Craig W. Safian
Chief Financial Officer at Gartner
Thank you, Gene, and good morning. Fourth quarter results were again excellent with acceleration in our contract value growth rate and strength in revenue, EBITDA and free cash flow. As our 2022 guidance highlights we expect double-digit FX-neutral revenue growth and a margin of 20% even while increasing our hiring and restoring costs to invest for the future. Our financial performance for the full-year 2021 included total contract value up 16%, total revenue growth of 15%, EBITDA growth of 57%, diluted adjusted EPS of $9.22, up 89% and free cash flow of $1.3 billion, up 53% year-over-year.
Fourth-quarter revenue was $1.3 billion, up 17% year-over-year as reported and 18% FX-neutral. In addition, total contribution margin was 69% up nearly 100 basis points versus the prior year. EBITDA was $307 million up 25% year-over-year and up 26% FX-neutral. Adjusted EPS was $2.99, up 88%. Free cash flow in the quarter was $214 million down 10% against a very tough compare. Research revenue in the fourth quarter grew 17% year-over-year reported, and on an FX-neutral basis.
We drove both strong retention and new business in the quarter. Fourth-quarter research contribution margin was 74%, up almost 180 basis points versus 2020. Higher than normal contribution margins reflect improved operational effectiveness, continued avoidance of travel expenses, and lower than planned headcount. For the full year 2021, research revenues increased by 40% on a reported basis and 12% FX-neutral. The gross contribution margin for the year was 74% up more than 190 basis points from the prior year.
Total contract value or total CV was $4.2 billion at the end of the fourth quarter up 16% versus the prior year. CV growth outperformed our expectations throughout the year. Quarterly net contract value increase or NCVI was a very strong $266 million quarterly NCVI is a helpful way to measure contract value performance in the quarter even though there is notable seasonality in this metric. Looking at the quarterly NCVI across 2021, we generated more NCVI earlier in the year than we have historically.
We also had a higher than normal level of NCVI earlier in the quarters than usual. Both of these timing factors contributed to strong subscription Research revenue in 2021. So CV growth was led by the manufacturing, services, and technology industries. Looking at the roles we serve technology research which is sold by our GTS team accelerated to 14% growth and all of our GBS practices achieve double-digit growth rates with the majority, growing more than 20% year-over-year.
Growth in the fourth quarter was led by supply chain, HR, and sales practices. Global Technology Sales contract value was $3.4 billion at the end of the fourth quarter, up 14% versus the prior year. GTS had quarterly NCVI of $205 million in the quarter. While retention for GTS was 106% for the quarter, up almost 790 basis points year-over-year. GTS new business was up 17% versus last year. GTS quota-bearing headcount increased by over 80 salespeople sequentially to 3,072.
We are seeing the positive effects of our investments to ramp up recruiting capacity combined with moderating attrition. We continue to be successful recruiting new salespeople. We expect to see ongoing expansion of the GTS sales team into 2022 and beyond. For 2022, we are planning to grow GTS headcount at double-digit rates. Our regular full set of GTS metrics can be found in the appendix of our earnings supplement. Global business sales contract value was $874 million at the end of the fourth quarter, up 24% year-over-year, which is above the high end of our medium-term outlook of 12% to 16%.
GBS CV increased $61 million from the third quarter. While retention for GBS was 115% for the quarter, up about 14% points year-over-year. GBS new business was up 16% compared to last year reflecting strong growth across the full portfolio. GBS quota-bearing headcount increased sequentially and is up 10% year-over-year. For 2022, we are planning to increase GBS headcount at a double-digit growth rate. As with GTS, our regular full set of GBS metrics can be found in the appendix of our earnings supplement.
Conferences revenue for the fourth quarter was $107 million with reported growth of 15% and 16% FX-neutral. Contribution margin in the quarter was 61%. You'll recall that in 2020, we ran almost all of our conferences in the fourth quarter while in 2021 our conferences took place throughout the year. This plus in-person conference cancellation costs recorded in the quarter resulted in a lower contribution margin year over year. We held 13 virtual conferences in the quarter. We held over 140 Evanta meetings with a mix of both virtual and in-person experiences.
