Q2 2024 Gartner Inc Earnings Call

Good morning, everyone. Welcome to Gartner's second quarter 2024 earnings call. I'm David Cohen, SVP of Investor Relations.

David Cohen: 24 Earnings Call. I'm David Cohen, SVP of Investor Relations. At this time, all participants are in a listen-only mode.

David Cohen: 34 earnings call, and David Cohen, SVP of Invest Relations.

Operator: At this time, all participants are in a listen-only mode. After comments by Gene Hall, Gartner's chairman and chief executive officer, and Craig Safian, Gartner's chief financial officer, there will be a question-and-answer session.

David Cohen: After comments by Gene Hall, Gartner's Chairman and 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, as 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. All contract values and associated growth rates we discussed are based on the 2024 foreign exchange rate. All growth rates and genes comments are FX neutral unless stated otherwise.

Speaker Change: At this time, all participants are in a listen-only mode. After comments by Gene Hall, Gartner's Chairman and 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.

Operator: 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 earning supplement, both posted to our website, investor.gartner.com. On the call, unless stated otherwise, all references to EBITDA are for adjusted EBITDA, but the adjustments are described in the earnings release and supplement. All contract values and associated growth rates we discuss are based on 2024 foreign exchange rates. All growth rates in Gene's comments are effects neutral unless stated otherwise. All references to share counts are for fully diluted weighted average share counts unless stated otherwise.

Speaker Change: This call will include a discussion of second quarter 2024 financial results and Gartner's outlook for 2024 as disclosed in today's earnings release and earnings supplement, both posted to our website, investor.gartner.com.

Speaker Change: 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. All contract values and associated growth rates we discuss are based on 2024 foreign exchange rates.

Speaker Change: All growth rates and genes comments are FX-neutral, unless stated otherwise. All references to share counts are for fully dilated weighted average share counts, unless stated otherwise.

Operator: Reconciliation for non-GAAP numbers we use are available in the Investor Relations section, the Gartner.com website.

Speaker Change: Reconciliations for all non-GAAP numbers we use are available in the Investor Relations section of the Gartner.com website.

Operator: The set forth and more detailed today's earnings release, certain statements made on this call may cost you 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 court of the 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.

Speaker Change: As set forth in more detail in today's earnings release, certain statements made on this call may constitute forward-looking statements.

Speaker Change: 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 other filings with the SEC.

Eugene Hall: Now, I'll 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, and that results for a second quarter were ahead of expectations, and we delivered strong profitability and free cash flow. The external environment remains volatile and certain, 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 change shifts are impacting many industries. The banking industry continues to deal with higher interest rates.

David Cohen: All references to share counts are for fully dilated 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. Such 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 other filings with the SEC. I encourage all of you to review the risk factors listed in these documents. Now, I'll turn the call over to Gartner Chairman and Chief Executive Officer, Gene Hall. Good morning, and thanks for joining us today.

Eugene A. Hall: I encourage all of you to review the risk factors listed in these documents. Now, I'll turn the call over to Gartner's Chairman and Chief Executive Officer, Gene Hall.

Eugene A. Hall: Gartner remains resilient in a complex environment. In Q2, contract value grew at a high single-digit rate. Managed 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.

Eugene A. Hall: Good morning, and thanks for joining us today.

Eugene A. Hall: Gartner remains resilient in a complex environment. In Q2, contract value grew high single digits.

Speaker Change: Management results for the second quarter were ahead of expectations.

Speaker Change: And we delivered strong profitability and free cash flow.

Speaker Change: The external environment remains volatile, uncertain, complex, and ambiguous.

Eugene A. Hall: Leaders across every enterprise face 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 cybersecurity threats. The Potential Impacts of Generative AI, The list goes on.

Speaker Change: Leaders across every enterprise face more simultaneous challenges than ever before.

Speaker Change: For example, small technology companies continue to face funding challenges.

Speaker Change: Supply chain shifts are impacting many industries.

Eugene Hall: There are budget challenges in the public sector. Persistent cybersecurity threats. 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 major enterprise functions in every industry and in every geography.

Speaker Change: The banking industry continues to deal with higher interest rates.

Speaker Change: There are budget challenges in the public sector.

Speaker Change: Persistent Cybersecurity Threats

Eugene A. Hall: 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.

Speaker Change: The Potential Impacts of Generative AI The list goes on...

Speaker Change: 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.

Speaker Change: Our value proposition helps our clients save time, save money, gain confidence, manage risk, develop leadership skills, enhance their teams, and achieve success.

Eugene A. Hall: Research continues to be our largest and most profitable segment. Our research business serves leaders across all major 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 TechVendor clients returned to growth. We continue to guide clients through a wide range of topics, including generative AI and Supply Chain Optimization. Leader and Manager Development, Cost optimization, cybersecurity, and the recent CrowdStrike outage.

Speaker Change: Research continues to be our largest and most profitable segment.

Speaker Change: Our research business serves leaders across all major enterprise functions, in every industry and in every geography.

Eugene Hall: Our market opportunity is fast. West. 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, cyber security, and the recent crud strike outage. Through a relentless execution of proven practices, we deliver unparalleled value, whether our clients are thriving, struggling, or anywhere in between. Our research business are as executives and their teams to our distinct sales channels. Global Technology Sales, or GTS, serves leaders in their teams within IT.

Speaker Change: Our market opportunity is vast.

Speaker Change: Within our research business, contract value with enterprise function leaders grew 10% and our tech vendor clients returned to growth.

Speaker Change: We continue to guide clients through a wide range of topics, including generative AI, supply chain optimization,

Speaker Change: Leader and Manager Development

Speaker Change: Cost Optimization, Cybersecurity, and the recent CrowdStrike outage.

Eugene A. Hall: Through relentless execution of proven practices, we deliver unparalleled value, whether our clients are thriving, struggling, or anywhere in between. Our research business serves executives and their teams through a distinct sales channel. Global Technology Sales, or GTS, serves leaders and their teams within IT.

Speaker Change: Through relentless execution of proven practices, we deliver unparalleled value, whether our clients are thriving, struggling, or anywhere in between.

Speaker Change: Our research business serves executives and their teams through distinct sales channels.

Eugene A. Hall: GTS new business grew 8%, and 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, marketing, legal, sales, and more. GVS new business grew 16%, and GBS contract value grew 12%.

Speaker Change: Global Technology Sales, or GTS, serves leaders and their teams within IT.

Eugene Hall: GTS new business grew 8%; contract value grew 6%; contract value with GTS enterprise function leaders grew high single digits. Global business sales for GBS serves leaders in their teams beyond IT. This includes HR, supply chain, finance, marketing, 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 client's execute their most strategic initiatives for deeper project-based work. Consulting is an important complement to our IT research business.

Speaker Change: GTS new business grew 8%. Contract value grew 6%.

Speaker Change: Contract value with GTS Enterprise Function Leaders grew high single digits.

Speaker Change: Global Business Sales, or GBS, serves leaders and their teams beyond IT.

Speaker Change: This includes HR, supply chain, finance, marketing, legal, sales, and more.

Speaker Change: GBS new business grew 16%. GBS contract value grew 12%.

Eugene A. Hall: 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.

Speaker Change: Gartner Conferences deliver extraordinarily valuable insights to an engaged and qualified audience.

Speaker Change: Revenue grew 11% in the second quarter, and the outlook for conferences remains strong.

Speaker Change: Gartner Consulting is an extension of Gartner Research. Consulting helps clients execute their most strategic initiatives through deeper project-based work.

Eugene A. Hall: Consulting is an important complement to our IT research business. Consulting revenue grew by 15 percent. People are at the heart of everything we do.

Eugene Hall: Consulting revenue grew 15%. People are 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. And our teams are committed to driving relentless execution of the best practices that will fuel long-term, sustained, double-digit growth.

Speaker Change: Consulting is an important complement to our IT research business. Consulting revenue grew 15%.

Eugene A. Hall: We get better, faster, stronger every year because we work effectively as one team to deliver unparalleled value to our clients. And our teams are committed to driving relentless execution of best practices that will fuel long-term sustained double-digit growth. In closing, Gartner delivered financial results ahead of expectations.

Speaker Change: 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.

Speaker Change: And our teams are committed to driving relentless execution of the best practices that will fuel long-term, sustained, double-digit growth.

Eugene Hall: 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 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 to our share reproaches program. We expect to deliver modest margin expansion over time, and we'll continue to generate significant free cash flow, well in excess of debt income. All of this and more positions us to continue our sustained track record of success far into the future.

Eugene A. Hall: We deliver 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 will continue to generate significant free cash flow, well in excess of that income.

Speaker Change: In closing, Gartner delivered financial results ahead of expectations.

Speaker Change: We deliver 10% contract value growth with enterprise function leaders.

Speaker Change: Our client value proposition and addressable market opportunity will allow us to drive long-term, sustained, double-digit revenue growth.

Speaker Change: We'll continue to create value for our shareholders by providing actionable, objective insight to our clients.

Speaker Change: Prudently investing for future growth.

Speaker Change: and returning capital to our shareholders through our share repurchase program.

Speaker Change: We expect to deliver modest margin expansion over time.

Speaker Change: and will continue to generate significant free cash flow well in excess of net income.

Eugene A. Hall: 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.

Speaker Change: All of this and more positions us to continue our sustained track record of success far into the future.

Craig Safian: With that, I'll hand the call over to our Chief Financial Officer, Craig Safien. Thank you, Gene, and good morning. Second quarter contract value grew 7% year by 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 ETS all came in ahead of our expectations.

Speaker Change: With that, I'll hand the call over to our Chief Financial Officer, Craig Safian.

Craig W. Safian: 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 percent.

Craig W. Safian: Thank you, Gene, and good morning.

Craig W. Safian: Second quarter contract value grew 7% year-over-year, accelerating about 50 basis points from Q1.

Craig W. Safian: We believe the first quarter marked the bottom for CV growth this cycle, barring a meaningful shift in the macro or geopolitical environment.

Speaker Change: 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%.

