Conference Transcript - IT 2026-03-12

Wahid Amin, Analyst — B of A

My name is Wahid Amin, and I'm part of the business and information services team here at B of A. This session will be on Gartner, and I'm pleased to have David Cohen here, who runs investor relations at Gartner. We're going to structure this session as a fireside conversation, and then we'll field questions towards the end, if time permits. So, David, appreciate you joining us today.

David Cohen, Head of Investor Relations

Thanks for having me.

Wahid Amin, Analyst — B of A

Thanks to everyone in the room and those of you who are listening on the webcast. Awesome. So let's start off with a question that we're asking all information services companies this quarter or this year. And across the info services space, there's been debate amongst investors regarding the defensibility of the intake business by LLMs. Given that LLMs are trained on vast amount of public data, how do you define the moat around Gartner's proprietary research in an area where AI can synthesize general business advice?

David Cohen, Head of Investor Relations

Yeah, so thanks. It's an important place to start because it's a top of mind focus for investors. And I think understanding, you know, how we're positioned starts with the client value proposition. It's our longstanding client value proposition, and it remains very compelling. And we're very focused on helping senior operating executives make better decisions when they're addressing their strategic priority. When I talk about senior operating executives, think about the direct reports to a CEO. So we're helping the chief information officer, the chief supply chain officer, and across the other major enterprise functions. The problem that they're looking to us to help address are complex, multidimensional challenges. They don't lend themselves to, hey, I've got a question, give me an answer. And more important, perhaps, they don't lend themselves to answers that are based on publicly available information. And, you know, the foundation of the value proposition starts really with our 2,400-plus experts. These are often former practitioners. They've got lots of knowledge, lots of experience. And so they offer tremendous value. When you combine that with more than 500,000 client interactions a year, more than 20,000 vendor briefings every year, and several terabytes of proprietary data, there's a really important remote. In addition, our clients have confidence that the insights that we're providing to them are independent, they're objective, they're unbiased. And so, you know, if you're a chief information officer and you're looking to provide reassurance to your board of directors, for example, about your information security strategy, there's no way to benchmark that with publicly available data. Companies don't disclose their information security architecture, their spending, the skill set, and so on. These are hard, complicated problems and questions where our clients are looking to us for help. And so that's the foundation, really, for why we continue to be extremely helpful to our clients, extremely relevant as they're addressing their strategic priorities.

Wahid Amin, Analyst — B of A

Awesome. So we've talked about why, you know, there's a more on governance proprietary data, but let's switch into how Gen.A.I. is helping them. So management has described Gen.A.I. as a huge opportunity for both internal efficiency and for client demand. And on the client side, are you seeing AI inquiries replace traditional optimization research, or is AI acting as a massive hop-of-funnel driver that is bringing entirely new type of business leaders to partner?

