Q3 2025 Gartner Inc Earnings Call

November 4, 2025

Please go ahead.

Good morning, everyone.

Welcome to Gardner <unk> third quarter, 2025 earnings call and David Cohen SVP of Investor Relations at.

At this time all participants are in a listen only mode. After comments by Gene Hall, Garners, Chairman and Chief Executive Officer, and Craig Safian Gardner Chief Financial Officer, there'll be a question and answer session.

Be advised that today's conference is being recorded.

This call will include a discussion of third quarter 2025 financial results and Gartner is outlook for 2025 as disclosed in today's earnings release and earnings supplement both posted to our website investor Doc <unk> Dot 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 <unk>.

Craig Safian: And so we fully expect next year to accelerate our CV growth, and we fully expect next year also to continue to make investments that catalyze that CV growth and sustain that CV growth into the future. Great. Thank you. Thank you. Our next question comes from Toni Kaplan with Morgan Stanley. Your line is open. Thanks so much. I actually wanted to follow up on that last question, just in light of the environment. What are your expectations for sales headcount growth in 2026 for both of the segments, please? Hi, Toni. Good morning. So we're in the midst of hardcore operational planning for next year. There's obviously a wide range of scenarios and outcomes that we are planning around, and we've got a wide range of potential investment scenarios that come out of that as well.

Ultimate all contract values and associated growth rates. We discuss are based on 2025 foreign exchange rates all growth rates in gene's comments are FX neutral unless stated otherwise all references to share counts for fully diluted 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 Dot Com website.

Fourth in more detail in today's earnings release certain statements made on this call may constitute 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 2024 annual report on Form 10-K, and quarterly reports on Form 10-Q, as well as in other filings with the SEC anchor.

To all of you to review the risk factors listed in these documents now I will turn the call over to gardeners, Chairman and Chief Executive Officer Gene Hall.

Good morning, and thanks for joining US today gardeners Q3 financial results were ahead of expectations. The macroeconomic environment remains dynamic with dose changes in federal government and evolving tariff policies.

Craig Safian: I think the base-level assumption, though, should be that we'll grow our headcount three to four points slower than our expected CV growth. Again, back to that outlook or that algorithm, if you will, going forward, so that not only do we fully expect to re-accelerate CV growth based on the people we have in seat today or we exit the year with, the investments we make next year will be to sustain that growth as we roll into 2027, 2028, beyond. And so expectation around continuing to invest in sales force at a rate, call it three to four points slower than the expected CV growth rate is what you should expect. That's great.

We made operational adaptations that are starting to yield results.

We continued to deliver great value to our clients.

Enterprise client retention remains strong and contract renewal rates improved from the second quarter.

Finally, we repurchased more than $1 billion of stock in the quarter, reducing share count by 6% year over year.

AI will be one of the most innovative and pervasive technologies in history.

We're seeing unprecedented demand for help with AI.

And we're meeting that demand.

We're helping tens of thousands of clients.

Craig Safian: And then just as a sort of broader question, in an environment where we're seeing some large headcount reductions at corporations and also AI potentially driving efficiency, so maybe you do need fewer employees, I think, does that sort of change your view on the seat-based model? Would you ever consider going more towards an enterprise-based model? I know that's not been the preference in the past, but just given those dynamics, I just wonder your views on that. Thanks. Yeah, hi, Toni. So if you look at who our clients are. First, we sell to the C-level executives that report to the CEO, so the chief information officer, the chief financial officer, the chief HR officer, the head of supply chain, the general counsel, and so forth. And then we sell to the people that report to them.

<unk> of enterprises across every function.

Every size enterprise every geography in every industry determine how best to use AI. We've developed indispensable insights that are captured in more than 6000 documents and our insights are growing every day.

To put this into perspective, if you read 10 documents per day. It would take about two years just to get through our current library. While enterprise leaders are excited about the prospects of AI. They continue to chase returns on those investments we've catalog to more than 1000, AI use cases spanning roles in industries that out.

Line, which are the highest rois and why these are indispensable insights. In addition, our entire client base has access to our AI driven tool S. Gardner as Gartner enables quick access and generate in-depth summaries of our business and technology insights.

We continue to accelerate and enhance as gardeners capabilities at a rapid pace. Our insights are derived from Gartner is vast pool of proprietary data that is unique highly differentiated and not available in the public domain. This includes data from Gartner ITT metrics, which is the industry's largest key metrics database, our vast online peer network.

Craig Safian: And so you think about the head of data and analytics in the IT department, or head of cybersecurity, or the head of IT operations. And so if you look at those, those are our target client roles. And so as companies have headcount reductions, they still have a CFO. They still have a head of accounting. They still have a CIO. They still have a head of cybersecurity. They have a head of data analytics. They have a head of IT operations. And so the staff reductions that clients are taking doesn't directly affect our clients. In fact, if any clients want help figuring out how do they get more effectiveness out of technology, which plays right to our strengths in terms of helping to achieve those broader headcount reductions. Thank you. Thank you. Our next question comes from George Tong with Goldman Sachs. Your line is open.

Our more than 139000 unique users are more than 500101 client discussions annually and our more than 3 million ratings and reviews of technology and software services all of this and more uniquely positions Gartner is the best source for helping clients determined the right AI tools applications had benefits.

We're also leveraging AI to improve productivity and effectiveness internally.

Gartner is data science team is using our sophisticated proprietary AI model too quickly and systematically determined the topics of greatest interest to our clients. We provided our experts with advanced proprietary AI tools for content production. The amount of content published per analyst is up 31% year over year over <unk>.

Our more than 139000 unique users are more than 500001 on one client discussions annually and our more than 3 million ratings and reviews of technology and software services all of this and more uniquely positions Gartner is the best source for helping clients determine the right AI tools applications had benefits.

Craig Safian: Hi, thanks. Good morning. I want to see if you can elaborate on what your expectations are for how the trajectory of CV improves, if you expect essentially a bottoming in the fourth quarter and then the acceleration across all of 2026, exiting the year in the high single-digit. Just some additional color on the trajectory and pacing of improvement would be great. Hey, George. Good morning. It's Craig. So we'll provide more color on 2026 in February when we do our Q4 earnings and do our initial guide for 2026. You're right from a headline perspective in terms of our expectations, which is to re-accelerate over the course of 2026 into the high single-digit growth rates. And then obviously, our job is not just that one year, but to continue to accelerate the CV beyond that back into double-digit growth, and then ultimately into our medium-term objective range.

We expect this will have a meaningful impact on retention and we've reduced our average publishing time by 75% compared to last year.

We're also leveraging AI to improve productivity and effectiveness internally.

This allows us to respond to changes in the market faster than ever our service delivery teams are leveraging our AI tools to be better prepared for client discussions and our sales teams are using AI to hone their selling skills as.

As we continue to navigate the dynamic external environment are adaptations are beginning to yield results client engagement as a leading indicator of future retention client engagement was up in the quarter client retention is higher than last year productivity of our business development executives, whose sales in new enterprises is drawn and across GTS.

We expect this will have a meaningful impact on retention and we've reduced our average publishing time by 75% compared to last year.

