue offering additional business and licensed users to our existing clients. Additionally, we also aim to attract new clients. Therefore, one element you might notice is that we have consistently focused on growing both our existing clients and acquiring new ones.

And Andrew, I would just add that if you look at wallet retention being over 100%, that encompasses what Gene just talked about in terms of once we have a client, we expand our relationship with them each year. We've conducted that for years, and we intend to continue that going forward. There is a little bit of increased churn on the small end that you highlighted, which is also helping modestly that overall CV per enterprise figure as well.

Our next question comes from the line of Heather Balsky with Bank of America Securities. Please proceed.

I was hoping to talk about your medium-term outlook and getting back to that low teens growth number. In the context of the environment right now, the selling environment, how are you thinking about the time it could take you to get back there? Also going back to your comments on the third quarter call '23, where you expected tech to return to normal growth in 12 to 18 months. Is that still on the table right now? Or do you think things have changed?

Heather, thank you. In terms of the medium-term outlook, it is our goal. Again, we do need a stable environment. I won't say a great operating environment, but a stable operating environment. I'd argue we are doing really well in a very volatile operating environment globally, probably more volatile than what we'd all like to see, quite honestly, but we're continuing to do well. GBS is growing in that medium-term guidance range today. The end-user portion or the enterprise leader portion of GTS is growing at high single-digit growth rates. We want to get that back up into the 12% to 16% range. On the tech vendor side, what I would say is small tech continues to be a super challenging operating environment. We were pleased to see the overall tech vendor business return to growth in this quarter from last quarter, but it is a super challenging market, particularly on the lower end.

Okay. That's helpful. And as a follow-up, the business tends to see consistent sequential trends in terms of CVs. Just if you look back historically, when you think about the back half of the year, is there any reason that you would deviate in any way from the sort of sequential cadence that you typically see? Generally, not like the exact number, but the trend?

Generally, no. Our selling motion, our conference calendar, things like that, which are a big piece of what drives the typical phasing, are pretty stable. No, I would expect us to follow the similar trends to what we've seen in the past. Obviously, we called out Q1 of this year earlier because it was a little off trend. But I think the back half of the year should look like a normal back half of the year for us from that perspective.

Our next question comes from the line of Josh Chan with UBS. Please proceed.

If I look at the CV growth, so GTS obviously reaccelerated nicely as you had predicted. How do you think about the shape of GBS as that's been kind of moderating slowly perhaps because of the macro? How do you envision GBS trending from here?

So GBS, first, we grew 12% in the quarter, which we think is really good. The second thing is GBS has a tremendous market opportunity. We are aligned to go capture that opportunity over time. CV is going to bounce around a little bit quarter-to-quarter, but we have huge market opportunities there, and we're prepared to go get it.

And again, the medium-term objective for that business is 12% to 16% growth, and we continue to believe that the GBS business and the GTS business can both deliver 12% to 16% CV growth.

Our next question comes from the line of Brendan Popson with Barclays. Please proceed.

This is Brendan on for Manav. I just want to ask, there's been some, I guess, just reports on companies facing kind of like a Gen AI tech on their IT budgets just with the expense of some of the new technology. I was just curious if what you guys have seen related to that and kind of what your customers are saying? Any impacts from that? Obviously, it's also an opportunity as well, but just what you're seeing near-term.

Yes, it's a great question. So, Gen AI continues to be a topic of very, very high interest with all of our clients. If you look at kind of our enterprise function leaders as opposed to the tech companies, they're easing into the investments. The tech companies are moving aggressively. The enterprise functional leader businesses are starting to invest and looking for the best use cases where they can get the highest return on Gen AI. I think people are still wrestling with what the right formula is there. This is great for us because it's a topic of very high interest, they're spending money on it, and it's important to them. It's a place where we can really add a lot of value.

Okay. And then just following up on the cash and leverage you mentioned. You have previously indicated that tuck-in M&A could be a possibility. Can you provide some insight into the types of tuck-in M&A you might consider?

Brendan, it's Craig. So generally, we think about M&A from kind of three angles. One would be enhancing our research coverage in some area. So, it could be where we need more in marketing, or we need more in finance, or something like that. So that would be one flavor of acquisition, looking for assets that could enhance the insights we provide to operating executives that are our target audience. Second would be a geographic fill-in, sort of the same tone and tenor there, but going after geographies where we're not as strong or don't have much critical mass. Then third, and perhaps fourth, would be assets or technology-type acquisitions that could help us catalyze getting to market faster or buying some capability that is really valuable to us that we can then leverage across the enterprise. If you look at the last five to six years, we’ve done a small number of acquisitions across those categories, and that's sort of what the M&A radar screen looks like today.

Our next question comes from the line of Surinder Thind with Jefferies. Please proceed.

Can you maybe talk about just the thought behind the cadence for your hiring plans at this point? It sounds like it's going to be quite back-half loaded. Is that just looking for additional data points? Any color there would be helpful.