Craig W. Safian: Second quarter revenue, EBITDA, and EPS all came in ahead of our expectations. We are updating our guidance based on the Q2 results, effects, 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.

Craig Safian: We are updating our guidance based on acute results, effects, 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 of year is reported and 7% effects neutral. In addition, total contribution margin was 68%, about inline with last year. EBITDA was $416 million, up 8% as reported and 10% effects 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 of year of year reported and 6% on an effects neutral basis.

Speaker Change: Second quarter revenue, EBITDA, and EPS all came in ahead of our expectations.

Speaker Change: 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.

Craig W. Safian: 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.

Speaker Change: Second quarter revenue was $1.6 billion, up 6% year-over-year as reported and 7% FX neutral.

Speaker Change: 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.

Speaker Change: Adjusted EPS was $3.22, up 13% from Q2 of last year. And free cash flow was $341 million.

Speaker Change: 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.

Craig W. Safian: 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.

Craig Safian: Subscription revenue grew 7% effects 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 RFX 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.

Speaker Change: Second quarter research contribution margin was 74%, consistent with last year.

Speaker Change: 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.

Craig W. Safian: CV from Enterprise Function Leaders across GTS and GBS, Route 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 at double-digit or high single-digit rates across all enterprise sizes except small, which has the largest tech vendor mix.

Speaker Change: CV from enterprise function leaders across GTS and GBS grew 10%. Contract value and CV growth are FX neutral.

Speaker Change: 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.

Craig Safian: CV grew double-digit or high single-digit rates across all enterprise sizes, except small, which has the largest tech fender 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 Wheaters 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, while retention was consistent with historical levels.

Speaker Change: CV grew double-digit or high single-digit rates across all enterprise sizes except small, which has the largest tech-vendor mix.

Craig W. Safian: 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 Weider CV increased high single-digit.

Speaker Change: We also drove double-digit or high single-digit growth in the majority of our top 10 countries.

Speaker Change: 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.

Craig W. Safian: Tech Vendor CV returned to growth in the quarter. GTSCV 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.

Speaker Change: TechVendorCV returned to growth in the quarter. GTSCV increased $40 million from the first quarter.

Speaker Change: Wall retention for GTS was 101% for the quarter up from Q1. Enterprise leader wall retention was consistent with historical levels.

Craig Safian: GTS new business was up 8% compared to last year. GTS quota bearing headcount was down 2% year-to-year as we managed tech vendor-focused sales territories in response to near-term industry dynamics.

Craig W. Safian: GTS new business was up 8% compared to last year, but GTS quota-bearing headcount was down 2% year-over-year as we managed 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 our commitments for this year. Our regular full set of GTS metrics can be found in our earnings supplement.

Speaker Change: GTS New Business was up 8% compared to last year.

Speaker Change: GTS quota bearing headcount was down 2% year-over-year as we managed tech vendor focused sales territories in response to near-term industry dynamics.

Craig Safian: Maxx. 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 head count we need to meet our commitment 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 of year. All of our GBS practices grew at double-digit or high single-digit rates, other than marketing, which grew mid-single digits.

Speaker Change: 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 our commitments for this year.

Speaker Change: Our regular, full set of GTS metrics can be found in our earnings supplement.

Craig W. Safian: 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-digit. Growth was led by the finance, legal, and supply chain practices. PBS TV increased $27 million from the first quarter.

Speaker Change: 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.

Craig Safian: Growth was led by the finance, legal, and supply chain practices. GBS CV increased $27 million from the first quarter. While 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 Quaterbearing headcount was up 6% year over year, and we continue to target high single digit growth for 2024. As with GTS, our regular full set of GBS metrics can be found in our earnings supplement. Conferences revenue for the second quarter was $186 million, increasing 10% of reported and 11% FX neutral compared to Q2 of 2023.

Speaker Change: Growth was led by the finance, legal, and supply chain practices. GBSCV increased $27 million from the first quarter.

Craig W. Safian: 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. DBS quota-bearing headcount was up 6% year-over-year, and we continue to target high single-digit growth for 2024. As with TTS, our regular full set of TBS metrics can be found in our earnings supplement.

Speaker Change: Wallet retention for GBS was 106% for the quarter, which compares to 109% in the prior year.

Speaker Change: 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, our regular full set of GBS metrics can be found in our earnings supplement.

Craig W. Safian: Conference 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.

Speaker Change: 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.

Craig Safian: 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, of 3% versus Q2 of last year as 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.

Speaker Change: Contribution margin was 58%. Q2 is our seasonally strongest margin quarter of the year. We held 16 destination conferences.

Craig W. Safian: 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, a 3% versus Q2 of last year as reported, and 5% on an FX mutual basis. Backlog at June 30th was $199 million, increasing 16% year-over-year on an FX-neutral basis with continued booking strength.

Speaker Change: 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.

Speaker Change: Labor-based revenue was $107 million, of 3% versus Q2 of last year as reported, and 5% on an FX-neutral basis.

Speaker Change: Backlog at June 30th was $199 million, increasing 16% year-over-year on an FX-neutral basis with continued booking strength.

Craig Safian: In contract optimization, we delivered $36 million of revenue in the quarter of 62% versus the prior year. Our contract optimization business is highly valuable. Consolidated cost of services increased 5% year over year in the second quarter was reported and 6% on an FX neutral basis. The biggest driver of the increase was higher compensation costs. SGNA increased 5% year over year in the second quarter, as reported and on an FX neutral basis. SGNA 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 as reported and up 10% FX neutral.

Craig W. Safian: In contract optimization, we delivered $36 million of revenue in the quarter, up 62% versus the prior year. However, our contract optimization business is highly volatile. 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.

Speaker Change: 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.

Speaker Change: 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.

Speaker Change: 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.

Craig W. Safian: 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 outperformed in the second quarter through effective expense management and a prudent approach to guidance. Depreciation for the quarter of $28 million was up 16% compared to 2023. Net interest expense, excluding deferred financing costs in the quarter, was $19 million.

Speaker Change: EBITDA for the second quarter was $416 million, up 8% from last year's reported, and up 10% FX neutral. We outperformed in the second quarter through effective expense management and a prudent approach to guidance.

Craig Safian: We outperformed in the second quarter through effective expense management and approved an 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 heads through the third quarter of 2025. The Q2 adjusted tax rate, which we used for the calculation of adjusted net income, was 24% for the quarter. The tax rate for the items used to adjust that income was 25% for the quarter.

Speaker Change: Depreciation in the quarter of $28 million was up 16% compared to 2023.

Craig W. Safian: 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 used for the calculation of adjusted net income, was 24% for the quarter.

Speaker Change: 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 debt we have is fully hedged through the third quarter of 2025.

Speaker Change: The Q2 adjusted tax rate, which we used for the calculation of adjusted net income, was 24% for the quarter. The tax rate for the items used to adjust that income was 25% for the quarter.

Craig W. Safian: The tax rate for the items used to adjust that 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, which 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.

Craig Safian: Adjust the DPS in Q2 was $3.22, a 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 of a 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. Precasual for the quarter was $341 million.

Speaker Change: Adjusted EPS in Q2 was $3.22, up 13% compared with last year.

Speaker Change: 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.

Craig W. Safian: 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.

Speaker Change: 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.

Speaker Change: CapEx for the quarter was $29 million, in line with our expectations.

Craig Safian: Precasual on a rolling for quarter basis was 17% of revenue and 66% of EBITDA. Precasual conversion from Gatnet income was 121%. Our precasual 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 30th debt balance was about $2.5 billion. Our reported growth debt to Treline 12-month EBITDA was under two times. Our expected free casual generation available revolver and excess cash remaining on the balance sheet provide ample liquidity to deliver on our capital allocation strategy of share purchases and strategic tuck-in M&A.

Craig W. Safian: Free cash flow on a rolling four-quarter basis was 17% of revenue and 66% of EBITDA. Precast Flow Conversion from Gartner 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.

Speaker Change: Free cash flow for the quarter was $341 million dollars. Free cash flow on a rolling four-quarter basis was 17% of revenue and 66% of EBITDA.

Speaker Change: Free cash flow conversion from Gartner Income was 121%. Our free cash flow conversion is generally higher when CV growth is accelerating.

Craig W. Safian: Our June 30th debt balance was about $2.5 billion, and our reported gross debt to trembling 12-month EBITDA was under two times. 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 purchases 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.

Speaker Change: At the end of the second quarter, we had about $1.2 billion of cash. Our June 30th debt balance was about $2.5 billion.

Speaker Change: Our reported gross stats at Trending 12-Month EBITDA was under two times.

Speaker Change: 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 purchases and strategic tuck-in M&A.

Craig Safian: 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 repurchased capacity after the board recently increased our share buyback authorization by $600 million. As we continue to repurchase shares, our capital-based will shrink. Over time, this is a creative to earnings for share and combined with growing profits also delivers increasing returns on invested capital.

Speaker Change: Our balance sheet is very strong, with $1.9 billion of liquidity, low levels of leverage, and effectively fixed interest rates.

Craig W. Safian: 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 rate.

Speaker Change: 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.

Speaker Change: 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.

Craig Safian: We are updating our full-year guidance to reflect recent performance and trends. The outlet for subscription research is higher based on the latest FX rates. We increase the outlet 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 Gardner 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.

Speaker Change: We are updating our full year guidance to reflect recent performance and trends.

Craig W. Safian: 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. Executives 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 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.

Speaker Change: The outlook for subscription research is higher based on the latest FX rates.

Speaker Change: We increase the outlook for conferences and consulting.

Speaker Change: And our EBITDA guidance primarily reflects Q2 upside, partially offset by our updated non-subscription research outlook.

Speaker Change: 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.

Speaker Change: The executives and their teams face uncertainty and challenges, and they recognize how Gartner can help regardless of the economic environment.

Speaker Change: 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.

Craig Safian: 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 US 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.

Speaker Change: For non-subscription research, which was about 6% of 2023 revenue, we helped small businesses find the right software. We've updated our outlook for this portion of the segment given the most recent trends.