And GBS, our new business pipeline is up double digits.

Gartner conferences is also an important indicator of client value licensed users who attend our conferences retain at higher rates prospects, who attend our conferences convert to clients at higher rates attendee ratings of our conferences are reaching all time highs I recently returned from our 35th annual Symposium Expo in Orlando, Florida.

As we continue to navigate the dynamic external environment are adaptations are beginning to yield results.

Craig Safian: As we've talked about in the past, the growth can be lumpy. It's based on math and based on ups and downs and businesses that push, business that pushes or business that comes in sooner than we expect. Obviously, the compares in the first half of the year are favorable from a CV growth perspective. But we fully expect to accelerate over the course of 2026 into the high single-digit range. Got it. That's helpful. And then sticking with CV, could you give some details on how tech vendors performed? Yeah, George, I'll start, and if Gene has anything to add in, we can throw that in. So we're seeing basically two trends within our tech vendor business. And I alluded to some of this during the prepared remarks. And so if you look at tech vendor broadly, there are subsectors that are not tariff-affected, like software and services.

Engagement is a leading indicator of future retention quite engagement was up in the quarter client retention is higher than last year productivity of our business development executives, who sell to new enterprises is drawn and across GTS and GBS, our new business pipeline is up double digits.

We hosted more than 7000 technology leaders over the four day in person conference you can't find this many senior technology executives gathered together anywhere else attendance at the conference was up 8% year over year, excluding the U S. Federal government in Canada attendees to give the conference a very strong <unk>.

Net promoter score of 75.

<unk> ratings of our conferences are reaching all time highs I recently returned from our 35th annual Symposium Expo in Orlando, Florida, We hosted more than 7000 technology leaders over the four day in person conference you can't find this many senior technology executives gathered together anywhere else.

About one third of the nearly 600 sessions onsite covered the topic of AI, our opening keynote framed the AI journey across two dimensions, AI readiness and human readiness Gartner analysts discussed house Cio's can navigate vendor choices re imagined the workforce and redefined organizational identities to be agents of change.

Attendance at the conference was up 8% year over year, excluding the U S. Federal government in Canada attendees get the conference a very strong net promoter score of 75.

It was our highest rated keynote ever.

Looking ahead advanced exhibitor bookings for our 2026 conferences are strong.

In summary, while the macroeconomic environment remain dynamic garners Q3 financial results were ahead of expectations. We made operational adaptations that are starting to yield results. We continued to deliver great value to our clients enterprise client retention remains strong and contract renewal rates improved for the second quarter and we repurchased more.

About one third of the nearly 600 sessions onsite covered the topic of AI, our opening keynote frame the AI journey across two dimensions, AI readiness and human readiness.

Craig Safian: And there are subsectors that are impacted by tariffs, like hardware, semis, etc. And when we look at the tech sector, it's inclusive of all those things. And so what we're seeing is in the software and services side of the house, our CV growth is high single, low double-digit growth rates, and that's been improving. We've seen improvement across that portfolio, with a particular improvement in small tech software, which has improved probably the most over the last 12 months. But that is somewhat muted by what we're seeing from the tariff-affected pieces of the tech subsector, like hardware and semiconductors. Got it. Very helpful. Thank you. Thank you. Our next question comes from Jason Haas with Wells Fargo. Your line is open. Hey, good morning, and thanks for taking my question.

Analysts discuss chubb's cio's can navigate vendor choices re imagined the workforce and redefined organizational identities to be agents of change it was our highest rated keynote ever.

$1 billion of stock in the quarter.

AI will be one of the most innovative and pervasive technologies in history. Gartner is the best source for clients to determine the right tools and applications for their environments and of course, we continue to help on other mission critical priorities such as cyber security. We're also leveraging AI to improve productivity and effectiveness internally compelling <unk>.

Looking ahead advanced exhibitor bookings for 2026 conferences are strong in.

In summary, while the macroeconomic environment remain dynamic gardeners Q3 financial results were ahead of expectations. We made operational adaptations that are starting to yield results. We continued to deliver great value to our clients enterprise client retention remains strong and contract renewal rates improved for the second quarter, and we repurchased more than.

Value strong demand operational adaptations and modest normalization of the external environment gives us a clear path back to long term sustained double digit growth over the medium term.

$1 billion of stock in the quarter.

I will be one of the most innovative and pervasive technologies in history. Gartner is the best source for clients to determine the right tools and applications for their environments and of course, we continue to help on other mission critical priorities such as cyber security. We're also leveraging AI to improve productivity and effectiveness internally compelling client.

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

Thank you gene and good morning, third quarter contract value or CV grew 3% year over year, excluding the U S. Federal government CV grew 6% financial results in the third quarter were better than expected and we are increasing our guidance for the full year, our client value proposition is unique and compelling our insights product.

Craig Safian: I'm curious, I know it's early, but as your clients start to use Ask Gartner, I'm curious if that's changing the types of reports that they're consuming. And then do you plan to change how your analysts are writing reports, or are there certain reports that do better and are more suited for an environment where you're seeing more of your customers use Ask Gartner? Thank you. Yeah, Jason, I'd say that in terms of what Ask Gartner is doing is not changing what content clients are reading, but it does actually get them to use more content, which we know when they read more content, it actually results in higher retention. And so it's driving not different readership, but more readership.

Value strong demand operational adaptations and modest normalization of the external environment gives us a clear path back to long term sustained double digit growth over the medium term.

Our subscription based they held senior operating executives make better decisions on their journeys to address their strategic priorities, because we sell to leaders across all major enterprise functions in every geography industry and company size, we have a long runway for growth in a large addressable market, we see unique opportunity to create long term.

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

Thank you gene and good morning, third quarter contract value or C. V grew 3% year over year, excluding the U S. Federal government C. V grew 6% financial results in the third quarter were better than expected and we are increasing our guidance for the full year, our client value proposition is unique and compelling our insights products.

Value for our shareholders by repurchasing our stock at an attractive price point in the third quarter, we bought $1 $1 billion in stock, we will generate more free cash flow and have fewer shares outstanding over the course of the next several years this coupled with accelerating growth in 2026 and beyond will create significant value for shareholders.

Craig Safian: And the second part, in terms of changing sort of how we write, we look at this all the time, which is we look at how do clients want to consume documents? Do they want both the structure of the document, how long it is, etc.? And so we're always fine-tuning that. And I'd say that it's a continuous thing. So Ask Gartner will impact that as we look at it. But it's not like we never did that. We always look at, say, what length do people want? Do they want a summary upfront and so forth? What topics do they want to cover? What kind of standard document types like magic quadrants do they want to have? And that stuff's always constantly evolving. Ask Gartner will be one more input into that constantly evolving process. Got it. That makes sense. Thank you.

Third quarter revenue was $1 5 billion up 3% year over year as reported and 1% FX neutral. In addition, total contribution margin was 69% up 90 basis points from last year, EBITDA was $347 million up 2% as reported.

For our shareholders by repurchasing our stock at an attractive price point in the third quarter, we bought $1.1 billion in stock, we will generate more free cash flow and have fewer shares outstanding over the course of the next several years this coupled with accelerating growth in 2026 and beyond will create significant value for shareholders.