So, if you look at our approach to hiring, the market overall has been very uneven over the last few years. There was a pandemic where we slowed down our hiring dramatically. Then there was the tech bubble afterwards where we couldn't hire people because tech companies were aggressively hiring. The year after that, the tech companies were laying people off, making it easier for us to hire. We filled many junior positions, and we want to ensure those employees reach full productivity. We also want to observe the macroeconomic and geopolitical environment, which seems to be more stable now. The tenure of that group we hired two years ago is now at a stable point. It makes sense to ramp our hiring up. The people we hire in the second half of the year will position us for 2025-2027 since their productivity increases over the first three years. This additional hiring we're planning to do is really about returning to what we've done traditionally before the last few turbulent years. We expect that hiring trend to stabilize and continue forward.

And Surinder, the other thing I'd just add is from where we are today, it's another few hundred net people by the end of the year. It may sound like a big move, but it's not given the trend. Again, if we target mid-single-digit growth for GTS and high single digits for GBS, it’s a few hundred more people between now and the end of the year.

That's helpful. And then you mentioned CrowdStrike in the prepared remarks. How does something like that impact the business? Is it just more engagement with existing clients just wanting to access more resources? Or does this drive incremental demand at the top of the funnel that maybe you can convert in the back half of this year?

So, our whole strategy is to help our clients with their most important priorities. The CrowdStrike incident last Friday was certainly one of those big priorities. We did see a big uptick in demand from our clients. It helps engagement. We immediately did a bunch of things to provide support. We had a panel webinar that day. We published a document that day. We had a live stream and a series of other resources to support our clients. We are meeting their immediate needs, which is great for our demand. It benefits both our existing clients and new clients, giving them a reason why they should buy. So, the situation with CrowdStrike is beneficial to us in these challenging times.

Our next question comes from the line of George Tong with Goldman Sachs. Please proceed.

Enterprise functional leader CV growth was 10% in the quarter, which is pretty similar compared to 1Q. Can you elaborate on some of the trends you're seeing here and if the momentum exiting the quarter was stable or improved?

I would say the selling environment was pretty consistent between Q1 and Q2. There’s not a lot of change. I don't think our execution was better, it’s just why we had a little bit of pickup in parts of our business. The overall macroeconomic and geopolitical environment didn't change much between Q1 and Q2.

Okay. Got it. That's helpful. And then research subscription revenue growth outperformed in the quarter, but you're holding your outlook for research subscription revenue unchanged for the full year. What factors are holding you back from raising your research subscription outlook for the full year?

George, the way I would characterize it is that we came in roughly where we thought we were going to land from a research subscription revenue perspective in the second quarter. CV growth did accelerate 50 basis points from Q1 to Q2. That was pretty much baked into our full-year outlook. So, from where we stand today, we feel really good about the research subscription revenue line, as we mentioned in the prepared remarks. That's obviously the revenue line with the greatest visibility, but modest changes in CV don't have a huge impact from now until the end of the year. The CV growth delivered this year will really determine 2025 revenue, so I think our perspective is sort of on target or on expectation for Q2. No change to the research subscription revenue line for the balance of the year other than the modest uptick we dialed in for foreign exchange.

And our next question is from Jeff Silber with BMO Capital Markets. Please proceed.

I wanted to focus on retention. The retention metrics still going down. I know the declines seem to be getting less worse, which is good to see. But what do you think it will take to get the retention metrics starting to move in a positive direction again? Is there anything you can do from your end?

Focusing on GTS first, while retention, as I think I mentioned in the prepared remarks, for the enterprise function leader part of the business is at historical levels and continues to be pretty strong there. What you're seeing is the continued challenges in the tech vendor market, particularly among small tech vendors, diluting the retention metrics a little bit. We will eventually wash through this. It will take some time because it’s not as simple as thinking about the business you sold 24 months ago. It's client-specific regarding their funding, cash flow problems, etc. You're still seeing a drag down from small technology companies that are affecting retention. On the GBS side, we have strong wallet retention metrics, and client retention is relatively robust as well.

Okay. Great. And if I could shift over to the contract length for research. If I remember correctly, at one point in time, you were selling more three-year contracts. I might be wrong, but I think more recently, probably shifting a little bit more towards two years. If you could just remind me. Are a lot of those two-year terms coming up for renewal over the next few months or so?

Yes, Jeff, our standard contract length is 24 months. We do write some that are 12 months and a few that are 36 months, but the vast majority are 24 months. So we have a significant amount of contracts coming up for renewal in basically every quarter because our sellers and our clients primarily consume 24-month contracts. I think our average contract length is somewhere in the 1.7- to 1.8-year range. More than 70% of our contract value is multi-year in nature. So, we're consistently going to have two-year and three-year deals coming up for renewal pretty regularly.

Thank you. And as I see no further questions in the queue, I will pass the call back to the Chairman and CEO, Gene Hall, for his final comments.

Here's what I'd like you to take away from today's call. Gartner delivered financial results ahead of expectations. We delivered 10% contract value growth with enterprise function leaders. We have a vast addressable market opportunity and a strong and compelling client value proposition. Looking ahead, we are well-positioned to drive sustained double-digit revenue growth over the long term. We will continue to create value for our shareholders by providing actionable objective insight to our clients, prudently investing for future growth, generating free cash flow well in excess of net income, and returning capital to our shareholders through our share repurchase program. Thanks for joining us today and I look forward to updating you again next quarter.

And thank you all for participating in today's conference, and you may now disconnect.