Craig W. Safian: We've updated our outlook for this portion of the segment given the most recent trend. 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 U.S. dollars. 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.

Speaker Change: We now expect non-subscription revenue of about $305 million for 2024.

Speaker Change: As a reminder, about one-third of our revenue and operating expenses are denominated in currencies other than the U.S. dollar.

Speaker Change: 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.

Craig Safian: Our updated 2024 guidance is as follows. We expect research revenue of at least $5.105 billion, which is 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 dollars from our prior guidance.

Craig W. Safian: We expect research revenue of at least $5.105 billion, which is FX-neutral growth of about 5%. This reflects subscription research revenue growth of about 7%. We expect conference revenue of at least $565 million, which is FX-neutral growth of about 12%.

Speaker Change: Our updated 2024 guidance is as follows.

Speaker Change: We expect research revenue of at least $5.105 billion, which is FX-neutral growth of about 5%. This reflects subscription research revenue growth of about 7%.

Speaker Change: We expect conference's revenue of at least $565 million, which is FX-neutral growth of about 12%.

Craig W. Safian: 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 a conversion from Gap Net Income of 138%. After the second quarter ended, we reached the settlement related to the pandemic or event cancellation insurance. We expect pre-tax revenues of $300 million during the third quarter.

Speaker Change: We expect consulting revenue of at least $530 million, which is growth of about 4% FX-neutral.

Speaker Change: The result is an outlook for consolidated revenue of at least $6.2 billion, which is FX-neutral growth of 5%.

Speaker Change: We now expect full year EBITDA of at least $1.460 billion, up $5 million from our prior guidance.

Craig Safian: We expect 2024 adjusted EPS of at least $11.5. For 2024, we expect free cash flow of at least $1.08 billion, consistent with our prior guidance. This reflects the conversion from gap net income of 138%.

Speaker Change: We expect 2024 adjusted EPS of at least $11.05.

Speaker Change: For 2024, we expect free cash flow of at least $1.08 billion, consistent with our prior guidance.

Craig Safian: After the second quarter ended, we reached the settlement related to pandemic or event cancellation insurance. We expect free tax proceeds of $300 million during the third quarter. This is not yet included in the cash flow or gap EPS guidance. Our guidance is based on 78 million fully deluded 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.

Speaker Change: This reflects a conversion from Gartner Income of 138%.

Speaker Change: After the second quarter ended, we reached the settlement related to pandemic or event cancellation insurance.

Craig W. Safian: 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 for the first half have been ahead of our plan despite continuing global macro uncertainty. CV grew by high single digits in the quarter, and we believe Q1 was the bottom for CV growth in this cycle.

Speaker Change: We expect pre-tax proceeds of $300 million during the third quarter. This is not yet included in the cash flow or GAAP EPS guidance.

Speaker Change: Our guidance is based on 78 million fully diluted weighted average shares outstanding, which reflects the repurchases made through the end of June .

Speaker Change: And finally, for the third quarter, we expect adjusted EBITDA of at least $295 million.

Speaker Change: Our financial results for the first half have been ahead of our plan despite continuing global macro uncertainty.

Speaker Change: CV grew high single digits in the quarter and we believe Q1 was the bottom for CV growth in this cycle.

Craig Safian: We repurchased $565 million in stock here 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 will deliver double-digit revenue growth. With gross margin expansion, sales cost growing about in line with CV growth, and GNA 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 capital needs and the benefits of our clients paying us up front.

Craig W. Safian: We repurchased $565 million in stock here today 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.

Speaker Change: We repurchased $565 million in stock here today through June and remain eager to return excess capital to our shareholders. We will continue to be price-sensitive, opportunistic, and disciplined.

Craig W. Safian: 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 up front, and we'll continue to deploy our capital on share purchases, 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.

Speaker Change: Looking out over the medium term, our financial model and expectations are unchanged.

Speaker Change: With 12-16% research CV growth, we will deliver 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.

Speaker Change: 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 up front.

Craig Safian: And we'll continue to deploy our capital on share purchases, which will lower the share account over time and on strategic value enhancing, tuck-in M&A.

Speaker Change: And we'll continue to deploy our capital on share purchases, which will lower the share count over time, and on strategic value-enhancing token M&A. With that, I'll turn the call back over to the operator, and we'll be happy to take your questions.

Operator: Thank you. And as a reminder, if you do have a question, press star 11 to get in the queue and wait for your name to be announced. To remove yourself from the queue, press star 11 again.

Operator: With that, I'll turn the call back over to the operator, and we'll be happy to take your questions. Operator. Thank you. And as a reminder, if you do have a question, press star 111 to get in the queue and wait for your name to be announced. To remove yourself from the queue, press the star 11 again. Please come by for our first question. And he's from the line of Jeff Mueller with Beard. Please proceed. Yeah, thank you. Good morning.

Speaker Change: Operator, thank you and as a reminder if you do have a question press star 1 1 to get in the queue and wait for your name to be announced. To remove yourself from the queue press the star 1 1 again. Please stand by for our first question.

Operator: Please stand by for our first question, which is from the line of Jeff Mueller with Baird. Please proceed. Yeah, thank you. Good morning.

Jeffrey P. Meuler: When you kind of reiterated that you think you've unmarked the bottom for CV growth with the macro and geopolitical caveats, you said growth may vary quarter to quarter. I just want to, I guess, zoom in on what you're trying to signal there. Is that just a acknowledgement of, I guess, the volatile and market environment? Or are you expecting that you'll expect deceleration at some point in the near future because of a, like, a known year-over-year comp issue or anything else that you're seeing? Hey, good morning, Jeff.

Speaker Change: And as from the line of Jeff Mueller with Baird, please proceed.

Eugene Hall: When you kind of reiterated that you think you on mark the bottom for CV growth with the macro and geopolitical caveats, you said growth may vary quarter to quarter. I just want to, I guess, zoom in on what you're trying to signal there. Is that just an acknowledgment of, I guess, the volatile and market environment? Or are you expecting that you expect deceleration at some point in the near future because of a, like a known year over year, accomplish you or anything else that you're seeing. Hey, good morning, Jeff. So I'd say it's definitely more about the fact that we're operating in a very volatile operating environment and, you know, 10 with basis point up or down.

Jeffrey P. Meuler: Yeah, thank you. Good morning. When you kind of 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. I just want to...

Speaker Change: I guess, zoom in on what you're trying to signal there. Is that just a acknowledgement of, I guess, the volatile and market environment?

Speaker Change: Or are you expecting that you expect deceleration at some point in the near future because of like a known year-over-year comp issue or anything else that you're seeing?

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

Speaker Change: Hey, good morning, Jeff. So I'd say it's definitely more about

Speaker Change: The fact that we're operating in a very volatile operating environment, and a 10 basis point up or down is a relatively small amount of CD in any given quarter. I think the core message is 6.9 marks the bottom.

Eugene Hall: It's a relatively small amount of CD in any given quarter. I think, you know, the core message is 6.9 marks the bottom. And we should be above that in every quarter moving forward; it could bounce around a little bit. And then ultimately, our medium term objective is to get both GPS and GPS back to 12 to 16% annual growth rates. Got it.

Speaker Change: and we should be above that in every quarter moving forward. It could bounce around a little bit and then ultimately our medium-term objective is to get both GTS and GBS back to 12 to 16 percent annual growth rates.

Jeffrey P. Meuler: And then on the building sales headcount. From here, I guess the tech vendor. Territories, I don't know exactly the phrase you use, but I don't know if it's just dynamic territory planning, but was that something that you recently kind of like kicked into gear, or was that an ongoing dynamic? Just not sure what you're trying to signal there, and is it reassigning salespeople or just managing those territories through a traditional? Hey Jeff, it's Gene.

Eugene Hall: And then on the building sales headcount from here, I guess the tech vendor territory. I don't know exactly the phrase you use, but I don't know if it's just dynamic territory planning. Was that something that you recently kind of like kicked into gear, or was that an ongoing dynamic? Just not sure what you're trying to signal there. And is it reassigning salespeople, or just managing those territories through attrition? Hey, chap, Jean. So we do do what we call dynamic territory planning, which is we look at every territory, literally every territory each week to see what the productivity is then and let the kind of trend is.

Speaker Change: Got it. And then on the building sales headcount from here, I guess the tech vendor...

Speaker Change: Territory, I don't know exactly the phrase you use, but I don't know if it's just dynamic territory planning, but was that...

Speaker Change: Was that something that you recently kind of like kicked into gear, or was that an ongoing dynamic, just not sure what you're trying to signal there, and is it reassigning salespeople, or just managing those territories through attrition?

Eugene A. Hall: So, we do what we call dynamic territory planning. We look at every territory, literally every territory, each week to see what the productivity is then and what the kind of trend is. And then what we do is, as we have turnover, as one salesperson leaves, you know, and of course, even though we have low turnover, we do have people leave every quarter, we look at where's the most productive place to put that territory. So I'll give you just an extreme example.

Speaker Change: Hey Jeff, it's Gene. So, we do do what we call dynamic territory planning, which is we look at every territory, literally every territory, each week to see what the productivity is then and what the kind of trend is.

Eugene Hall: And then what we do is, as we have turnover, is one salesperson leaves. You know, of course, we have even more turnover; we do have people leave every quarter. We look at where is the most productive place for those territories. So I'll give you just an extreme example. And we used to have salespeople in Russia. We decided, you know, obviously, we were going to sell in Russia back when the patient happened. So we don't fill those territories anymore, but we have other territories that are we most 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 that, in today's environment, can't get funding.

Jeffrey P. Meuler: And then what we do is, as we have turnover, as one sales person leaves, you know, and of course we have, even though we have low turnover, we do have people leave every quarter, we look at where's the most productive place to put those territories.

Eugene A. Hall: And we used to have salespeople in Russia. We decided, you know, obviously we weren't gonna sell in Russia back when the invasion happened. So we don't fill those territories anymore, but we have other territories that are most productive. For 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 that, in today's environment, can't get funding, whereas there are others, like, especially those in AI, that can.

