Gartner NYSE: IT reported first-quarter 2026 results that topped the company’s expectations for Insights revenue, adjusted EBITDA, adjusted earnings per share and free cash flow, while management said client decision-making slowed in March amid changes in the geopolitical environment.
Chairman and Chief Executive Officer Gene Hall said new business with enterprise leaders was strong during the first two months of the quarter before slowing somewhat in March. Still, Hall said year-over-year contract value growth accelerated in the quarter, and Chief Financial Officer Craig Safian said several transactions delayed in March closed in April.
“By and large, clients and prospects told us, ‘We still want to buy from you, but we can’t make a decision today,’” Hall said during the question-and-answer portion of the call. “As we roll to April, we’re seeing many of those deals actually close.”
First-quarter revenue rises as free cash flow jumps
Safian said first-quarter revenue was $1.5 billion, up 2% year-over-year as reported and down 1% on an FX-neutral basis. Adjusted EBITDA was $395 million, up 6% as reported and 1% FX neutral. Adjusted EPS was $3.32, up 11% from the year-ago quarter.
Free cash flow was $371 million, up 29% year-over-year, while rolling four-quarter free cash flow totaled $1.3 billion. Safian said rolling four-quarter return on invested capital was about 27%.
Insights revenue grew 3% as reported and was approximately flat on an FX-neutral basis. The segment’s contribution margin was 78%, up about 120 basis points from last year. Conferences revenue was $78 million, with same-conference revenue growth of about 9% FX neutral. Consulting revenue declined to $119 million from $140 million in the year-ago period, with a 31% contribution margin.
Contract value improves but remains pressured by U.S. federal business
Gartner ended the quarter with contract value of $5.3 billion, up 1% from the prior year and an acceleration from year-end. Excluding the U.S. federal government, contract value grew 3.5%. Safian said Gartner had approximately $114 million of U.S. federal contract value as of March 31.
Safian said the U.S. federal business remained the most significant headwind to contract value growth, representing a roughly 250-basis-point drag in the quarter. He said the company began feeling the impact of changes in federal spending activity in March of last year and expects to begin lapping the more significant challenges in the second quarter.
Global Technology Sales contract value was $4 billion at quarter-end, up from the prior year. Excluding federal government business, contract value for both enterprise leaders and technology vendors increased by more than 3%. Wallet retention for Global Technology Sales was 97%, or 99% excluding federal.
Global Business Sales contract value was $1.3 billion, up 3% year-over-year, or 5% excluding federal. Growth was led by the sales, supply chain and legal practices. Wallet retention for Global Business Sales was 98%.
Safian said first-quarter new business totaled more than $200 million. Global Technology Sales new business declined 4% year-over-year, or about 3% excluding federal. Global Business Sales new business declined 2%.
Management raises profit and cash flow outlook
Gartner raised its full-year outlook for adjusted EBITDA, adjusted EPS and free cash flow. The company now expects 2026 revenue of at least $6.405 billion, representing 1% FX-neutral growth. Safian said the revenue outlook was “operationally unchanged,” with an increase related to foreign exchange.
The company now expects adjusted EBITDA of at least $1.545 billion, up $30 million from its prior forecast, with margins of at least 24.1%. Gartner expects adjusted EPS of at least $13.25, reflecting higher EBITDA expectations and a lower share count. Free cash flow is expected to be at least $1.16 billion, with conversion from GAAP net income of 137%.
For the second quarter, Gartner expects adjusted EBITDA of at least $425 million.
Safian said the company’s guidance is based on 69 million fully diluted weighted average shares outstanding, incorporating repurchases through the end of the first quarter. Gartner exited the quarter with about 68 million fully diluted shares.
Buybacks remain a key use of cash
Gartner repurchased $535 million of stock in the first quarter, reducing its share count by more than 4%. Safian said the company ended the quarter with about $1.7 billion of cash, including approximately $500 million to run the business and about $1.2 billion available to deploy on behalf of shareholders. Debt was about $3 billion, with reported gross debt to trailing 12-month EBITDA below 2x.
Safian said Gartner’s board increased the company’s buyback authorization to about $1.2 billion last week and is expected to refresh the amount as needed. He said Gartner also plans to use capital for “strategic value-enhancing tuck-in M&A.”
Management reiterated an expectation to deliver adjusted EPS growth on a compound annual basis above 12% over the next three years. In response to an analyst question, Safian clarified that the base year for that target is 2025. He said the drivers include accelerating contract value growth, revenue growth, margin expansion and continued share repurchases.
AI, engagement and pricing discussed on call
Hall emphasized Gartner’s role in advising executives on “mission-critical priorities,” including artificial intelligence. He said AI remains one of the most requested topics across the roles Gartner serves, including CIOs, business leaders and technology providers.
Hall also highlighted changes to Gartner’s Business and Technology Insights organization, saying the company increased the number of “high-impact documents” by 22%, expanded the number of documents in its insights library by 19% and more than doubled the number of same-day insights published in response to major events.
The company said engagement continued to improve. Safian said overall engagement in the first quarter rose more than 170 basis points from the prior-year quarter, digital engagement improved more than 160 basis points and human interactions increased more than 80 basis points through greater usage of analyst inquiries.
Asked about AskGartner, Hall said client usage and repeat usage continue to increase. He said Gartner releases updates every two weeks and has added support for 25 languages and the ability to create downloadable PowerPoint presentations directly within AskGartner.
On pricing, Hall said Gartner continues to discuss pricing with clients and believes pricing is appropriate. Safian said there has been no change in the company’s discounting approach. “We do not offer discounts,” Safian said, adding that Gartner’s normal annual price increase went into effect Nov. 1 of last year.
Hall closed the call by saying Gartner expects contract value to accelerate through the rest of the year and that the company will continue to generate strong free cash flow for shareholder value creation.
About Gartner NYSE: IT
Gartner, Inc is a global research and advisory firm that provides insights, advice and tools for leaders in IT, finance, HR, customer service and other business functions. Founded in 1979 and headquartered in Stamford, Connecticut, Gartner specializes in helping organizations make informed decisions about technology, operations and strategy through a combination of published research, advisory services, consulting, executive programs and events.
The company's offerings include proprietary research reports, market forecasts, and analytical frameworks that are widely used by technology buyers and vendors.
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