David Cohen, Head of Investor Relations

Yeah, the first place where AI is important to us is that it's important to our clients. So roughly 40% of our content in 2025 was related to AI. A similar percentage of our client interactions were related to AI. Across all the major enterprise function, IT, finance, legal, AI is an important topic. And we're uniquely positioned to help our clients navigate how they can and should be addressing AI in their organization. We've got a database of several thousand use cases. because clients are coming to us and saying, well, I've made some investments in AI. I'm not seeing the returns that I've wanted. You know, am I doing something wrong? Is somebody else doing something differently? And because of the network benefit of the extensive number of clients we have and the interactions we have with our clients, we can bring that visibility. We can bring that perspective to help these senior operating executives think through their AI strategy. it's also a really important topic with our technology vendor clients one of the ways that Gardner has talked about AI is that there are two races being run there's a vendor race which is an all-out sprint and then there's the enterprise consumption of AI which is moving at a more measured pace obviously there's a wide range with some people out front more early adopters, other people, you know, taking a more gradual approach. But with the technology vendors, every time there's, you know, an incremental or even step function change, the tech companies need to think about, you know, the competitive landscape they're facing, the product roadmap, how fast do they need to introduce features? What are their clients saying about their needs from an AI perspective. And so we're able to add a lot of value, not just for the enterprise function leaders, but for those technology companies as well. I would point out part of our longstanding value proposition is that we're going to help our clients with their priorities, no matter how they may shift and change over time. So we serve individuals in roles within the functions. We don't price or sell products discreetly by a given topic. There's no AI module because the value proposition is that if you're a Gartner licensed user, we're going to help you, whether the topic is AI or information security, developing the next generation of leaders or whatever else it might be. So that's the first area, serving our clients from an AI perspective, really, really important, really going well because they need to help. And again, we're uniquely positioned to provide that. The next place I would point to from an AI perspective is that we're leveraging Gen AI. We've created a front end to Gartner.com. So when you subscribe to the Gartner Insights, you can log in and you'll get information about topics that are trending among your peers. You could pick up where you've left off. There's a longstanding search capability. But now with Ask Gartner, you can ask a natural language question. And by the way, it doesn't have to be in English. We're seeing increasing use of Ask Gartner in other languages. The natural language answer will also offer you questions that you didn't ask, but that you should consider. We're going to give you access to the underlying written content, pointers to all of that as well. And so we started to roll out the beta release in mid-2025. We finished the beta rollout to all of our licensed users by the end of October last year. Uptake has gone well. The adoption is growing. We've gotten very encouraging feedback, and we're seeing increased usage of the platform because of Ask Gartner. So the clients that are using Ask Gartner are spending more time at Gartner.com. They're coming back to Ask Gartner. And so we're very encouraged, very excited about that. It's still relatively early, but during the fourth quarter, with the small sample size that we had, we saw retention rates for clients that had been using Ask Gartner notably better than retention rates for clients who had not yet Ask Gartner. So I don't want to overstate that just yet because it is small sample size, but going well is certainly very encouraging. Beyond improving the user experience, we're leveraging AI. And by the way, AI is a broad set of technologies, although often I think people think about it in the context of Gen AI. We've used different types of AI throughout the organization in the past. In terms of Gen AI, a couple of exciting internal use cases are our service people are able to be more efficient preparing for client meetings because we're able to use Gen.A.I. to synthesize for our service people what our clients have been reading. We've had very good success with training our salespeople with a tool that we built, leveraging AI. You know, the sale of the Gartner product is a consultative sale. And, you know, one of the ways that we train our sellers is a role planner. Well, being able to leverage Gen AI frees up the colleagues who had historically been supporting the training of the new sellers, and that's been going quite well. And so we've got more selling capacity time because we've freed people up by leveraging AI. You know, for our, you know, we've got a neural network based demand sensing tool that helps our experts prioritize and focus their time on the topics that matter most. There's been a lot of focus on reinforcing best practices at Gartner around making sure that the content we're creating is maximally impactful, that it's as timely as it needs to be, and that we've got the breadth of coverage to be able to serve and support all of our companies. So, you know, we're finding, you know, lots of opportunities, as I mentioned, serving clients, delivering insights to clients, and then looking for ways to get better at doing what we do.

Wahid Amin, Analyst — B of A

Awesome. And a point you brought up was Ask Gartner. I just want to unpack that a bit more. Gartner analysts remain the human element of the value proposition. How does the role of the developer analyst evolve when a client can use Ask Gartner for the what and the how? What does the analyst value come beyond that?

David Cohen, Head of Investor Relations

Yeah, as I mentioned earlier, you know, our experts are the foundation for all of the insights that we're providing for our clients. You know, probably 90% or so of our contract value comes with product where the clients will have access to speak to our experts. So there's a tremendous amount of value that our experts are able to deliver. And that's critically important to our clients in being able to go deeper, dig down, optimize the insights for their specific needs. You know, our experts have lots of knowledge in their head that doesn't sit within the written product. It doesn't necessarily sit within the proprietary data sets that we have. And so, you know, there's always going to be a critical role for our experts, both in terms of creating the insights as well as in delivering the insight to our clients. You know, as we as we think about Ask Gartner, one of the things that we've started to see is that because our our clients are able to find the the insights that they need faster than they had historically. And one of the things that clients have told us in the past is that we have so much valuable content that historically it was sometimes a challenge to find exactly what they needed. Ask Gartner has gone a long way to helping the clients find what they need. And so I think we're starting to see the clients leveraging Ask Gartner and then going into the discussions that they have with our experts at a whole deeper level. And so to the extent that our clients are able to get up to speed on a lot of the insights more quickly, our view is that they can have a much more impactful conversation. conversation, and perhaps they would have in the past. And so we see a lot of value that Ask Gartner is bringing at an underlying level to helping, you know, really enhance the value of the expert.