<unk> was a three point benefit in the quarter adjusted EPS was $2 76 up 10% from Q3 of last year and free cash flow was $269 million as our year to date performance remains strong.

During the quarter, we made a change in our segment reporting structure most of the insights non subscription revenue is now reported as other revenue in the P&L insights, which is almost 100% recurring subscription revenue remains our largest most profitable operating segment in the earning supplement we provided several quarters of historical data for the new insights.

Craig Safian: And then as a follow-up, I'm curious if you could comment on the non-subscription business. You mentioned, and we've seen in the release that it's been moved to the other segment. So I'm curious how you're thinking strategically about that business. And I know it's been softer recently, so if you could talk about your plans to re-accelerate that, that'd be very helpful. Thank you. Yeah. So that business helps small businesses identify the right software for their business. There are literally millions of small businesses in the US, and then there are many millions more outside. And we serve both those markets. And you can think about things like funeral homes, for example. There's funeral home ERP systems, basically management software. And there are obviously a lot of funeral homes around the world, and that software helps them run the business more effectively.

<unk> was at three point benefit in the quarter adjusted EPS was $2.76 up 10% from Q3 of last year and free cash flow was $269 million as our year to date performance remained strong.

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<unk> revenue in the quarter grew 5% year over year as reported and 4% FX neutral.

Third quarter insights contribution margin was 77% up 30 basis points versus last year.

Contract value was $5 billion at the end of the third quarter up 3% versus the prior year <unk>.

Excluding U S. Federal government CV growth was about 270 basis points faster at around 6%.

Global and CVI in the quarter, excluding U S. Federal government was positive $62 million, a sequential increase of $49 million from Q2. This $49 million improvement is larger than the sequential improvement from Q2 to Q3 last year.

Craig Safian: But if you're a funeral home manager, you're not a software expert. You're not a technology expert. It would be unusual for you to be. And so they need help figuring out what software they want to have. Conversely, if you're making software for one of these segments, it's hard to find the clients. And so the value we provide there is we write all the software, and then we figure out we help the end users figure out which software is best suited for their needs. And then we help the vendors actually connect with those people that are the best fits. So it adds value to both the end users and the technology vendors, and it adds a lot of value to them. So that's kind of the strategic role of the business. Thank you. Thank you. Our next question comes from Surinder Thind with Jefferies.

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Insights revenue in the quarter grew 5% year over year as reported and 4% FX neutral.

Third quarter insights contribution margin was 77% up 30 basis points versus last year.

CV growth was broad based across practices industry sectors company sizes and geographic regions.

Contract value was $5 billion at the end of the third quarter up 3% versus the prior year excluding.

Our combined practices all of the industries, except public sector grew at mid single digit rates energy transportation and banking led the growth CV grew at high single digit or mid single digit rates across all commercial enterprise sizes, we drove double digit or high single digit growth in more than half of our top 10 countries. We.

Excluding U S. Federal government CV growth was about 270 basis points faster at around 6%.

Global and C V I N the quarter, excluding U S. Federal government was positive $62 million.

<unk> increase of $49 million from Q2.

This $49 million improvement is larger than the sequential improvement from Q2 to Q3 last year.

More than $240 million of new business in the quarter, which is down about 4% year over year, excluding U S fed outside of U S fed contracts in quarter renewal rates improved from Q2.

Growth was broad based across practices industry sectors company sizes and geographic regions.

Craig Safian: Your line is open. Thank you. Following up on the earlier question about just the enterprise model and your target clients, what would be the downside of trying to maybe move to an enterprise model where maybe you can get a little bit more penetration or if there's maybe a bit more usage more broadly within the firm that maybe things would be a little bit stickier? Yeah. So as I mentioned before, our target market are the C-level executives that report to the CEO and then their direct reports, and in some cases, their direct reports as well. So think about it as a couple of levels down the organization. That's a small group of people. So if you've got an IT department that has 5,000 people, our target audience wouldn't be all 5,000 people.

Across our combined practices all the industries, except public sector grew at mid single digit rates energy transportation and banking led the growth CV grew at high single digit or mid single digit rates across all commercial enterprise sizes, we drove double digit or high single digit growth in more than half of our top 10 countries.

This largely reflects benefits from the adaptations we've been making.

Nearly all of our U S federal contracts will come up for renewal during 2025 with more than 85%, having transacted in the first three quarters of the year dollar retention year to date was around 46% at September 30th we had approximately $165 million of U S. Federal <unk>.

We had more than $240 million of new business in the quarter, which is down about 4% year over year, excluding U S fed outside of U S fed contracts in quarter renewal rates improved from Q2.

Global technology sales contract value was $3 8 billion at the end of the third quarter up 2% versus the prior year, excluding the U S. Federal government from both periods GTS CV grew about 300 basis points faster or 5% in the quarter Tech vendor CV increased mid single digits with small tech vendor growth continuing to improve.

This largely reflects benefits from the adaptations we've been making.

Nearly all of our U S federal contracts will come up for renewal during 2025 with more than 85%, having transacted in the first three quarters of the year.

<unk> subsectors unaffected by tariffs such as software and services. The CV growth was low double digit or high single digits.

Retention year to date was around 46% at September 30th we had approximately $165 million of U S. Federal <unk>.

Craig Safian: Now, that doesn't mean we couldn't in the future develop products that are designed for that larger group. And we certainly are considering that because it gives us another avenue of growth. But right now, our target clients are more in the senior executives. And so if we have an enterprise license, it doesn't really add because our content is targeted at those specific individuals. If you're, for example, an individual developer in an organization, content on how a CIO organizes their department isn't really useful to you. And so that's kind of why we don't do that today. But again, that's certainly a growth avenue that we're open to in the future. That's helpful. And then, maybe, Craig, when I think about just kind of the cost management side of the equation, I see a little bit of lower stock-based comp, maybe some lower capex.

Wallet retention for GTS was 98% for the quarter.

Global technology sales contract value was $3 $8 billion at the end of the third quarter up 2% versus the prior year, excluding the U S. Federal government from both periods GTS CV grew about 300 basis points faster or 5% in the quarter Tech vendor C. V increased mid single digits with small tech vendor growth continuing to improve.

In the U S federal business wallet retention was more than 100% in quarter contract renewal rates improved from Q2 to Q3.

GTS, new business was down 12% compared to last year and down about 4%, excluding the U S. Federal government TTS quota bearing head count was up 1% year over year as we continued to optimize our territories are regular full set of GTS metrics can be found in our earnings supplement.

Protect subsectors unaffected by tariffs such as software and services. The CV growth was low double digit or high single digits.

Global business sales contract value was $1 2 billion at the end of the third quarter up 7% year over year.

Wallet retention for GTS was 98% for the quarter.

Excluding U S. Federal government GBS CV grew about 160 basis points faster at around 9% half of the major GBS practices grew at double digit or high single digit rates growth was led by the sales legal and finance practices Cvs in CVI was positive $17 million in the third quarter.