For the full year 2021, revenue increased 78%, both on a reported and FX-neutral basis. Gross contribution margin was 62% up more than 14% points from 2020. During 2021, we incurred costs, which would have allowed us to run in-person destination conferences had pandemic conditions permitted. Fourth-quarter consulting revenues increased by 26% year-over-year to $118 million. On an FX-neutral basis, revenues were up 27%. Consulting contribution margin was 39% in the fourth quarter, up more than 12% points versus the prior-year quarter with strong revenue and the mix benefit from contract optimization.
Labor-based revenues were $87 million, up 19% versus Q4 of last year and up 21% on an FX-neutral basis. Backlog at December 31 was $117 million increasing 13% year-over-year on an FX-neutral basis after another strong bookings quarter. Our contract optimization business was up 44% on both a reported and FX-neutral basis versus the prior year. As we have detailed in the past, this part of the consulting segment is highly variable. Full-year consulting revenue was up 11% on a reported basis and 9% on an FX-neutral basis.
Gross contribution margin of 38% was up over 700 basis points from 2020. Consolidated cost of services increased 14% year-over-year in the fourth quarter, both on a reported and FX-neutral basis. The increase was in part due to higher compensation costs and conference expenses. SG&A increased 27% year-over-year in the fourth quarter on a reported and FX-neutral basis. SG&A increased in the quarter as a result of a $50 million non-recurring real estate charge, higher variable compensation resulting from strong sales and overall business performance, increased hiring across the company, and conference cancellation costs.
SG&A without the facilities-related charge would have increased 17% year-over-year and would have been 47% of revenue in the quarter. We expect SG&A expenses to increase over time as our hiring across the business continues to ramp. The real estate charge was a result of our decision to reduce our real estate footprint as we shift to a virtual first workplace strategy. We expect about $20 million of annual benefit beginning in 2022 as a result of the charge. Non-recurring, non-cash charge is excluded from EBITDA. We continue to evaluate our real estate portfolio, which may result in additional charges in the future.
For the full year, cost of services increased 7% on a reported basis and 6% on an FX-neutral basis. SG&A increased 6% on a reported basis and 4% on an FX-neutral basis in 2021. EBITDA for the fourth quarter was $307 million, up 25% year-over-year on a reported basis and up 26% FX-neutral. EBITDA for the full year was $1.29 billion, a 57% increase over 2020 on a reported basis and up 54% FX-neutral. Depreciation in the quarter was about flat versus 2020. Net interest expense, excluding deferred financing costs in the quarter was $30 million up $5 million versus the fourth quarter of 2020 due to an increase in total debt balances.
The Q4 adjusted tax rate which we used for the calculation of adjusted net income was negative 8.3% for the quarter and included a benefit from the intercompany sale of intellectual property. The tax rate for the items used to adjust net income was 24.1% for the quarter. The adjusted tax rate for the full year was 18.1%. Adjusted EPS in Q4 was $2.99. This excludes the non-recurring real estate charge. For the full-year adjusted EPS was $9.22. EPS growth for the year was 89%. The weighted average fully diluted share count for the fourth quarter was 83.8 million.
Operating cash flow for the quarter was $235 million down 10% compared to last year's quarter, which was very strong. On a year-over-year basis, the timing of cash taxes had a sizable impact. Cash flow in the quarter includes $17 million of insurance proceeds from 2020 event cancellations. Capex for the quarter was $21 million, down 8% year-over-year. Lower capex is largely a function of lower real estate investments. Free cash flow for the quarter was $214 million. Free cash flow growth continues to be an important part of our business model with modest capex needs and upfront client payments.
Free cash flow as a percent of revenue or free cash flow margin was 23% on a rolling four-quarter basis, adjusted for the $167 million of insurance proceeds received during the year. Free cash flow was well in excess of both GAAP and adjusted net income. At the end of the fourth quarter, we had $756 million of cash. Our December 31 debt balance was $2.5 billion. Our reported gross debt to trailing 12 month EBITDA was under 2 times. Our expected free cash flow generation 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.
We repurchased around $1.7 billion in stock during 2021, including about $200 million in the fourth quarter. We repurchased over 7 million shares, reducing our net share count by around 7%. Earlier this month the Board again increased our share repurchase authorization. We now have around $1 billion available. As we continue to repurchase shares we expect our capital base will shrink. This is accretive to earnings per share and combined with growing profits also delivers increasing returns on invested capital over time.