Speaker Change: So I'll give you just an extreme example and we used to have salespeople in Russia We decided, you know, obviously we weren't gonna sell in Russia back when the invasion happened

Speaker Change: So we don't fill those territories anymore, but we have other territories that are most productive.

Speaker Change: In a more recent example, if you look at the small tech vendor market,

Speaker Change: There are sets of small tech vendors.

Eugene Hall: Whereas there's others like for especially those in AI that can't. And so what we do is literally on a weekly basis say, okay, 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 places where, in fact, like AI basically are going to be 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, if we have cases where it's clear that it's not going to recover the short term, we'll do it more proactively than that too.

Speaker Change: that used to be able to get funding that in today's environment can't get funding.

Eugene A. Hall: And so what we do is literally on a weekly basis say, okay, but these people leave because we're selling them to tech companies that are not gonna get funding. Let's take those territories and move them over to places where, in fact, like AI-based, they are gonna get funding.

Speaker Change: whereas there's others like for especially those in AI that can't.

Speaker Change: And so what we do is, literally on a weekly basis, say, okay, if these people leave, you know, that we're selling to tech companies that are not going to get funding, let's take those territories and move them over to places where, in fact, like AI-based, where they are going to get funding.

Craig W. Safian: 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, if we have cases where it's clear that it's not going to recover in the short term, we'll do it more proactively than that, too. We'll say, we'll actually close those territories down and move either those people or that headcount to more productive areas. And then, you know, 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 GGS by the end of the year, and high single-digit QBH growth for GBS by the end of the year. And again, implicit in all that are all the things Gene talked about.

Speaker Change: So we're doing this on a constant basis to make sure our sales people are always...

Speaker Change: deployed in the most productive territories. We do it with turnover, and again, if we have cases where it's clear that it's not gonna recover in the short term, we'll do it more proactively than that, too. We'll say, we'll actually close those territories down and move either those people or that headcount to more productive areas.

Eugene Hall: We'll say, actually close those territories down and move like these are those people or that head count to more productive areas. And then, you know, the 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. Again, implicit in all that or all the things Jean talked about, that's been our normal operating procedure for the last four or five years now, is 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 your short term, medium term, and long term operation.

Speaker Change: And then, you know, the, 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. And again, implicit in all that are all the things Gene talked about, 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.

Craig W. Safian: 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, you know, short term, medium term, and long term opportunities.

Eugene Hall: Thank you.

Speaker Change: your short-term, medium-term, and long-term opportunities.

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

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

Speaker Change: Thank you.

Toni Michele Kaplan: Thank you. I wanted to focus on the research revenue guide. It seems like you lowered it because of the non-subscriber business. I know TechVendor actually returned to growth on the subscription side, but the non-subscriber piece, I think, still seems to be declining. I guess, was it because your guide was down, was it because the non-subs were worse than you originally thought, or is just the trajectory not going to be as quick as you were thinking? Just maybe help us through the trajectory on the non-subs. Yeah, sure, Toni.

Speaker Change: Thank you.

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

Craig Safian: I wanted to focus on their research revenue guide. It seems like you lowered it because of the non-subs business. I know tech vendor actually returned to growth on the subscription side, but the non subs piece I think still is seems to be declining. You know, I guess was was it because your guide down was it because non subs was worse than your originally thought or is just the trajectory not going to be as quick as you are thinking just maybe maybe help us through the trajectory on the non subs piece. Thanks.

Toni Michele Kaplan: Thank you. I wanted to focus on their research revenue guide. It seems like you lowered it because of the non-subs business. I know TechVendor actually returned to growth on the subscription side, but the non-subs piece I think still is

Speaker Change: It seems to be declining.

Speaker Change: Yeah, I guess.

Speaker Change: Thank you.

Speaker Change: Was it because, your guide down, was it because non-subs was worse than you originally thought, or?

Speaker Change: Is just the trajectory not going to be as quick as you were thinking, just maybe maybe help us through the trajectory on the non subs piece. Thanks.

Craig Safian: Yes, for Tony, I mean, the first thing I'd say is that the entire operational change relates to the non-sub piece, the subscription revenue piece of the overall research revenue. I mean, it's up a little bit from foreign exchange, but from an operational perspective, the guidance is essentially unchanged from last quarter. And again, yeah, as we talked about last quarter, we believe that the bottom was going to be either Q1 or Q2. And so, you know, we had a strong, solid Q2 of NCVI and TV growth dialed into our outlook. And so everything, all the change, relates to non-subscription business.

Craig W. Safian: I mean, the first thing I'd say is that the entire operational change relates to the non-sub piece, the subscription revenue piece of the overall research revenue. It's up a little bit from foreign exchange, but from an operational perspective, the guidance is essentially unchanged from last quarter. And again, as we talked about last quarter, we believed that the bottom was going to be either Q1 or Q2.

Speaker Change: Yes, sure, Toni. I mean, the first thing I'd say is that the entire operational change relates to the non-sub piece.

Speaker Change: The subscription revenue piece of the overall research revenue, I mean, it's up a little bit from foreign exchange, but from an operational perspective, the guidance is essentially unchanged from last quarter.

Toni Michele Kaplan: And so we had a strong, solid Q2 of NCBI and NCV growth dialed into our outlook. And so everything, all the change relates to non-subscription business. Great, and then. The cash balance is pretty high. You're below leverage.

Speaker Change: And again, you know, as we talked about last quarter, we believed that the bottom was going to be either Q1 or Q2. And so, you know, we had a strong, solid Q2 of NCBI and NCB growth dialed into our outlook. And so everything, all the change relates to non-subscription business.

Craig Safian: Great.

Craig Safian: And then the cash balance is pretty high, you're below leverage, you added capacity to the buyback program. You know, maybe just give us an update on what conditions could we look for the sort of for you to be buying back more stock. I know you already do, but just to sort of elevate that level. Thanks. Yes, sure. So, you know, our basic philosophy on buybacks is to be price-sensitive, opportunistic, and disciplined. And, you know, I'd underscore each of those. There are all sorts of important in influencing our philosophy on buybacks. You know, what I'd also say, obviously, you know, this and most want to go through this. You know, we've returned a lot of capital since 2021 back to our shareholders.

Speaker Change: Great. And then, um...

Craig W. Safian: You added capacity to the buyback program. You know, maybe just give us an update on, like, what conditions could we look for to sort of trigger you to be buying back more stock? I know you already do, but just sort of elevate that level.

Speaker Change: The cash balance is pretty high. You're below leverage. You added capacity to the buyback program.

Speaker Change: You know, maybe just give us an update on, like, what conditions could we look for?

Speaker Change: sort of for you to be buying back more stock. I know you already do, but just sort of elevate that level, thanks.

Craig W. Safian: Yeah, sure. So, you know, our basic philosophy on buybacks is to be price sensitive, opportunistic, and disciplined. And, you know, I'd emphasize each of those because they're all sort of important in influencing our philosophy on buybacks. What I'd also say, obviously, and you know this, and most people on the call know this, we've returned a lot of capital since 2021 to our shareholders. You know, we're close to what we did the whole year 23 through the first half of 24.

Speaker Change: Yeah, sure. So, you know, our basic philosophy on buybacks is to be price sensitive, opportunistic, and disciplined.

Speaker Change: and you know I'd underscore each of those because they're all sort of important in influencing our philosophy on buybacks.

Speaker Change: [inaudible]

Speaker Change: What I'd also say, obviously, and you know this, and most people on the call know this, you know, we've returned a lot of capital since 2021, back to our shareholders. You know, we're close to what we did full year 23 through the first half of 24. And in fact, our, you know, free cashflow or operating cashflow and buybacks are, you know, pretty, pretty close on top of each other through the first six months of the year. And so, you know, we're going to continue to be priced.

Craig Safian: You know, we're close to what we did fully or 23 through the first half of 24. In fact, our free cash flow or operating cash flow and buybacks are pretty, pretty close on top of each other through the first six months of the year. And so, you know, we're going to continue to be price-sensitive, opportunistic, and disciplined, but we want to make sure that we are driving incremental shareholder value by leveraging our free cash flow and our balance sheet. And so, you know, we look at strategic value enhancing tuck-in M&A, and an essence of that buybacks, the bias over the last several years has been has been buybacks.

Craig W. Safian: And in fact, our free cash flow, or operating cash flow, and buybacks are, you know, pretty close to each other through the first six months of the year. And so, we're going to continue to be price sensitive, opportunistic, and disciplined, but we want to make sure that we are driving incremental shareholder value by leveraging our free cash flow and our balance sheet. And so, you know, we look at strategic value creation, tuck in M&A, and in the absence of that, buybacks. The bias over the last several years has been buybacks.

Speaker Change: sensitive, opportunistic, and disciplined. But we want to make sure that we are driving incremental shareholder value by leveraging our free cash flow and our balance sheet. And so, you know, we look at strategic value enhancing, tuck in M&A, and in absence of that, buybacks. The bias over the last several years has been buybacks.

Craig Safian: And I would presume that moving forward, we would be more focused on buybacks going forward. So, you're right. We have cash. We have capacity. We did a pretty good job through the first six months of the year, and we'll continue to make sure that we're driving incremental shareholder value by leveraging our balance sheet of free cash flow.

Craig W. Safian: And I would presume that, you know, moving forward, we would be more focused on buybacks going forward. So you're right, we have cash, and we have capacity. We did a pretty good job through the first six months of the year, and we'll continue to make sure that we're driving incremental shareholder value by leveraging our balance sheet and free cash flow. Thank you. Thank you. Our next question comes from the line of Andrew Nicholas with William Blair. Please proceed. Hi, good morning.

Speaker Change: And I would presume that moving forward, we would be more focused on buybacks going forward. So you're right. We have cash. We have capacity. We did a pretty good job through the first six months of the year, and we'll continue to make sure that we're driving incremental shareholder value.