<unk> U S federal business, what retention was more than 100% in quarter contract renewal rates improved from Q2 to Q3.

GTS, new business was down 12% compared to last year and down about 4%, excluding the U S. Federal government G. T S quota bearing head count was up 1% year over year as we continued to optimize our territories are regular full set of G. T. S metrics can be found in our earnings supplement.

Craig Safian: How much of that is kind of one-time related to this year, and then how much of that is maybe going to continue on into or benefit 2026? Hey, Surinder. Great question. So, in terms of the OpEx management, we've obviously been, as I think I noted earlier, managing the P&L so that we deliver on our commitments for 2025, but we're also very mindful of making sure that, as we enter 2026, we've got strong profitability and strong free cash flow set up as well. And so what we've been doing is less about the one-time benefits of things and more about the ongoing benefits of things.

Excluding the U S Federal government GBS in CVI was positive $25 million.

Global business sales contract value was $1 $2 billion at the end of the third quarter up 7% year over year.

Wallet retention for GBS was 102% for the quarter in quarter contract renewal rates, excluding U S. Federal government improved from Q2 to Q3, GBS, new business was down 10% compared to last year, excluding the U S. Federal government, new business was down about 4% GBS quota bearing head count was up 5% year over year.

Excluding U S. Federal government G. B S. C V grew about 160 basis points faster at around 9% half of the major GBS practices grew at double digit or high single digit rates growth was led by the sales legal and finance practices.

As with GTS, a regular full set of GBS metrics can be found in our earnings supplement.

S N C D. I was positive $17 million in the third quarter, excluding the U S. Federal government G. B S. N CPI was positive $25 million.

Conferences revenue for the third quarter was $75 million on a same conference basis revenue growth was around 6% FX neutral contribution margin was 37% we held 10 destination conferences in the third quarter as planned.

Craig Safian: And again, the real key for us as we've been managing this is less about what do we save in 2025, more about what does our exit run rate for 2025 look like so that, again, we've got the right people in the right places aligned against the right strategic priorities as we roll into 2026, again, with an expectation that CV growth will re-accelerate during 2026, and obviously, the revenue growth will follow that with a slight lag. But overall, it's really more about "permanent savings" so that we can deliver on our profitability and free cash flow targets and goals going forward. Thank you. Thank you. Our next question comes from Manav Patnaik with Barclays. Your line is open. Thank you. Good morning. My first question, Craig, was it's helpful to obviously, you called out the growth and the non-tariff-impacted being better than the tariff-impacted.

Q3 consulting revenue was $124 million compared with $128 million in year ago period, FX was a benefit of about 200 basis points in the quarter.

Consulting contribution margin was 29% in Q3.

As with GTS, our regular full set of GBS metrics can be found in our earnings supplement.

Labor based revenue was $94 million backlog at September 30th was $195 million, we had one large project, which slipped out of Q3 affecting revenue and backlog.

In contract optimization, we delivered $30 million of revenue in the quarter up 12% versus Q3 of last year and 11% FX neutral our.

Q3 consulting revenue was $124 million compared with $128 million in year ago period, FX was a benefit of about 200 basis points in the quarter.

Our contract optimization revenue is highly variable.

Consolidated cost of services was about flat year over year in the third quarter as reported and down 1% FX neutral SG&A increased 7% year over year in the third quarter was reported at about 6% on an FX neutral basis.

Consulting contribution margin was 29% in Q3.

Labor based revenue was $94 million backlog at September 30th was $195 million, we had one large project, which slipped out of Q3 affecting revenue and backlog.

G&A increased in the quarter compared with 24 as a result of head count growth in 2025 Merit increases.

Craig Safian: Just to frame it, how much of your, I guess, total business is tariff-impacted, the mix, and then within, I guess, tech vendors since you called that out too? Yeah, sure. Hey, good morning, Manav. So on the total business, about 40% of our contract value falls into the intersection that we've identified as tariff-affected. So about 40% of the CV. On the tech vendor side, I don't have that number completely handy. It's probably in the 20% to 30% range. Would be on the tariff-affected side. Obviously, several hardware, semi, etc. companies are long-standing great clients of ours, but the bulk of the business sits in software and services. Got it. And then just, and this might just be a definitional clarification, but you guys talked about pipelines up double digits and things looking improving. But then you had the new business down 4%.

In contract optimization, we delivered $30 million of revenue in the quarter up 12% versus Q3 of last year and 11% FX neutral.

EBITDA for the third quarter was $347 million up 2% from last year as reported.

FX contributed almost three percentage points.

Our contract optimization revenue is highly variable.

We outperformed in the third quarter through modest revenue upside effective expense management and a prudent approach to guidance.

Consolidated cost of services was about flat year over year in the third quarter as reported and down 1% FX neutral.

Depreciation in the quarter of $31 million was up 6% compared to 2024 net.

SG&A increased 7% year over year in the third quarter was reported at about 6% on an FX neutral basis.

Net interest expense, excluding deferred financing costs in the quarter was $15 million.

SG&A increased in the quarter compared with 2024 as a result of head count growth in 2025 Merit increases.

This is favorable by $2 million versus the third quarter of 2024 due to lower interest expense and higher interest income on our cash balances. The Q3 adjusted tax rate, which we use for the calculation of adjusted net income was 23% for the quarter.

EBITDA for the third quarter was $347 million up 2% from last year's reported <unk>.

<unk> contributed almost three percentage points.

We outperformed in the third quarter through modest revenue upside effective expense management and a prudent approach to guidance.

This compares to last year's rate of 26% the tax rate for the items used to adjust net income was 14% for the quarter.

Depreciation in the quarter of $31 million was up 6% compared to 2024 net.

Adjusted EPS in Q3 was $2 76 up 10% compared to Q3 last year.

Net interest expense, excluding deferred financing costs in the quarter was $15 million.

We had 75 million shares outstanding in the third quarter. This is an improvement of about 3 million shares or approximately 4% year over year.

We exited the third quarter was 73 million shares on an unweighted basis.

Craig Safian: So can you just help bridge that gap? Yeah, sure. So as we talked about, obviously, pipeline is an indication of new business performance, but it's not a guarantee of new business performance. What I'd tell you, and which we talked about coming out of last quarter, it's certainly better to be in a position where our new business pipeline is up and up significantly on a year-over-year basis. It does two things for us. One, it reinforces that there continues to be significant demand. And so these are not just random opportunities when we look at the pipeline. It's actually a factored pipeline with named opportunities where a seller has had at least one conversation and usually multiple conversations with the potential end users. And so the demand is still there. Two, it does remain a challenging selling environment.

Operating cash flow for the quarter was $299 million. This compares with $291 million in Q3 2024, adjusting for last year's $300 million of conference cancellation insurance proceeds.

This compares to last year's rate of 26% the tax rate for the items used to adjust net income was 14% for the quarter.

Adjusted EPS in Q3 was $2.76 up 10% compared to Q3 last year.

Capex was $29 million up about $4 million year over year.

This was primarily due to real estate related costs and in line with our expectations.

We had 75 million shares outstanding in the third quarter. This is an improvement of about 3 million shares or approximately 4% year over year we.

