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The company’s adjusted earnings per share of $2.5 beat the Zacks Consensus Estimate by 2% but decreased 2.3% from the year-ago quarter. Revenues of $1.5 billion beat the consensus estimate marginally and improved 5.4% year over year.
The IT stock has gained 15.7% over the six months, outperforming the 9.3% rally of the industry it belongs to and 11.3% growth of the Zacks S&P 500 Composite.
Six Months Price Performance
Image Source: Zacks Investment Research
Gartner’s Revenues by Segments
Revenues in the Research segment were $1.3 billion, which grew 5.1% from the year-ago quarter on a reported basis and 5.4% on a foreign-currency-neutral basis. The gross contribution margin was 73.7%, which amounted to a gross contribution of $943 million in the third quarter of 2024.
Conferences’ revenues were $76 million, which increased 32.5% year over year on a reported basis and 30.5% on a foreign-currency-neutral basis. The gross contribution margin was 40.2%, which logged a gross contribution of $30 million.
Revenues in the Consulting segment amounted to $128 million, which decreased 3.9% from the year-ago quarter on a reported basis and 3.7% on a foreign-currency-neutral basis. The gross contribution margin was 32.5% in the reported quarter, which amounted to a gross contribution of $42 million.
Gartner’s Operating Performance
Adjusted EBITDA of $340 million increased 2.1% from the year-ago quarter on a reported basis and 2.8% on a foreign-currency-neutral basis.
Balance Sheet & Cash Flow of IT
Gartner had $1.8 billion in cash and cash equivalents at the end of the quarter compared with $1.2 billion at the end of the preceding quarter. The long-term debt was $2.5 billion, flat with the second quarter of 2024.
The operating cash flow totaled $591 million and the free cash flow utilized was $565 million in the reported quarter. Capital expenditure totaled $26 million.
Gartner’s 2024 Outlook
For 2024, total revenues are expected to be at least $6.23 billion. The Zacks Consensus Estimate is in line with the company’s guidance.
IT raised the guidance for adjusted earnings per share to at least $11.75 compared with the $11.05 provided in the preceding quarter. The consensus estimate for earnings is pegged at $11.65 per share, which is lower than the company’s revised guidance. The adjusted EBITDA guidance is raised to at least $1.52 billion from the $1.46 billion given in the previous quarter. The free cash flow guidance is raised to at least $1.35 billion from the $1.08 billion provided in the preceding quarter.
RSG’s earnings per share (excluding 1 cent from non-recurring items) of $1.8 outpaced the Zacks Consensus Estimate by 11.7% and grew 17.5% from the year-ago quarter. Revenues of $4.1 billion missed the consensus mark by a slight margin but increased 6.5% on a year-over-year basis.
TRU’s quarterly adjusted earnings (adjusting 69 cents from non-recurring items) of $1 per share surpassed the consensus mark by 2% and increased 14.3% on a year-over-year basis. Total revenues of $1.1 billion outpaced the consensus mark by 2.2% and increased 12% from the year-ago quarter.
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Gartner Earnings Surpass Estimates in Q3, Revenues Increase Y/Y
Gartner, Inc. (IT - Free Report) has reported better-than-expected third-quarter 2024 results.
See Zacks Earnings Calendar to stay ahead of market-making news.
The company’s adjusted earnings per share of $2.5 beat the Zacks Consensus Estimate by 2% but decreased 2.3% from the year-ago quarter. Revenues of $1.5 billion beat the consensus estimate marginally and improved 5.4% year over year.
The IT stock has gained 15.7% over the six months, outperforming the 9.3% rally of the industry it belongs to and 11.3% growth of the Zacks S&P 500 Composite.
Six Months Price Performance
Gartner’s Revenues by Segments
Revenues in the Research segment were $1.3 billion, which grew 5.1% from the year-ago quarter on a reported basis and 5.4% on a foreign-currency-neutral basis. The gross contribution margin was 73.7%, which amounted to a gross contribution of $943 million in the third quarter of 2024.
Conferences’ revenues were $76 million, which increased 32.5% year over year on a reported basis and 30.5% on a foreign-currency-neutral basis. The gross contribution margin was 40.2%, which logged a gross contribution of $30 million.
Revenues in the Consulting segment amounted to $128 million, which decreased 3.9% from the year-ago quarter on a reported basis and 3.7% on a foreign-currency-neutral basis. The gross contribution margin was 32.5% in the reported quarter, which amounted to a gross contribution of $42 million.
Gartner’s Operating Performance
Adjusted EBITDA of $340 million increased 2.1% from the year-ago quarter on a reported basis and 2.8% on a foreign-currency-neutral basis.
Balance Sheet & Cash Flow of IT
Gartner had $1.8 billion in cash and cash equivalents at the end of the quarter compared with $1.2 billion at the end of the preceding quarter. The long-term debt was $2.5 billion, flat with the second quarter of 2024.
The operating cash flow totaled $591 million and the free cash flow utilized was $565 million in the reported quarter. Capital expenditure totaled $26 million.
Gartner’s 2024 Outlook
For 2024, total revenues are expected to be at least $6.23 billion. The Zacks Consensus Estimate is in line with the company’s guidance.
IT raised the guidance for adjusted earnings per share to at least $11.75 compared with the $11.05 provided in the preceding quarter. The consensus estimate for earnings is pegged at $11.65 per share, which is lower than the company’s revised guidance. The adjusted EBITDA guidance is raised to at least $1.52 billion from the $1.46 billion given in the previous quarter. The free cash flow guidance is raised to at least $1.35 billion from the $1.08 billion provided in the preceding quarter.
Currently, Gartner carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Snapshot of IT’s Peers
Republic Services, Inc. (RSG - Free Report) reported mixed third-quarter 2024 results.
RSG’s earnings per share (excluding 1 cent from non-recurring items) of $1.8 outpaced the Zacks Consensus Estimate by 11.7% and grew 17.5% from the year-ago quarter. Revenues of $4.1 billion missed the consensus mark by a slight margin but increased 6.5% on a year-over-year basis.
TransUnion (TRU - Free Report) posted impressive third-quarter 2024 results.
TRU’s quarterly adjusted earnings (adjusting 69 cents from non-recurring items) of $1 per share surpassed the consensus mark by 2% and increased 14.3% on a year-over-year basis. Total revenues of $1.1 billion outpaced the consensus mark by 2.2% and increased 12% from the year-ago quarter.