Speaker Change: by leveraging our balance sheet and free cash flow.

Operator: Thank you.

Andrew Nicholas: Our next question comes from the line of Andrew Nicholas with William Blair. Please proceed. Hi, good morning. Thank you for taking my questions. 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.

Speaker Change: Thank you.

Speaker Change: Thank you.

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

Operator: Thank you for taking my questions. I wanted to first focus on new business growth, which seemingly, stepped up pretty nicely relative to the first quarter. Can you unpack that a little bit?

Andrew Owen Nicholas: Hi, good morning. Thank you for taking my questions. I wanted to first focus on new business growth, seemingly

Andrew Owen Nicholas: 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

Andrew Owen Nicholas: 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. Hi Andrew, it's Gene.

Eugene Hall: Hi, Andrew. It's Gene. So what I'd say is that the selling environment for me pretty much the same, but I do think we've focused on improving the productivity of our teams. And as you know, we're always taking actions to be agile response to the future of the world. I think that's really the impact you receive. So the environment's got better in any way, really.

Eugene A. Hall: So what I'd say is the selling environments were pretty much the same. But I do think we've focused on improving the productivity of our teams. And as you know, we're always taking actions to be agile and respond to changes in the world. I think that's really the impact you're seeing. It's not that the environment got better in any way, really.

Speaker Change: The selling environment, any color there would be great.

Speaker Change: Hi, Andrew, it's Gene. So what I'd say is that the selling environments were pretty much the same, but I do think we focused on improving the productivity of our teams, and as you know, we're always taking actions to be agile, respond to changes in the world. I think that's really the impact you're seeing. It's not that the environment got better in any way, really.

Eugene Hall: Understood. And then I'm looking at the contract value per client or per client enterprise, and it continues to tick up nicely. Just wanted to confirm my hunch that the result of maybe losing some smaller tech vendor clients more so than dying a bunch more seats into the larger enterprises, but any any confirmation there color on that metric and how you'd expected to evolve as you have now seen the drop of CV growth. Thank you. So, Andrew, I'll get started to credit finish basically the our basic strategy with clients is when we sell a client, that's not the end.

Andrew Owen Nicholas: And then I'm looking at the contract value per client or per client enterprise, and it continues to tick up. Nicely, I just wanted to confirm my hunch that the results of maybe losing some smaller tech vendor clients more so than dialing a bunch 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. Thank you. So, Andrew, I'll get started. Craig can finish.

Andrew Owen Nicholas: Understood. And then I'm looking at the contract value per client or per client enterprise and it continues to tick up nicely. Just wanted to confirm my hunch that that's

Speaker Change: The results of maybe losing some...

Speaker Change: smaller tech vendor clients more so than

Speaker Change: Any confirmation there of color on that metric and how you'd expect it to evolve as you have now seen the trough of CV growth. Thank you.

Eugene A. Hall: Basically, our basic strategy with clients is when we sell a client, that's not the end. There's plenty of opportunity to sell more seats to those clients over time. And so one core part of our selling strategy is to keep selling additional business, additional licensed users to clients when we sell them. The other part of our strategy is, of course, to sell new logos as well. And so because that's one factor that you see there is that actually we've always had this as a core part of our strategy, which is always keeping growing existing clients as well.

Culler: So Andrew, I'll get started and Craig can finish.

Eugene Hall: There's plenty of opportunity to sell more seats in those clients over time. And so one core part of our selling strategy is to keep selling additional business additional license users to clients to sell them. The other part of our strategy is, of course, to sell new logos as well. And so because that's one factor that you see there is that actually we've always had this as a core part of strategy, which is always keep pulling existing clients as well as their clients. And Andrew, I would just add, you know, if you look at while retention, you know, being over 100%.

Craig W. Safian: Our basic strategy with clients is, when we sell a client,

Craig W. Safian: That's not the end. There's plenty of opportunity to sell more seats to those clients over time. And so one core part of our selling strategy is...

Craig W. Safian: to keep selling additional business, additional licensed users to clients who sell them. The other part of our strategy is, of course, to sell new logos as well. Because that's one factor that you see there is that actually, and we've always had this as a core part of our strategy, which is always keep growing existing clients as well as new clients.

Eugene A. Hall: And Andrew, I would just add, you know, if you look at wallet retention, being over 100%, you know, that is baked into what Gene just talked about in terms of once we have a client, we then expand our relationship with them each and every year. And we've been doing that for years.

Craig W. Safian: And Andrew, I would just add, you know, if you look at wallet retention, you know, being over 100 percent,

Craig Safian: You know, that that is baked in what Jean just talked about in terms of once we have a client, we then expand our relationship with them. Each and every year, and we've been doing that for years, and you know, we intend to continue to do that going forward. And there is a little bit of increased churn on the small end that you highlighted, which is also helping modestly, but helping that overall CV for enterprise figure as well.

Andrew Owen Nicholas: You know that that that is baked in what Gene just talked about in terms of

Andrew Owen Nicholas: Once we have a client, we then expand our relationship with them each and every year.

Craig W. Safian: And, you know, we intend to continue to do that going forward. And there is a little bit of increased churn on the small end that you highlighted, which is also helping modestly but helping that overall CV for enterprise figure as well. Thank you.

Speaker Change: And we've been doing that for years, and we intend to continue to do that going forward. And there is a little bit of increased churn on the small end that you highlighted, which is also helping modestly, but helping that overall CV for enterprise figure as well.

Operator: Thank you. And thank you.

Operator: Our next question comes from the line of Heather Balsky with Bank of America Securities. Please proceed. Hi, thank you very much.

Speaker Change: Thank you.

Heather Balsky: Our next question comes from the line of Heather Balski with Bank of America Securities. Please proceed. Hi. Thank you very much.

Speaker Change: And thank you. Our next question comes from the line of Heather Balsky with Bank of America Securities. Please proceed.

Heather Nicole Balsky: I was hoping to talk about your medium-term outlook and your 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? And also, going back to your comments in the third quarter, call 23, where you expected tech vendors 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? Good morning, Heather.

Eugene Hall: I was hoping to talk about your medium-term outlook and your getting back to that low teens growth number. You know, in the context of the environment right now, the selling environment, you know, how are you thinking about the time it could take you to get back there. And also going back to your comments on the third quarter call, 23, where you expected tech vendors 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? Thanks.

Heather Nicole Balsky: Hi, thank you very much. I was hoping to talk about your medium-term outlook and your view.

Speaker Change: Getting back to that low teens growth number.

Heather Nicole Balsky: In the context of the environment right now, the selling environment, how are you thinking about the time it could take you to get

Speaker Change: back there.

Speaker Change: And also going back to your comments on the third quarter, call 23, where you expected tech vendors 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?

Eugene Hall: Good morning, Heather. Thank you. In terms of the medium-term outlook, it is our goal, and again, we do need a stable. I won't say a great operating environment, but a stable operating environment. I'd argue we're doing really well in a very volatile, upgrading environment globally, probably more volatile. We don't like to seek, 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, and obviously we want to get that back up into the 12 to 16% range.

Craig W. Safian: Thank you. In terms of the medium-term outlook, that is our goal. And again, we do need a stable, I won't say a great operating environment, but a stable operating environment. I'd argue we're doing really well in a very volatile operating environment globally, probably more volatile than 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.

Speaker Change: Good morning, Heather. Thank you. In terms of the medium-term outlook, it is our goal, and again, we do need a

Speaker Change: stable, I won't say a great operating environment, but a stable operating environment. You know, I'd argue we're doing really well in a very volatile operating environment globally, probably more volatile than that. You know, we'd all like to see, quite honestly, but you know we're continuing to do well. GBS is growing in that medium-term guidance range today.

Speaker Change: You know, the end user portion or the enterprise leader portion of

Craig W. Safian: And obviously, we want to get that back up into the 12 to 16 percent range. And then 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 still very challenging, particularly on the lower end of the tech vendor market. It's helpful.

Speaker Change: GTS is growing at high single-digit growth rates and obviously you know we want to get that back up into the 12 to 16 percent range.

Eugene Hall: Then, 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 still super-challenging, particularly on the lower end of the tech vendor market.

Speaker Change: And then on the tech vendor side, you know, what I would say is small tech continues to be a super challenging operating environment.

Speaker Change: You know, we were pleased to see the overall tech vendor business return to growth in this quarter from from last quarter, but it is still super challenging, particularly on the lower end of the tech vendor market.

Eugene Hall: 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 sequential cadence that you typically see, generally not the exact number, but the trend. Generally, no. So our selling motion, our conference calendar, things like that, which are a big piece of which drives the typical phasing, are pretty stable. So no, I would expect us to follow the similar trends that we've seen.

Craig W. Safian: 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.

Speaker Change: Okay, that's helpful. And as a follow-up, you know, the business tends to see...

Speaker Change: Ew.

Speaker Change: consistent

Speaker Change: 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 that the sort of sequential cadence that you typically see generally not not like the exact number but but the trend

Heather Nicole Balsky: So our selling motion, our conference calendar, things like that, which are a big piece of what drives the typical phasing, are, you know, pretty stable. So, no, I would expect us to follow the similar trends that we've seen. Obviously, you know, we called out Q1 of this year earlier because it was a little off trend, but I think the back half of the year, you know, should look like a normal back half of the year for us from that point of view. Thank you.

Speaker Change: Generally, no. So our selling motion, our conference calendar, things like that, which

Speaker Change: are a big piece of what drives the typical phasing.

Speaker Change: are pretty stable. So no, I would expect us to follow the similar trends that we've seen. Obviously, we called out Q1 of this year earlier because it was a little off trend, but I think back half of the year should look like a normal back half of the year for us from that perspective.

Eugene Hall: 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. Thank you.

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

Craig W. Safian: Our next question comes from the line of Josh Chan with UBS; please proceed. Hi, good morning, Gene and Craig. Thanks for taking my questions.

Speaker Change: Thank you.

Speaker Change: Thank you.