Third quarter free cash flow was $269 million. This compares with $265 million in Q3 2024, adjusting for last year's insurance proceeds.

We exited the third quarter was 73 million shares on an unweighted basis.

Operating cash flow for the quarter was $299 million. This compares with $291 million in Q3 2024, adjusting for last year's $300 million of conference cancellation insurance proceeds.

Free cash flow on a rolling four quarter basis was 137% of GAAP net income and 76% of EBITDA. As we previously noted there were several items that affect rolling four quarter net income and free cash flow, including cash taxes on the insurance proceeds in Q4 of 'twenty 'twenty four two.

Capex was $29 million up about $4 million year over year.

This was primarily due to real estate related costs and in line with our expectations.

Two real estate lease termination payments and tax planning benefits. We also had a noncash goodwill impairment charge in Q3 2025. This relates to the digital markets business, which now sits in the other segment adjusting for these items free cash flow on a rolling four quarter basis was 20% of revenue 83% of EBITDA.

Third quarter free cash flow was $269 million. This compares with $265 million in Q3 2024, adjusting for last year's insurance proceeds.

Craig Safian: Maybe modestly better in Q3 than Q2, but still pretty darn challenging. And so we're seeing longer sale cycles. That has continued. We're seeing things kicked up for higher levels of approval. That has continued. But the good news is if we keep building that pipeline and keep working it, we have a high degree of confidence that a significant portion of it will turn into new business for us. And then the other thing I'd note, again, this is why the year-over-year compare is really important. Obviously, we're in the midst of our largest conference season, and we leverage those conferences across the board as a retention vehicle, a brand-building vehicle, an awareness vehicle, but also as a new business vehicle for us as well.

And 154% of GAAP net income.

At the end of the third quarter, we had about $1 4 billion of cash.

Our September 30 debt balance was about $2 5 billion.

Our reported gross debt to trailing 12 month EBITDA was well under two times.

Our expected free cash flow generation available revolver and excess cash remaining on our balance sheet provides ample liquidity to deliver on our capital allocation strategy. Our balance sheet is very strong with $2 $1 billion of liquidity low levels of leverage and almost 90% fixed interest rates.

And 154% of GAAP net income.

Craig Safian: And so the pipeline being up, especially in a quarter where it's a huge number just because of the volumes we drive in the Q4, and it's in support of our busiest and largest conference season, I think is very promising for us. Thank you. Thank you. Our next question comes from Josh Chan with UBS. Your line is open. Hi, good morning, Gene and Craig. Thanks for taking my questions. So jumping off of that last comment that you made, Craig, about Q4, I guess usually it is a big selling season for you guys. Could you just kind of compare the environment now to a normal year or last year? What similarity or differences do you see in the selling environment in this particularly large quarter of selling for you guys?

We repurchased $1 $1 billion of stock during the third quarter.

At the end of the third quarter, we had about $1.4 billion of cash are.

Year to date through the end of September we have purchased around $1 5 billion of our stock.

Our September 30 debt balance was about $2 5 billion.

Our repurchase authorization is about $1 $3 billion.

Our reported gross debt to trailing 12 month EBITDA was well under two times.

We expect the board will refresh the authorization as needed as we continue to repurchase stock we create value for shareholders through EPS accretion and increasing returns on invested capital.

We are increasing our full year guidance to reflect recent performance and trends based on October FX rates, we expect revenue growth to benefit by about 80 basis points and EBITDA growth to benefit by about 165 basis points for the full year.

We repurchased $1 $1 billion of stock during the third quarter.

Year to date through the end of September we have purchased around one $5 billion of our stock.

As a reminder, about one third of our revenue and operating expenses are denominated in currencies other than U S. Dollar.

Our repurchase authorization is about $1.3 billion.

We expect the board will refresh the authorization as needed as we continue to repurchase stock we create value for shareholders through EPS accretion and increasing returns on invested capital.

For insights revenue in 2025, our guidance reflects Q3 contract value, which provides very high visibility for the fourth quarter for conferences, we are basing our guidance on the 53 in person destination conferences, we have planned for 2025, we.

Craig Safian: So it's some of the things we've talked about in the past, which is, again, there still are challenges in the US federal government. Those challenges have not gone away. There are still challenges with tariff-impacted industries. But I'd sort of say, again, as I mentioned earlier, it's better than it was earlier in the year. Worse than last year, but better than it was earlier in the year because now there's some certainty in certain geographies with tariffs, and that's allowing companies to make decisions. So that's a better selling environment for us. And then you have companies that are not impacted by tariffs directly, but they are indirectly impacted because they're often selling to the tariff-impacted companies where they have some small amount of materials that are tariff-impacted that impacts them. And so they're being more careful about their spending.

We have good visibility into current year revenue with the majority of what we've guided already under contract.

For consulting we have more visibility into the next quarter or two based on the composition of our backlog and pipeline as usual.

As a reminder, about one third of our revenue and operating expenses are denominated in currencies other than U S. Dollar.

Contract optimization has had several very strong years in the business remains highly variable.

Our updated 2025 guidance is as follows we expect insights revenue of at least $5.06 billion.

Which is an increase from last quarter and is FX neutral growth of about 4%. We expect conferences revenue of at least $630 million, which is an increase from last quarter and is FX neutral growth of about 6%.

We have good visibility into current year revenue with the majority of what we've guided already under contract.

Craig Safian: But I'd sort of say, all that put together, it's a better environment than it was earlier in the year, which, again, like Craig said, our pipeline is up double digits. And we're feeling like it's, again, not as good as last year, but better than it was earlier this year. And then I would just add to that, Josh, the adaptations we've been making. We feel like we'll yield benefits as well, have started to yield benefits in Q3, and we'll yield benefits in Q4. And then also, fourth quarter, as you noted and I noted earlier, is by far our largest new business quarter, our largest NCVI quarter. It corresponds with our sales and quota year-end. So we have an amazing sales force, and they are all very motivated to finish the year strong.

For consulting we have more visibility into the next quarter or two based on the composition of our backlog and pipeline as usual.

We expect consulting revenue of at least $575 million, which is growth of about 2% FX neutral. This is unchanged from last quarter. We continue to expect at least $210 million of other revenue.

Contract optimization has had several very strong years in the business remains highly variable.

Our updated 2025 guidance is as follows we expect insights revenue of at least $5.06 billion, which.

The result is an outlook for consolidated revenue of at least six $4 $75 billion, which is an increase from last quarter and is FX neutral growth of 3%.

We now expect full year EBITDA of at least one $5 $75 billion up $60 million from our prior guidance.

This reflects full year margins of 24, 3% up from last quarter. We expect 2025 adjusted EPS of at least $12 65, an increase from last quarter for 2025, we expect free cash flow at least 114 5 billion.

We expect consulting revenue of at least $575 million.

Which is growth of about 2% FX neutral. This is unchanged from last quarter. We continue to expect at least $210 million of other revenue.