Wahid Amin, Analyst — B of A

Great. I know we've talked a lot about AS. Let's switch a little bit to contract value. Total CV growth has moderated to say low, flat to low single digit growth recently. it's a departure from the historical double-digit growth algorithm. While the macro environment is always a factor, usually this time of year, how much of the deceleration is a timing issue of when new sales hires reach full capacity versus the forward?

David Cohen, Head of Investor Relations

Yeah. I think people sometimes forget that during 2024, contract value had been re-accelerated. So the growth had gotten better as we were moving to 24. We went into 2025 hoping for a normal year. It's been a long time, I think, since the world has had a normal year. And we felt really good about the opportunity to continue to accelerate in 2025. And then, to your point about the macro, I'll broaden it to external factors. the U.S. federal business was about 5% of contract value when it started in 2025, and it finished the year a little bit less than half of that. The Doge and related initiatives put a lot of pressure on that U.S. federal business. That was unrelated to the client value competition. This was essentially an external force within the federal government, essentially dictating that the spend with Gartner needed to be reduced. Our client, the licensed users, continued to see the value, oftentimes pushed back and said, no, this is really important because if the mission of Doge is to leverage technology to make government more efficient, there are very few ways, if any, to look to leverage technology to make government more efficient outside of the guard or subscription. For a very reasonable price point, it's an annual subscription. You get access to all of the insiders. And so the value proposition is very compelling. The drag to the growth was not related to the value proposition. It wasn't people saying, I'm not sure where the value is. Our clients understand the value that we're able to deliver. It was also a more difficult selling environment on the commercial side. So downstream of the federal government, there's a lot of bell tightening going on. The tariff dynamic affected, you know, different industries in different ways. You know, about 40 percent of Gartner's contract value comes from enterprises within tariff affected industries. But this is another example where it was not about the Gartner-Klein value proposition, which remained compelling throughout the year. It was companies looking to tighten their belt. Because if you're a CEO or a CFO in a tariff affected business, when, you know, the tariffs hit and, you know, they've been pretty dynamic in terms of the levels and, you know, where they apply, if you can't pass those costs along, you have to manage your other expenses very aggressively. And that just made for longer sales cycles, more escalations. And that became a headwind to growth in 2020, 25 that we hadn't expected at the start of the year. You know, I think we finished the year with mid single digit growth and contract value, excluding the federal business, which, you know, I think reflect the level of resilience. you know that it's not Gartner historical growth rates it's not the Gartner growth rates that we know were capable of delivering but it was a pretty resilient performance in the face of a much more challenging selling environment in particular more challenging than we'd expected okay and then just on the topic of businesses tightening their belts and the budget constraints clients, how would you describe sort of the client engagement with those type of clients?

Wahid Amin, Analyst — B of A

And as those contracts are coming up for renewals, are you seeing the higher level of engagement bringing some of those conversations towards the finish line?

David Cohen, Head of Investor Relations

Yeah, in terms of client engagement, client engagement increased in 2025 versus 2024. We measure engagement across many different variables. Things like Ask Gartner, which we talked about earlier, analyst inquiries, conference attendance. And so broadly, engagement levels improved in 2025. And they've been tracking consistent with historical levels. I think there's a spike back in 2020 when everybody went home because of the pandemic. And then we had a renormalization. And so, you know, engagement tends to be a leading indicator of retention. You know, one of the things that Gene talked about on the last earnings call related to efforts we're making to drive improvements in the content, because we know that that will drive improvements in engagement. And we're looking for even higher than normal improvements in engagement to be able to drive improving retention. So in an environment where there are these external factors, we recognize that we need to be delivering even more value than normal to offset, you know, sort of those Gartner, not related to Gartner spending constraints that companies might feel at their own. okay on that last point when there are times of uncertainty you know gartner's view that sometimes as um counter cyclical you know during these times clients need more data more information to decide what to do when you have these conversations how are they like on the defensive side versus when they're on the offense yeah well i mean i think we've got a track record of being resilient in the face of external factors, macro, geopolitical. If you look back to, you know, the financial crisis, if you look back to the pandemic, you know, contract value growth was resilient. We're not immune to these factors, but because we've got the ability to serve our clients and help them in good times and in challenging times, we're adding a lot of value regardless of where they are. You know, there are going to be times when, you know, the budget constraints are such that it's harder to drive, you know, incremental licenses within the existing clients. And in 2025, we saw slightly less than normal levels of upsell. We saw slightly higher levels of downsell because of these budget constraints. Historically, what we've seen, you know, is that when external factors drive budget constraints, we tend to see win backs of those licenses. In any event, we've got insights related to things like cost optimization. When the pandemic started, we rolled out pandemic-related insight. You know, in 2025, we rolled out tariff-related insight beyond, you know, the content that we already had. Our teams are nimble. They adapt. And we're very commercially oriented, prioritizing the topics that matter most to our clients. And we've got an ability to adapt and pivot to changing needs of the client. So if a client is moving from growth mode to cost, excuse me, cost discipline mode, we've got the ability to support them with benchmarking and best practices, context, perspective, and deep insights to help them.