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

Eugene Hall: Tag the morning, Jeanne Craig. Thanks for taking my questions. If I look at the CV growth, so GTS obviously reaccelerated nicely, as you had predicted. How do you think about the shape of the GBS, as that's been kind of moderating slowly, perhaps because of the macro? How do you envision GBS trending from here? So GBS, you know, first of all, 12% of 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. The CV growth is going to bounce around a little bit, quarter to quarter, but the huge market opportunities are there and we're prepared to go get it.

Operator: 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 a quarter, which we think is really good. The second thing is that GBS has a tremendous market opportunity, and we are aligned to capture that opportunity over time.

Joshua K. Chan: Hi, good morning, Gene and Craig. Thanks for taking my questions. 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?

Speaker Change: How do you envision GBS trending from here?

Speaker Change: So, GBS, you know, first week we're at 12% in the quarter, which we think is really good.

Speaker Change: The second thing is, you know, GBS has a tremendous market opportunity. We are, you know, aligned to go capture that opportunity over time.

Operator: CV growth is gonna bounce around a little bit quarter to quarter, but the huge market opportunity is 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. Okay, great. Thank you.

Speaker Change: CB Growth is going to bounce around a little bit quarter to quarter, but the huge market opportunity is there, and we're prepared to go get it. And again, the medium-term objective for that business is 12 to 16 percent growth, and we continue to believe that the GBS business and the GTS business can both deliver 12 to 16 percent CB growth.

Eugene Hall: 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. Okay, great. Thank you.

Craig Safian: And then if I can ask a question on margin, I guess the ingredients that led to the slight year-to-year EBITDA margin expansion in Q2, is there any reason that those ingredients wouldn't also hold into this kind of half? And thanks for your time. Thank you, Josh.

Joshua K. Chan: And then, if I can ask a question on margin. I guess the ingredients that led to the slight year-over-year EBITDA margin expansion in Q2, is there any reason that those ingredients wouldn't also hold into the second half? Thank you, Josh. Great question.

Speaker Change: Okay, great. Thank you. And then if I can

Craig W. Safian: So, you know, the way to think about the second half, you know, again, is sort of back to Heather's question a little bit too, normal phasing from both a revenue perspective and from an operating expense perspective, coupled with, you know, continuing to make sure that we are investing for future growth. And again, we talked about mid-single-digit QBH growth for GTS and high-single-digit QBH growth So, making sure that those investments are dialed into the second half operating expense forecast and plans.

Craig Safian: Great question. So, you know, the way to think about the second half, you know, again, it's sort of back to Heather's question a little bit too. Normal phasing from both a revenue perspective and from an operating expense perspective. Coupled with, you know, continuing to make sure that we are investing for future growth. You know, and again, we talked about mid-single-digit QBH growth for GTS and high-single-digit QBH growth for GTS. So, making sure that those investments are dialed into the second half operating expense, you know, forecast and plans.

Speaker Change: Thank you Josh, great question. So, you know, the way to think about the second half, you know, again, is sort of back to Heather's question a little bit too, normal phasing from both a revenue perspective and from an operating expense perspective.

Speaker Change: Coupled with, you know, continuing to make sure that we are investing for future growth.

Speaker Change: And again, we talked about mid-single-digit QBH growth for GTS and high-single-digit QBH growth for GBS. So, making sure that those investments are dialed in to the second half operating expense.

Craig W. Safian: You know, the other thing I would note is that Q2 is our highest-margin quarter for conferences. So, despite Q4 being the largest revenue quarter, Q2 is actually the highest-margin quarter, which drives some of that benefit that you saw in the second quarter. But if you kind of, you know, run the math on revenue, normal OPEX phasing given, you know, our conference calendar and also dialing in that incremental investment for the QBH growth, which, again, as you know, doesn't really benefit the results or top-line results this year.

Craig Safian: The other thing I would know is that Q2 is our highest margin quarter for conferences. So, despite Q4 being the largest revenue quarter, Q2 is actually the highest margin quarter, which drives some of that benefit that you saw in the second quarter. But it kind of, you know, run the map on revenue, normal op-backs, phasing, given, you know, our conference calendar, and also dialing in that incremental investment for the QBH growth. But again, you know, as you know, it doesn't really benefit the results or top-line results this year. Those are really investments for the future.

Speaker Change: you know, forecasts and plans.

Speaker Change: Yeah, the other thing I would note is that.

Speaker Change: Q2 is our highest margin quarter for conferences.

Speaker Change: So, despite Q4 being the largest revenue quarter, Q2 is actually the highest margin quarter, which drives some of that benefit that you saw in the second quarter. But to kind of, you know, run the math on revenue, normal, OPEX, phasing, given...

Speaker Change: you know, our conference calendar, and also dialing in that incremental investment for the QBH growth, which again,

Craig W. Safian: Those are really investments for the future. That's how you can sort of reconcile from the Q2 EBITDA margins down to the second half EBITDA margins, which then give you that full-year outlook of around 23.5%. Great, thank you for the color and the time.

Speaker Change: You know, as you know, it doesn't really benefit the results or top line results this year. Those are really investments for the future. That's how you can sort of reconcile from the Q2 EBITDA margins down to the second half EBITDA margins, which then give you that full year outlook of around 23.5%.

Operator: That's how you can sort of reconcile from the Q2 EBITDA margins down to the second half EBITDA margins, which then give you that full year outlook of around 23.5 percent. Great. Thank you for the color and the time.

Manav Patniak: Thank you. Our next question comes from the line of Manav Patniak with Barclays. Please proceed.

Speaker Change: Great, thank you for the color and the time.

Joshua K. Chan: Thank you. Our next question comes from the line of Manav Patnaik with Barclays; please proceed. Hey, this is Brendan on behalf of Manav.

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line of Manav Patnaik with Barclays. Please proceed.

Eugene Hall: Hey, this is Brendan Anfer Manav. I just want to ask, there's been some, I guess, reports on companies facing kind of like a GenAI attacks on their ITU budgets, just with the expense of some of the new technology. I'm just curious if what you guys have seen and related to that and kind of what your customers are saying and if there's any impacts from that. Obviously, it's also an opportunity as well, but just what you're seeing near-term. Yeah, it's a great question, Brendan. So GenAI continues to be a topic of very, very high interest in all of our clients.

Operator: I just want to ask, there's been some, I guess, just reports on companies facing kind of a Gen AI tax on their IT budgets, just with the expense of some of the new technology. Just curious about what you guys have seen related to that and kind of what your customers are saying and any, you know, if there's any impacts from that. Obviously, it's also, you know, an opportunity as well, but just what you're seeing near term. Yeah, it's a great question, Brendan.

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

Brendan J. Popson: So, Gen AI continues to be a topic of very, very high interest among all of our clients. But if you look at our enterprise function leaders as opposed to the tech companies, they're easing into the investments. The tech companies are investing heavily. The enterprise function leader businesses are basically 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.

Speaker Change: Yeah, it's a great question Brendan. So, Gen AI continues to be a topic of very, very high interest with all of our clients.

Eugene Hall: If you look at kind of our enterprise function leaders as opposed to tech companies, they're easing into the investments. The tech companies are investing heavily. The enterprise function leaders, you know, businesses are basically starting to invest and looking for the best use cases where they can get the highest term on Genai. I think people are still wrestling with what the right formula is there. And it's great for us because we're talking very high interest. They're spending money on it, and it's important to them, and so it's a place we can really add a lot of time.

Speaker Change: If you look at kind of our enterprise function leaders as opposed to the tech companies...

Speaker Change: They're easing into the investments. The tech companies are investing heavily. The enterprise function leader, you know businesses are basically Starting to invest and looking for the best use cases where they can get the highest return on JAI

Brendan J. Popson: It's great for us because we're a topic of very high interest. They're spending money on it, and it's important to them. It's a place we can really add a lot of value. OK, and then just follow up. The cash and leverage you mentioned, you always mentioned Tuckin M&A as a possibility, just kind of give us an idea of what I guess what kinds of Tuckin M&A you would consider. Yeah, hi Brendan, it's Craig.

Speaker Change: I think people are still wrestling with what the right formula is there. And it's great for us because we're a topic of very high interest. They're spending money on it, and it's important to them. And so it's a place we can really add a lot of value.

Craig Safian: Okay, and then just following up. with the cash and leverage you mentioned, you always mentioned Tuck and M&A as a possibility. Just kind of gives an idea of what kinds of Tuck and M&A you would consider. Yeah, hi, Brendan, Craig. So generally we think about M&A from kind of three angles. One would be enhancing our research coverage in some area. So, you know, 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, you know, assets that could enhance the insights to which we provide the operating executives that are a target audience.

Speaker Change: Okay, and then just following up, with the cash and leverage, you mentioned, you know, you always mentioned Tuckin M&A as a possibility. Just kind of give us an idea of what, I guess, what kinds of Tuckin M&A you would consider?

Eugene A. Hall: So, you know, generally, we think about M&A from kind of three angles. One would be enhancing our research coverage in some areas. So, you know, 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 the operating executives that are a target audience. Second, it would be sort of a geographic fill in.

Speaker Change: Yeah, hi Brendan, it's Craig. So, you know, generally we think about M&A, you know, from from kind of three angles.

Speaker Change: One would be enhancing our research coverage in some area. So, you know, it could be where we need more in marketing or we need more in finance or something like that.

Speaker Change: So that would be one flavor of acquisition, looking for assets that could enhance the insights to which we provide.

Craig Safian: Second would be sort of a geographic feeling, sort of the same tone and tenor there, but going after geographies where we're not as strong or don't have as much critical mass. And then third and perhaps fourth would be sort of assets or technology type acquisitions that would, you know, 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. And again, if you look at the, you know, there's a handful of small acquisitions we've done over the last five, six years. We kind of have, you know, at least one in each of those categories.

Craig W. Safian: So sort of the same tone and tenor there, but going after geographies where we're not as strong or don't have as much critical mass. And then, third and perhaps fourth, would be sort of assets or technology-type acquisitions that would 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. And again, if you look at the handful of small acquisitions we've done over the last five, six years; we kind of have at least one in each of those categories. And that's sort of what the M&A radar screen looks like today. Thank you. Thank you. Our next question comes from the line of Surinder Thind with Jeffrey.