Craig Safian: And they have a lot of reasons and incentives to finish the year strong as well. And so that all aligns to what we think should be a strong finish to the year. That's great color on that. Thank you both for that. And then I guess if you think about the re-acceleration in 2026 and the different components that drive that, I know some of it is just math. But for the ones that are not math, which ones are you more or less confident in standing here at this point in driving the acceleration in CV in 2026? Yeah, Josh, I think we wouldn't keep banging the drum that we have a high degree of confidence if we didn't have a high degree of confidence in the ones that are more mechanical or math and the ones that are adaptation or market-related.

The result is an outlook for consolidated revenue of at least 6.4 dollars $75 billion, which is an increase from last quarter and is FX neutral growth of 3%.

This reflects a conversion from GAAP net income of 165% our guidance is based on 76 million fully diluted weighted average shares outstanding which incorporates the repurchases made through the end of the third quarter we.

We now expect full year EBITDA of at least 1.5 dollars $75 billion up $60 million from our prior guidance.

We exited Q3 with about 73 million fully diluted shares for.

This reflects full year margins of 24, 3% up from last quarter. We expect 2025 of adjusted EPS of at least $12.65 an increase from last quarter for 2025, we expect free cash flow at least 1.145 billion. This reflects a conversion from GAAP net income of 165%.

For Q4, we expect adjusted EBITDA of at least $400 million.

Our financial results in Q3 were ahead of expectations and we've increased the guidance for 2025.

Contract value, excluding U S federal business grew 6% in the quarter.

Third quarter contract renewal rates, excluding U S. Federal government improved from Q2, and we saw a year over year increase on a sequential and CCI improvement we are positioned to accelerate CV growth in 2026 on a path to long term sustained double digit growth in 2027 and beyond we'll also deploy our capital on share repurchases, which.

Our guidance is based on 76 million fully diluted weighted average shares outstanding which incorporates the repurchases made through the end of the third quarter.

We exited Q3 with about 73 million fully diluted shares for.

For Q4, we expect adjusted EBITDA of at least $400 million.

We'll 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.

Craig Safian: And so, again, as we look at that re-acceleration, it's the same big four categories we talked about last quarter. The good news is on the more speculative ones that we talked about last quarter, which was really the adaptations and things of that nature, we did start to see some benefit in the third quarter. Granted, still challenging selling environment, right? So that is still the macro situation or dynamic selling environment. That's the macro situation. But the combination of the mechanical improvements like US Fed, the continued acceleration of our tech vendor business, tariff-affected being even modestly better than what we've been dealing with this year, and then all the other adaptations that we've already made and will be making is what gives us confidence on that re-acceleration next year. Great. Thank you for the color and the time. Thank you.

Our financial results in Q3 were ahead of expectations and we've increased the guidance for 2025.

Contract value, excluding U S federal business grew 6% in the quarter.

Thank you.

Third quarter contract renewal rates, excluding U S. Federal government improved from Q2, and we saw year over year increase on a sequential and CCI improvement we are positioned to accelerate CV growth in 2026 on a path to long term sustained double digit growth in 2027 and beyond we'll also deploy our capital on share repurchases, which.

Our first question comes from Jeff Mueller with Baird. Your line is open.

Yes, Thanks, and good morning, I heard positive call outs, I think on business development productivity of the new enterprises and quarter contract renewal rates and pipeline.

Can you just comment I guess on Upselling and down selling ex federal government trends and are you starting to see improvement there or are there challenges from like elevated.

The 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.

Seat based churn as we look to the 2026 expected acceleration in CV.

Thank you.

Our first question comes from Jeff Mueller with Baird. Your line is open.

Hey, Jeff It's gene.

What I would say is that the selling environment is as improved modestly and if you guys mentioned the areas I think are the most impacted.

Yes. Thank you good morning, I heard positive callouts I think on business development productivity, the new enterprises and quarter contract renewal rates and pipeline.

So if you look at new sales to new enterprises, those we've been quite.

Can you just comment I guess on Upselling and down selling ex federal government trends and are you starting to see improvement there or are there challenges from like elevated.

Craig Safian: Our next question comes from Jeff Silber with BMO Capital Markets. Your line is open. Thanks so much. I just was wondering if you can talk about the pricing environment, if you can remind us when you institute pricing increases in terms of expectations of pushback, etc. Hey, Jeff, good morning. So the bulk of our price increase globally goes into effect or went into effect a couple of days ago on 1 November. As we've done historically, our normal price increase is around 3% to 4%. We've been over that in some years when inflation was significantly higher, particularly wage inflation, but we're more normalized now. So expectation around 3.5% went into effect earlier this week. And Jeff, if we don't get a lot of pushback on price increase, you think about it.

Doing quite well and there are other parts other parts of the business that are also doing well as you mentioned.

If you look at.

Seat based churn as we look to the 2026 expected acceleration in CV.

A lot of our business comes from Upselling existing enterprises, that's the place that we've been hurt the most is where we have an existing enterprise instead of getting growth, they're able to lose the seats.

Hey, Jeff It's gene.

So what I would say is that the selling environment is as improved modestly and if you guys mentioned the areas I think are the most impacted.

But I'd say overall the environment improved as Q3.

But are you starting to see any sort of change in some of the leading indicators for upselling to existing.

So if you look at new sales to new enterprises.

We've been quite.

I think the.

Yes.

We are see changes I'd say first as I mentioned on the call. Our engagement is going up so the amount of documents people are reading about a one on one conversation with our experts that were having conference attendance conference ratings.

Doing quite well and there are other parts other parts of the business that are also doing well as you mentioned.

If you look at.

A lot of our business comes from Upselling existing enterprises, that's the place that we've been hurt the most is where we have existing enterprise and started getting growth therapy will lose the seats.

All of those as being leading indicators of future demand and all of those indicators are up significantly and we're very happy to see that I think it does over the future.

But I'd say overall, the southern department approved as of Q3.

Craig Safian: We've got a client that's spending $200,000 a year with us, and you increase prices 3% or 4%. You're talking about $6,000 or $7,000. And so their decision isn't about the $6,000 or $7,000. It's what's the value I'm getting from Gartner. Okay. I appreciate that. I know when in your prepared remarks you broke out ex-federal government, but we've had a government shutdown the past month or so. Had things gotten worse and things slowed down because of that? Yeah, a little bit, Jeff. Obviously, we are still conducting business with the federal government. We signed deals during the month of October while the government was shut down. It sort of requires that the people on the other side be deemed as essential employees, and then we can get things done. We're hopeful that this resolves itself. The good news is it's our smallest renewal quarter.

But are you starting to see any sort of change in some of the leading indicators for upselling to existing.

Sorry, Jeff one other thing I'd add is the other key indicator of that.

Aligns with and correlates to upsell is retention.

I think the.

We are seeing changes I'd say first as I mentioned on the call. Our engagement is join us. So the amount of documents people are reading about a one on one conversation with our experts that were having conference attendance conference ratings. If we look at all of those as being leading indicators of future demand and all of those indicators are up.

We noted on the call a few times.

The in quarter retention rates improved from Q2 to Q3.

I'll state the obvious is much easier to upsell into account when they are renewing.

And when they are not and so I think very positive also that we saw an eight quarter improvement in the renewal rates.

And we're very happy to see that it does bode well for future So sorry, Jeff.