Before providing the 2022 guidance details, I want to discuss our base level assumptions and planning philosophy for 2022. For Research, we continue to innovate and provide a very compelling value proposition for clients and prospects. Executives and their teams face uncertainty and challenges. They recognize how Gartner can help. We have demand in good times and bad. Our 2021 performance benefited from several factors including GBH, tenure mix and NCVI phasing within the quarters and year, record retention rates, and strong non-subscription growth.
We're not assuming all of those persist at the same levels through 2022. We've taken a balanced approach based on historical trends and patterns, which we've reflected in the guidance. If NCVI phasing retention rates and non-subscription growth perform closer to the way they did in 2021 there would be an upside to our guidance. In addition, our teams are focused on driving growth faster than what's embedded in the guidance. For conferences, we are basing our guidance on being 100% virtual for destination conferences for the full year.
Destination conferences involve travel often international and overnight stays for our clients, which can be affected by pandemic conditions and rules. As with 2021, we are operationally planning to relaunch in-person destination conferences when conditions permit. For our local one day Evanta events, we expect to run most of them in person, while continuing to run some virtually. As a reminder, we had about $10 million of extra revenue in the first quarter of 2021 related to extending the period for 2020 conference ticket use.
In addition, a smaller portion of research contracts will be attributed to the conferences segment in 2022. Adjusted for these two items conferences revenues would be increasing by about 10%. For consulting revenues, we have more visibility into the first half based on the composition of our backlog and pipeline as usual. Contract optimization is seasonally slower in the first quarter and remains highly variable. Our base-level assumptions for consolidated expenses reflect significant headcount increases during the year to support current and future growth.
We have modeled higher labor costs and T&E well above 2021 levels as we previously indicated. We will also have higher commissions cost during 2022 as a result of the very strong selling performance we delivered in 2021. Finally, we continue to invest in our tech with client-facing and internal applications as part of our innovation and continuous improvement programs. Our guidance for 2022 is as follows. We expect research revenue of at least $4.55 billion, which is a reported growth of at least 11% and FX-neutral growth of at least 12%.
We expect conferences revenue of at least $200 million, which is down about 7%, but up about 10% adjusted for the items I mentioned earlier. We expect consulting revenue of at least $425 million, which is up 2% reported and 3% FX-neutral. The result is an outlook for consolidated revenue of at least $5.175 billion, which is reported growth of at least 9% and FX-neutral growth of 11%. Based on current foreign exchange rates and business mix the consolidated growth includes an FX headwind of about 150 basis points.
We expect full-year EBITDA of at least $1.035 billion, which is a decline of about 20% based on our revenue and EBITDA guidance we expect margins of 20% this is based on conferences running virtual-only and also includes an FX headwind of about 150 basis points. We expect our full-year 2022 adjusted net interest expense to be $150 million. We expect an adjusted tax rate of around 22% for 2022. As a reminder, the tax rate can fluctuate from quarter to quarter.
Our EPS guidance is based on 83 million weighted average shares outstanding, which reflects repurchases to offset dilution of equity award issuances. We expect 2022 adjusted EPS of at least $6.74. For 2022, we expect free cash flow of at least $850 million. It's also important to note that we have revalued our contract value at current year FX rates, which had a modest overall impact. Our 2021 ending contract value at 2022 FX rates is $3.3 billion for GTS and $865 million for GBS. Details are included in the appendix of the earnings supplement. All the details of our full year guidance are included on our Investor Relations site.
Finally, we expect to deliver at least $285 million of EBITDA in Q1 of 2022. We had a strong year with momentum across the business. Contract value growth accelerated and we had a very strong EBITDA, revenue and free cash flow. We've been increasing hiring across the business to drive future growth. We've put our capital to work repurchasing almost $1.7 billion worth of our stock this past year. Looking out over the medium term our financial model and expectations are unchanged. With 12% to 16% research CV growth, we will deliver double-digit revenue growth.
With gross margin expansion, sales cost growing in line with CV growth over time and G&A leverage we can modestly expand margins from a normalized 2021 level. 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. Operator?