Speaker Change: the operating executives that are our target audience. Second would be sort of a geographic fill-in, so sort of the same tone and tenor there, but going after geographies where we're not as strong or don't have as much critical mass.

Speaker Change: And then third and perhaps fourth would be sort of

Speaker Change: assets or technology type acquisitions that would, you know, help us catalyze getting the market faster or buying some capability that is really valuable to us that we can then, you know, leverage across the enterprise. And again, if you look at

Speaker Change: There's a handful of small acquisitions we've done over the last five, six years. We kind of have at least one in each of those categories, and that's sort of what the M&A radar screen looks like today.

Craig Safian: And that's sort of what the M&A radar screen looks like today.

Operator: Okay. Thank you.

Serendirton: Our next question comes from the line of Serendirton with Jeffries. Please proceed. Thank you. Can you maybe talk about just the thought behind the cadence for hiring funds 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. Please stand by Serendir. Sorry. So if you look at our tapes for hiring, if you look at the market overall, it's been very, I'd say uneven over the last few years. There was a pandemic where, you know, we slowed down our hiring dramatically.

Speaker Change: Thank you.

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line of Surinder Thind with Jeffrey. Please proceed.

Operator: Please proceed. Thank you. 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-loaded. Is that just looking for additional data points? Any color there would be helpful.

Sir Inderton: Thank you. 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.

Surinder Singh Thind: [inaudible] Please stand by. Surrender. Surrender. Sorry.

Sir Inderton: Hello.

Operator: So if you look at our case for hiring, if you look at the market overall, it's been very, I'd say, uneven over the last few years. There was a pandemic where, you know, we slowed down our hiring dramatically. There was the tech bubble afterwards, where it was hard to even hire people because the tech companies were so aggressively hiring. Then the year after that, the tech companies were laying people off. And so it was very easy to hire people.

Speaker Change: Please stand by. Surrender.

Speaker Change: So, if you look at our case for hiring, if you look at the market overall, it's been very, I'd say, uneven over the last few years. There was a pandemic where we slowed down our hiring dramatically.

Eugene Hall: There was the tech bubble afterwards, where it was hard to even hire people because the tech companies were so closely hiring. In the year after that, the tech companies were laying people off. And so it was very easy to hire people. And so we stepped up a couple of years ago, very well. And we had a lot of junior people. And so we wanted to make sure that those people were sure we got full productivity out of them. And also to see kind of what the macroeconomic and geopolitical world looks like. That seems to be more stable now.

Speaker Change: There was the tech bubble afterwards where it was hard to even hire people because the tech companies were so aggressively hiring. In the year after that, the tech companies were laying people off, and so it was very easy to hire people.

Eugene A. Hall: And so we stepped up a couple of years ago very well. And we had a lot of junior people. And so we want to make sure that those people make sure we get full productivity out of them, and also to see kind of what the macroeconomic and geopolitical world looks like.

Speaker Change: And so we've stepped up a couple of years ago very well, and we had a lot of junior people, and so we wanted to make sure that those people matured and we got full productivity out of them.

Eugene A. Hall: That seems to be more stable now, and we feel that the tenure of that group that we hired two years ago is at a stable point. And so it makes sense to ramp up our hiring. And the people we hire beginning in the second half of the year are going to be positioned as 25, 26, and 27.

Speaker Change: and also to see kind of what the macroeconomic and geopolitical world looks like.

Eugene Hall: And we feel like that tenure of that group would hire two years ago now as a stable point. And so it makes sense to ramp our hiring up. And the people we hire getting them second half year are going to position us 25, 26, 27. Because they're the part that you'll prove over the first three years of the hire, though.

Speaker Change: That seems to be more stable now, and we feel like the tenure of that group that we had two years ago now is at a stable point.

Speaker Change: And so it makes sense to ramp our hiring up. And the people we hire beginning in the second half of the year are going to be positioned as 25, 26, and 27, because the productivity will improve over the first three years we hire them.

Eugene A. Hall: The productivity will improve over the first three years we hire them. And so this additional hiring we're planning to do in the second half is really getting back to what we did traditionally before the rockiness of the last few years. And we would expect that kind of hiring trend to continue, which is more even going forward. And this is kind of just getting back to strategy after the last few years of tumultuous economic times.

Eugene Hall: And so this additional hiring we're planning to in the second half is really getting back to what we've done traditionally. But for the rockiness of the last few roads and the last few years. And we would expect that kind of hiring to continue. This is more even going forward. And this is just getting back to strategy after the last few years of. A lot of cultural. And, and surrender the other thing I just that there is, you know, from where we are today. It's another few hundred neck people, you know, on staff by the end of the year.

Speaker Change: And so this additional hiring we're planning to do in the second half is really getting back to what we've done traditionally before the rockiness of the last few roads, the last few years, and we would expect that kind of hiring trend to continue, which is more even going forward. And this is kind of just getting back to strategy after the last.

Eugene A. Hall: And Surendra, the other thing I just want to add is, you know, from where we are today, it's another few hundred net people on staff by the end of the year. So, you know, it may sound like a big sort of move, but it's actually not, you know, given the trend.

Speaker Change: a few years of a lot of tumultuous economic times. And Surinder, the other thing I just add there is, you know, from where we are today, it's another few hundred net people, you know, on staff by the end of the year. So, you know, it may sound like a big sort of move. It's actually not, you know, given the trending. And so, you know, again, if we target that mid-single digit.

Eugene Hall: So, you know, it made sound like a big sort of move. It's actually not, you know, given the trending. And so, you know, again, if we target that mid single digit. QBH growth for GTS and high single digit for GBS. You know, it's a few hundred more people. I bet we're next between now and then. here.

Craig W. Safian: And so, you know, again, if we target that mid single-digit QVH growth for GTS and high single-digit growth for GBS, you know, it's a few hundred more people between net between now and the end of the year. That's helpful. And then you mentioned CrowdStrike in the prepared remarks.

Speaker Change: QBH growth for GTS and high single-digit for GBS, you know, it's a few hundred more people between now and the end of the year.

Eugene Hall: That's helpful. And then you mentioned CrowdStrike in the prepared remarks.

Eugene Hall: 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. CrowdStrike on that Friday was certainly one of a big priority. And so we did see a big uptake in demand for our clients. It helps with engagement. We did a bunch of things in media to help them. We had a panel webinar that day.

Speaker Change: That's helpful. And then you mentioned CrowdStrike in the prepared remarks.

Surinder Singh Thind: 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?

Speaker Change: 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?

Eugene A. Hall: So our whole strategy is to help our clients with their most important priorities. CrowdStrike on that Friday was certainly a big priority. And so we did see a big uptick in demand for our clients. It helps with engagement. We did a bunch of things immediately to help them. We had a panel webinar that day. We had a document that we published that day. We had a webinar live stream.

Speaker Change: So, you know, our whole strategy is to help our clients with their most important priorities.

Speaker Change: CrowdStrike on that Friday was certainly one of a big priority and so we did see a big uptick in demand for our clients It helps with engagement. We did a bunch of things immediately to help them. We had a panel webinar that day We had a document that we published that day

Eugene Hall: We had a document that we published that day. We had a webinar live stream. We did a whole series of things like that to help our clients. And so really, you know, we're helping them in the moment of need, which is great for our demand. If they part with children's existing clients, well for new clients, it gives us a reason why they should buy. So CrowdStrike, you know, the kinds of things to CrowdStrike are wanting businesses to help our clients with these difficult times.

Eugene A. Hall: We did a whole series of things like that to help our clients. And so really, you know, we're helping them with a mobile need, which is great for our business. It's great for our potential existing clients and also for new clients. It gives us a reason why they should buy. So CrowdStrike, you know, the kinds of things CrowdStrike or why it exists are to help our clients in these difficult times.

Speaker Change: We had a webinar live stream, and we did a whole series of things like that to help our clients. And so it really, you know, we're helping them in a moment of need, which is great for our demand. It's great for our participants, existing clients, and also for new clients. It gives us a reason why they should buy. So CrowdStrike, you know, the kinds of things in CrowdStrike, or why it exists, is to help our clients.

Operator: Thank you.

Speaker Change: Thank you for joining us today. I'm David Cohen. I'm Craig Safian.

George Tongue: Our next question comes from the line of George Tongue with Goldman Sachs. Please go ahead. Hi, thanks. Good morning. 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? So I would say the selling environment was pretty consistent between Q1 and Q2. There's not a lot of change there. I did think our execution was better. That's just why we had it a little bit of pickup parts of our business.

Operator: Thank you. Our next question comes from the line of George Tong with Goldman Sachs. Please go ahead.

Speaker Change: Thank you. Thank you.

Speaker Change: Our next question comes from the line of George Tong with Goldman Sachs. Please go ahead.

Keen Fai Tong: Hi, thanks. Good morning. 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? So I would say the selling environment was pretty consistent between Q1 and Q2. There was not a lot of change there. I do think our execution was better, which is why we had a little bit of a pickup in parts of our business. But the overall macroeconomic and geopolitical environment didn't change.

Speaker Change: Hi, thanks. Good morning. 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?

Speaker Change: So I would say the the selling environment was pretty consistent between Q1 and Q2 There's not a lot of change there. I do think our execution was better That's just why we had a little bit of pickup parts of our business But the overall macroeconomic and geopolitical environment didn't change much between Q1 and Q2

Eugene Hall: The overall overall macroeconomic and geopolitical environment didn't change much in Q2. Okay, got it. That's helpful.

Eugene A. Hall: 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 revenue outlook for the full year? Yeah, hey George, good morning.

Craig Safian: 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.

Speaker Change: 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?

Craig Safian: What factors are holding you back from raising your research subscription outlook for the full year? Yeah, hey, George. Good morning. The way I would characterize it is 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.