Got it thank you both.

The other thing I'd add is the other key indicator of that.

Thank you. Our next question comes from Andrew Nicholas with William Blair. Your line is open.

Aligns with and correlates to upsell is retention and as we can.

Hi, good morning, Thanks for taking my question.

On the call a few times.

It sounds like the volume environment the better.

The in quarter retention rates improved from Q2 to Q3.

I think last quarter you talked about.

I'll state the obvious much easier to upsell into account when they are renewing.

This impacted industries specifically.

And when they are not and so I think it's very possible. So that we saw an eight quarter improvement.

Given update on maybe CV growth there relative to the rest of the business.

Craig Safian: We just came off the federal fiscal year-end, which was Q3. So we only have about 15% of the CV we started the year with remaining to go in the fourth quarter. And as I mentioned, we have secured renewals and new business over the course of October, but it is dependent on whether the agency is deemed as essential or the people we're dealing with are deemed as essential and are working. If they are, we get the deal. If they're not, we're waiting for the deal. I appreciate the caller. Thanks so much. Thank you. Our next question comes from Jasper Bibb with Truist Securities. Your line is open. Hey, good morning, guys. Hoping to get an update on Ask Gartner. Can you share some early indications on customer engagement there?

Renewal rates.

Hey, Andrew Good morning, so the non tariff affected industries as we track them continued.

Got it thank you both.

Thank you. Our next question comes from Andrew Nicholas with William Blair. Your line is open.

To perform about 200 basis points faster from CV growth perspective than the.

Hi, good morning, Thanks for taking my question.

It's half of that so.

Okay.

It's a little bit better than last quarter.

Maybe a little better than the gap, we saw in Q2, but by and large about the same performance wise compared to Q2.

I think last quarter you talked about.

Tariffs impacted industries, specifically can you give an update on maybe CV growth relative to the rest of the business.

Okay. Thank you did I guess it isn't a follow up to that is that.

Hey, Andrew good morning.

To give you any pause.

In terms of your expectation or.

The non tariff affected industries as we track them.

Improvement next year to be part of the way.

<unk> to perform about 200 basis points faster from CV growth perspective than the tariff effect. So.

To back up to high single digit plus.

And contract value growth in 2016 and alleviation.

And just kind of curious how youre thinking about that or if we should gateways and conservatism to that breakeven given how things have trended over the past.

Maybe a little better than we saw in Q2, but by and large about the same performance wise compared to Q2.

Craig Safian: And also, I just wanted to confirm whether that's going to be part of normal license access and not a separate charge because I got a few questions on that this morning. So I just wanted to make sure we clarify there. Yeah. So Ask Gartner has now been rolled out to all of our licensed users. So 100% of our licensed users get it. There is no additional fees included in the base package. And the key impact it's had on our clients is that it's been used by them, and it's increased their overall usage of our content, their overall engagement with us. And so we think it will help with retention as they use to have more engagement. Got it. And then the client count ticked down a little bit quarter over quarter again. Is that primarily on the small tech vendor piece?

So I think the selling environment with tariff impact to companies who are starting to improve.

Okay. Thank you could I guess, if there's any follow up to that is that.

When there was more of an even more uncertainty with tariffs. If you went back a few months ago.

Have you any pause.

In terms of your expectation for <unk>.

Companies are reluctant to make purchase decisions and.

Improvement next year to be part of it.

What we see now is theres more certainty regarding tariffs in certain geographies.

We'll get back up to high single digit plus.

In contract value growth in 2016 and alleviation.

Cause of that now our clients are.

And just kind of curious how you're thinking about that or if we should gateways and conservatism.

Starting to make decisions.

Table to make before and so I would sort of characterize as the tariff impact industries actually I think next year I expect we'll be actually doing better.

Even given the trial, how things have changed over the past couple of months.

So I think the selling environment with tariff impact to companies who are starting to improve.

Theres more tariff certainty and clients are here, how do you deal with it and they still need help with AI cyber security data analytics, all the gaps and so.

When there was more of an even more uncertainty with tariffs. If you went back a few months ago.

Craig Safian: And do you expect client count to stabilize or increase in 2026 if small tech vendor picks up? Hey, Jasper, it's Craig. So the story on the client count remains small tech vendor churn. That's the bulk of it. We're still adding lots of small tech vendors, but continue to churn through some as well that are either going out of business, losing funding, etc. Over the medium term to get back to double-digit CV growth and ultimately 12% to 16% CV growth, we would expect to see over that period stabilization and then modest growth in the enterprise count. It's not necessarily required given that we have historically generated huge amounts of growth and new business from existing clients. We could drive a lot of growth that way. But to get us into the 12% to 16% range, we certainly need significant contribution from new logos as well.

Companies were reluctant to make purchase decisions and what.

I'd say theres, a markedly a market improvement in the.

What we see now is theres more certainty with regard to tariffs in certain geographies because of that now our clients are.

Tariff impacted industries ability to make decisions to buy.

Thank you.

Starting to make decisions there.

To make four and so I would sort of characterize as the tariff impact industries actually I think next year I expect we'll be actually doing better.

Thank you. Our next question comes from Faiza <unk> with Deutsche Bank. Your line is open.

Yes, hi, thank you.

Theres more tariff certainty and clients are here, how do you deal with it and they still need help with AI cyber security data analytics, all the caps up and so.

As a follow up on the improvement on the renewal rate and I'm curious if you're seeing to that just a function of the macro environment or is it more a function of.

I'd say theres, a markedly a market improvement in the.

Selling differently.

Tariff impacted industries ability to make decisions to buy.

The Neal.

<unk> services that you had talked about like cost optimization, a lifestyle play out or not.

Thank you.

Additional color on what drove the improvement.

Our next question comes from Faiza <unk> with Deutsche Bank. Your line is open.

I think it's two factors primarily one is that we have made a lot of adaptations in terms of accelerating the pace of our research. It's other quantity about research et cetera, and so I think a lot of it and how we're selling how we're training our salespeople. So we've made a number of adaptations that I think improve.

Yes, hi, Thank you I wanted to follow up on the improvement on the renewal rate and I'm curious a few things to that.

Function of the macro environment or is it more a function of fewer selling.

Craig Safian: So we would expect that number to go up over time. Got it. Thanks for taking the questions, guys. Thank you. Our next question comes from Scott Wurtzel with Wolf Research. Your line is open. Hey, good morning, guys. Thank you for taking my question. Just one for me. I just wanted to get a little bit more color on the quota-bearing headcount trend, just seeing kind of the increase quarter over quarter in GTS and down quarter over quarter in GBS. Just given that kind of see GBS as being a kind of stronger growth engine for the business, just wondering if you can talk about the dynamics going on there. Thanks. Yeah, sure. Good morning, Scott. So on a quarter-by-quarter basis, I wouldn't read too much into the numbers. It's really dependent on when people leave and when new people come on board to replace them.

Selling differently.

Our ability to tell of those plants and then on top of it as I mentioned, especially on the tariff effects industries, there's less uncertainty in certain geographies and so for those geographies now clients are making decisions about volume for us.