Wahid Amin, Analyst — B of A

Got it. Okay. So just shifting over to the other parts of your business, the conference segment shown strong pricing power and attendance recovery post-COVID. Do you view the attendance at a conference as a leading indicator for future Insight TV growth, adding as a proof of concept for future prospects?

David Cohen, Head of Investor Relations

Yeah, the conferences business is a really important complement to the insights business. It's one of the ways that we really bring the insights to life. Our strategy for conferences is to have a conference for each of the roles we serve within the insights business replicated across geographies. the conferences business is a great tool for delivering insights and value to our clients it's an opportunity for them to network with peers engage with vendors there's really tremendous value that we have to offer it's a great tool for retention as well as for you know driving new business with perspectives. It reinforces the strength of the Gartner brand. In some ways, it's a marketing function that we run with 50% gross margins. So it's a really good business. The team had a good year as they usually do in 2025. The results were good. Ex-Fed, The attendance was good across the conference's portfolio, and we're excited for another good year in 2026 for the conference's business.

Wahid Amin, Analyst — B of A

And then just touching a little bit on the consulting business, in some variability, particularly in the contract optimization side, how much of the consulting performance is currently tied to finance asking for help specifically with AI implementation roadmaps versus traditional IT cost code?

David Cohen, Head of Investor Relations

Yeah, the consulting business is another important complement to the Insights business. The primary goal is to support clients on technology strategy and technology project management when they want to go beyond the scope of an Insights subscription and want to engage with us on an extended project basis. About three-quarters of the consulting business relates to IT, labor-based strategy, and project management work. We don't do any software development. We don't do any system integration work there. And certainly, we're helping clients with things like their AI strategies. There continues to be, you know, important engagement around things like legacy modernization, you know, migrating to the cloud, cost optimization, digital transformation. So there's a wide range of topics, including AI, where, you know, we're helping our clients think through their strategies. The other part of the consulting segment we call contract optimization. That part of the business, it's very good, but it's highly valuable. We're helping our clients save money when they're negotiating contract with their vendors. And we're getting a percentage of the savings. That business, part of the business, has been very strong for several years. You know, aside from the variability that's inherent in the timing of when, you know, the revenue comes in based on when we help our clients, you know, it's a very good business. You know, it's generally going to be acyclical, maybe even a little bit countersick.

Wahid Amin, Analyst — B of A

The switching topics here, many investors look at Gartner as a proxy for the global IT economy. if Gartner is the canary in the coal mine, what is the canary telling us right now about the health of IT spending over the next few years?

David Cohen, Head of Investor Relations

Yeah, it's an interesting question. There's often a perception that our business is tied to IT spending. We certainly help both the vendors and the enterprise consumers of technology with decision making. But because of the nature of the value proposition were probably more closely tied to global expense trend broadly rather than tech spending itself. So, for example, you know, in 2025, you know, our growth was slower, you know, than our typical level. If you looked at, for example, and I use this not because it represents with the whole client base, but because the numbers are readily available, at the B500, EBITDA expense growth moderated. I think the Gartner view is that technology spending is and will remain strong. It was strong in 25, it will remain strong in 26. And so, you know, I don't think there's, you know, any reason sitting here today to think that there's some you know read through for tech spending um partly because again we're not a direct play on tech spending um you know if we were you know it wouldn't make sense that we've been wildly successful in supply chain and hr and finance and all these other areas um and and so i think the uh you know the outlook from you know the garden experts is uh continued huge strength in technology spending, demand for technology, broadly across industries, across sectors, across companies.