Craig W. Safian: You know, the way I would characterize it is, you know, we came in roughly where we thought we were going to land from a research, from a research subscription revenue perspective in the second quarter. CDGrowth did accelerate 50 basis points from Q1 to Q2. That, you know, was pretty deep into our full-year outlook. And so from where we stand today, we feel really good about, you know, the research subscription revenue line, as we mentioned in the prepared remarks. That's obviously the revenue line that we have the greatest visibility on. But it's also, you know, modest changes in CV don't have a huge impact from now until the end of the year.

Speaker Change: Yeah, hey George, good morning. You know, the way I would characterize it is...

Speaker Change: You know, we came in, you know, roughly where we thought we were going to land from a research subscription revenue perspective in the second quarter. You know, CD growth did accelerate 50 basis points from Q1 to Q2. That, you know, that was...

Craig Safian: That was pretty much dig into our full year outlook. And 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 that we have the greatest visibility on. But it's also modest changes in CV don't have a huge impact from now until the end of the year. It's really the CV growth we deliver for this year will really determine 2025 revenues. 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 that we dialed in for farming.

Speaker Change: Pretty much deep into our full year outlook.

Speaker Change: And so, from where we stand today...

Speaker Change: You know, we feel really good about

Speaker Change: You know, the research prescription revenue line, as we mentioned in the prepared remarks.

Speaker Change: That's obviously the revenue line that we have the greatest visibility on, but it's also, you know, modest changes in CV don't have a huge impact.

Craig W. Safian: It's really, you know, the CV growth we deliver for this year will really determine 2025 revenue. So I think our perspective is sort of on target or on expectation for Q2, with no change to the research subscription revenue line for the balance of the year other than the modest uptick that we dialed in for foreign exchange. Got it.

Speaker Change: From now until the end of the year, it's really, you know, the CV growth we deliver for this year will really determine 2025.

Speaker Change: revenues. 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 that we dialed in for foreign exchange.

Operator: James. Got it. Very helpful.

Jeff Silber: Thank you. And our next question is from Jeff Silber, with BMO Capital Markets. Please proceed. Thanks so much. I wanted to focus on retention. The retention metrics are still going down. I know that the clients seem to be getting less worse, which is good to see.

Speaker Change: Got it, very helpful, thank you.

Keen Fai Tong: Very helpful. Thank you. Thank you. And our next question is from Jeff Silber with BMO Capital Markets. Please proceed. Thanks so much.

Speaker Change: Thank you.

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

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

Jeffrey Marc Silber: Thanks so much. 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'll take to get the retention metrics starting to move in a positive direction again? Is there anything you can do from your end?

Eugene Hall: But what do you think it'll take to get the retention metrics starting to move in a positive direction? Again, is there anything you can do from your end?

Eugene Hall: Hi, Jeff. Good morning. So, you know, I'd say, you know, focusing on GTS first. So while retention, as I think I mentioned, the prepared remarks for the enterprise function leader part of the business is at historical level, and you continue to be pretty pretty strong there. And so I think what all you're seeing is the continued tech vendor-challenging market. And again, in particular, the small tech vendor part of the market, you know, diluting the retention metrics a little bit. We will eventually wash through this. It will take some time because it's, you know, it's not as simple as thinking about, well, business you showed, you know, 24 months ago. You're already through that now.

Jeffrey Marc Silber: Hi Jeff. Good morning. So, you know, I'd say, you know, focusing on GTS first. So, while retention, as I think I mentioned in the prepared remarks for the enterprise function leader part of business, is at historical levels and, you know, continues to be pretty strong there. And so I think what you're seeing is the continued challenge from tech vendors in the market. And again, in particular, the small tech vendor part of the market, you know, diluting the retention metrics a little bit. We will eventually watch this through, it will take some time, because it's not as simple as thinking about, well, the business you sold, you know, 24 months ago; you're already through that now.

Jeffrey Marc Silber: Hi Jeff, good morning. So, you know, I'd say

Speaker Change: You know, focusing on GTS first, so 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, you know, continues to be pretty strong there.

Speaker Change: And so I think what all you're seeing is the continued tech vendor challenging market and again, in particular, the small tech vendor part of the market.

Speaker Change: You know, diluting the retention metrics a little bit.

Speaker Change: We will eventually wash through this. It will take some time, because it's not as simple as thinking about, well, business you sold 24 months ago, you're already through that now, and so there are no more issues.

Jeffrey Marc Silber: And so there are no more issues; it's really client specific in terms of when they got funding, when their funding runs out, you know, when they have cash flow problems, etc. And so I think what you're still seeing is just a drag down from, in particular, small technology companies, which is driving the retention stuff.

Eugene Hall: And so there are no more issues. It's really client-specific in terms of when they got funding, when their funding runs out, you know, when they have cash flow problems, et cetera. And so I think what you're still seeing is just a drag down from, in particular, small technology companies, you know, that is driving the retention stuff.

Speaker Change: Client-specific in terms of when they got funding, when their funding runs out, you know, when they have cash flow problems, etc. And so I think what you're still seeing is just a drag down from, in particular, small technology companies.

Eugene Hall: On the GBS side, you know, I think we, you know, had really, really strong wallet retention there, particularly coming out of the pandemic. The wallet retention numbers are still, you know, significantly higher than what we reported on the GTS side. And so I'd argue that the GBS wallet retention metrics and client retention metrics are, you know, are relatively strong as well.

Craig W. Safian: On the GBS side, you know, I think we had really, really strong wallet retention there, particularly coming out of the pandemic; the wallet retention numbers are still, you know, significantly higher than what we report on the GTS side. And so I'd argue that the GBS wallet retention metrics and client retention metrics are relatively strong as well. Okay, great.

Speaker Change: you know, that is driving the retention stuff. On the GBS side, you know, I think

Speaker Change: We

Speaker Change: You know, had really, really strong wild retention there, particularly coming out of the pandemic. The wild retention numbers are still, you know, significantly higher than what we report on the GTS side. And so I'd argue that the GBS wild retention metrics and climate retention metrics are, you know, are relatively strong as well.

Jeff Silber: Okay, great. And if I could shift over to the contract link 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, that's correct. And are a lot of those two-year terms coming up for renewal over the next few months or so?

Jeffrey Marc Silber: And if I could shift over to the contract length 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, you were probably shifting a little bit more towards two years. If you could just remind me if that's correct.

Speaker Change: Okay, great. And if I could shift over to the contract link for research. If I remember correctly, at one point in time,

Speaker Change: 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 if that's correct. Are a lot of those two-year terms coming up for renewal over the next few months or so?

Craig Safian: Yeah, our, hey, Jeff, our standard contract link, I would say, is 24 months. We do write some that are 12 months, and we do write some that are 36 months, but the vast majority are 24 months. And so we always have a significant amount of contracts coming up for renewal in basically every quarter because our sellers and our clients consume predominantly 24-month contracts. I think our average contract link is somewhere in the 1.7 to 1.8-year range. More than 70% of our contract value is multi-year in nature. And so again, we're always going to have two-year deals and three-year deals coming up for renewal, pretty consistently, quarter to quarter to quarter.

Craig W. Safian: And are a lot of those two-year terms coming up for renewal over the next few months? Yeah, our, hey Jeff, our standard contract length is 24 months. We do write some that are 12 months, and we do write some that are 36 months, but the vast majority are 24 months.

Speaker Change: Yeah, our, hey Jeff, our standard contract length, I would say, is 24 months.

Speaker Change: We do write some that are 12-month, and we do write some that are 36-month, but the vast majority are 24-month. And so, we always have a significant amount of contracts coming up for renewal in basically every quarter. Every quarter, because our sellers and our clients...

Craig W. Safian: And so we always have a significant amount of contracts coming up for renewal in basically every quarter, every quarter because our sellers and our clients consume predominantly 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. And so again, we're always going to have two-year deals and three-year deals coming up for renewal pretty consistently quarter to quarter to quarter to quarter. I appreciate the call.

Speaker Change: consume predominantly 24-month contracts. I think our average contract length is somewhere in the 1.7 to 1.8 year range.

Speaker Change: More than 70% of our contract value is multi-year in nature and so again we're always going to have two-year deals and three-year deals coming up for renewal pretty consistently quarter to quarter to quarter to quarter.

Eugene Hall: 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.

Eugene A. Hall: 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 delivers financial results ahead of expectations.

Speaker Change #100: I appreciate the call. Thanks.

Speaker Change #101: 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 fast addressable market opportunity, with a strong and compelling dot client value proposition. Looking ahead, we're well positioned to drive sustained W2 revenue growth over the long term. We will continue to create value for our shareholders, are providing actual objective insight to our clients.

Eugene A. Hall: Here's what I'd like you to take away from today's call. Gartner delivers financial results ahead of expectations. We deliver 10% contract value growth with Enterprise Function Leaders.

Eugene A. Hall: We deliver 10% contract value growth with that enterprise function. We have a fast, addressable market opportunity with 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 actual objective insight to our clients. Crudely investing for future growth, generating free cash flow well in excess of net income, and returning capital to our shareholders through our Share Refersys program. Thanks for joining us today, and we look forward to updating you again next week. And I thank you all for participating in today's conference, and you may now disconnect.

Eugene A. Hall: We have a fast, addressable market opportunity with a strong and compelling client value proposition.

Eugene A. Hall: Looking ahead, we're well-positioned to drive sustained, double-digit revenue growth over the long term.

Pretty investing for future growth, generating free cash flow, well-nexus of that income, and returning capital to our shareholders, for our shareholders versus program. Thanks for joining us today, and we look forward to updating you again next quarter. And thank you all for participating in today's conference, and you may now disconnect.

Eugene A. Hall: We will continue to create value for our shareholders by providing actual objective insight to our clients, crudely investing for future growth, generating free cash flow well in excess of net income, and returning capital to our shareholders through our Share Referses Program.

Eugene A. Hall: Thanks for joining us today, and we look forward to updating you again next quarter.

Speaker Change #102: And thank you all for participating in today's conference, and you may now disconnect.