Wahid Amin, Analyst — B of A

Awesome. And then just before we open the floor for questions, we're asking those who are presenting with us today to do a quick word association. So tell me the first thing that comes to mind when we say the following. When we say what? When I say the following. Oh, okay. CV stabilization.

David Cohen, Head of Investor Relations

Eminence.

Wahid Amin, Analyst — B of A

Proprietary data.

David Cohen, Head of Investor Relations

Foundational to the Gartner business. Workflows. An important way where we overcome. Tech spending. We just talked about tech spending. Tech spending is good.

Wahid Amin, Analyst — B of A

The last one for you, Gene Hall. Extraordinary leader. Awesome. Okay, we'll open up some questions for now. If anyone has...

Speaker 2

Maybe I'll kick it off. Yeah, so thanks to the leader. So, as you're saying, so tech spending, I'm just trying to get a better sense on the correlation, especially with AI, you know, spend certainly impacting how companies are taking when you reference 70, 500 expenses that would have moderated here. So, is it more maybe tied to corporate headcount? So, in other words, if banks are saying we can cut our headcount by 15% over the next five years because of AI, and we'll see on maybe the retail side versus wholesale, what impact would that mean for your business if headcount actually starts to come down or at least moderate from here?

David Cohen, Head of Investor Relations

Yeah, it's an important question. And just for the webcast, if you couldn't hear, the question had to do with, you know, headcount as a potential factor in the growth outlook for Gartner. We sell to the senior operating executives within an enterprise. So think about fee level and one or two down. So the CIO, his or her direct reports, their direct reports, that's our primary focus and client base. The average client today has about five licenses. We're not selling to the frontline programmers or accountants that I think people are wondering if those those jobs might might be at risk. So we have an individual licensed user go to market sales model, but it's not sort of the broad based, excuse me, model that you might find with lots of software businesses. You know, in terms of what drives the growth, there's a very large underpenetrated addressable market opportunity. There are millions of senior operating executives that don't have a Gartner license today, but have overlapping priorities with the clients that we're serving and supporting and helping right now. And so, really, the Gartner growth opportunity is about retaining the existing clients and then going and selling to all of those who don't yet realize how much they can benefit from a Gartner license.

Speaker 2

Right. Maybe just a follow-up. So at some companies, information services are potentially looking at going from a seat-based model to maybe more of an enterprise model. It doesn't sound like that's necessarily an issue with partner, just because the number of seats are very consolidated at the top. But I don't know. Is there any rethinking on that? And again, you referenced earlier partnerships. Is that maybe on sales model, do you need more partnerships to maybe address that TAM opportunity?

David Cohen, Head of Investor Relations

Yeah, so the question was about, you know, some info services companies may be exploring enterprise models. Would Gartner consider that? And then, you know, a little bit about potential partnerships and how we go to market. On the first point, I think our view has long been and remains that we're delivering value to the individual licensed users. It's really important for us to stay close to them, to understand what their priorities are, to make sure that we can help them address those priorities. So that individualized relationship becomes very critical to how we deliver the insight. The creation of the content is scaled on the back end. We get the benefit of scale and network effects, but the value delivery ends up being individualized. So I think that model remains the right one for Gartner sitting here today. I certainly understand how there might be other businesses where the model might need to change over time, depending on how things play out. From a go to market perspective, you know, it's a product that's an intangible. It's not a replacement. It's very much of a consultative sale. It takes feet on the street. It takes our excellent frontline salespeople interacting with a prospect, understanding their mission, critical priorities and mapping how we can help them with those priorities. So that direct sale model is also, you know, very important to how we go to market. The value that we're able to deliver to our clients, again, highly individualized, you know, in the realization and having that direct relationship with the clients is very important and very valuable, both to us and to the client.

Wahid Amin, Analyst — B of A

Thank you. David, I think we have time for one short question before we end up. You mean a short answer, I think is what you mean. With that, well, David, appreciate your time. Thank you so much, and thank you all for joining us. Thank you for having us.