The Neal.

These are services that you talked about like cost optimization allows time play out or not.

Just one color on.

What drove the improvement.

Yes, I think it's two factors primarily one is that we have made a lot of adaptations in terms of accelerating the pace of our research and saw the quantity of our research et cetera, and so I think a lot of it and how we're selling how we're training our salespeople. So we've made a number of adaptations that I think improve.

Understood. Okay, and then just a follow up around sort of it sounds like you've had pretty good expense management. So curious if you. If you can talk a bit more about that and sort of how sustainable that is and how you're sort of balancing investments versus cost.

Our ability to tell of those clients and on top of it as I mentioned, especially on the tariff effects industries.

Optimization.

Good morning, Faiza, it's Craig Thanks for that question so on the expense side.

Less uncertainty in certain geographies and so for those geographies now clients are making decisions about volume for us.

And we've been doing this all year long.

Ensuring that we are appropriately balancing.

Both the Opex and year and also the exit run rate for next year.

Craig Safian: And so there can be a little choppiness there. I think the two things I would highlight is you're looking at net numbers. And so we, as an example, did recalibrate or resize our US federal sales force and have been continuing to do that to make sure it aligns with the new reality of the business there. And so you're looking at a net number. On an ex-US Fed, obviously, the headcount growth would be a little bit higher. And then the second thing I'd say is, as we've talked about in the past, we are always optimizing where that QBH goes. And so whenever we have turnover, we're analyzing the territory that was vacated to determine what the next best action should be with that territory. In some cases, it's a fruitful territory. It's profitable. So we replace the person who left like for like.

While also making sure that we are investing in core areas that we know are ingredients that support catalyze our lead to double digit growth in the future and so.

Versus cost optimization.

Good morning, guys. It's Greg Thanks for that question so on the expense side.

I think we've been very disciplined on the expense side.

We're looking to drive productivity in lots of areas automate wherever possible leverage lower cost geographies wherever possible. All of those things are plays that we've been running for a really long time, we've amped those plays up.

And we've been doing this all year long.

Ensuring that we are appropriately balancing.

Both the Opex in year and also that the exit run rate for next year, while also making sure that we are investing in core areas that we know our ingredients.

And again, we've amped it up even we've amped it up so that we can afford to make investments in key areas and so we fully expect next year to accelerate our CV growth and we fully expect.

Yeah support catalyze our lead to double digit growth in the future and so yes.

I think we've been very disciplined on the expense side we're.

We're looking to drive productivity and lots of areas automate wherever possible leverage lower cost geographies wherever possible. All of those things are pleased that we've been running for a really long time, we've amped those plays up.

Next year also continue to make investments that catalyze that CV growth and sustain that CV growth into the future.

Great. Thank you.

Craig Safian: Other times, we are reallocating within our overall portfolio to make sure that we are aligning our assets and sellers to go after the most profitable, most fruitful opportunities. So within the numbers, just know it's not stable. These people are calling on the same exact accounts as we had a year ago. We're constantly optimizing to make sure that we are optimizing essentially our investment in sales to go after the most profitable long-term opportunities from a growth perspective. Great. Thanks, guys. Thank you. Our last question comes from Ashish Sabadra with RBC Capital Markets. Your line is open. Thanks for taking my question. Just kind of a broader question. As we've had more conversations with customers and prospects, how often does LLM, if any, come up in those conversations as an alternative to Gartner? Thanks. Yeah.

Thank you <unk>.

Next question comes from Toni Kaplan with Morgan Stanley. Your line is open.

And again, we've amped it up even we've wrapped it up so that we can afford to make investments in key areas and so we fully expect next year to accelerate our CV growth and we fully expect next.

Thanks, So much I actually wanted to follow up on that last question just in light of the environment.

What are your expectations for sales head count growth in 2006 for both of those segments. Please.

Next year also continue to make investments that.

Catalyze that CV growth and sustain that CV growth into the future.

Thanks, John and good morning so.

We're in the midst of core and core operational planning for next year.

Great. Thank you.

Thank you. Our next question comes from Toni Kaplan with Morgan Stanley. Your line is open.

There's obviously a wide range of scenarios and outcomes that we are planning around and we've got a wide range of potential investments in areas that comes out of that as well I think the.

Thanks, So much I actually wanted to follow up on that last question just in light of the environment.

Base level assumption should be that we will grow our head count.

What are your expectations for sales head count growth in 2006 for both of the segments. Please.

Three to four points lower than our expected CV growth again.

Thanks, John and good morning so.

Again back to that.

Outlook or that.

We're in the midst of hardcore operational planning for next year.

Craig Safian: So when we talk to clients, the main thing that comes up with regard to AI is helping them with their getting value out of AI, getting an ROI out of AI. So that's the main thing that comes up. If you look at on a deal level, how many deals does a client say, "Hey, I'm thinking about using AI instead of using Gartner"? It would be extremely small. As I talked about in the past, in our system, we actually ask our salespeople to track it. We have follow-up calls with them. We have a lot of interactions. Basically, in terms of when a client actually says, "Hey, I'm thinking about using Gartner versus literally AI," that comes up at a very, very, very small number of transactions. That's great, color.

The algorithm if you will going.

Going forward, so that not only do we fully expect.

There's obviously a wide range of scenarios the outcomes that we are planning around and we've got.

Reaccelerate CV growth based on the people we have in seat today or we exited the year with.

Mid range of potential investment scenarios that comes out of that as well I think the base level assumption should be that we will grow our head count.

The investments we make next year will be to sustain that growth as we roll into 2000, and 728 yard and so expectation around continuing to invest in the sales force at a rate call. It three to four points lower than the expected CV growth rate is what you should expect.

Three to four points lower than our expected CV growth.

Getting back to that.

Outlook or that yes.

That's great and then just as a sort of broader question.

Yes algorithm if you will.

Going forward, so that not only do we fully expect.

In an environment, where we're seeing some large head count reductions that corporations and also AI potentially driving efficiency. So maybe you do need fewer employees like I think like.

Reaccelerate CV growth based on the people we have in seat today or we exit the year with.

Craig Safian: Then as we think about the different insight axis, reference, advisor versus guided, have you seen a difference in retention trend or new business growth across any of those tiers? Thanks. So historically, we've had different levels of retention between reference, advisor, and guided. Those traditional trends have held. They're very similar. So there's no kind of difference than what we've seen historically. That's very helpful, color. Thank you. Thank you. There are no further questions at this time. I'd like to turn the call back over to Gene Hall for closing remarks. Well, here's what I'd like you to take away from today's call. While the macroeconomic environment remained dynamic, our Q3 financial results were ahead of expectations. We made operational adaptations that are starting to yield results. We continue to deliver great value to our clients.

The investments we make next year will be to sustain that growth as it grows at 27 28, and so expectation around continuing to invest in sales force at a rate call. It three to four points slower than we expected CV growth rate is what you should expect.

Does that sort of change your view on the seat based model and would you ever consider calling more towards an enterprise base model I know that's not been the preference in the past, but just.

That's great and then just as a sort of broader question.

Just given those dynamics I just one guy.

In an environment, where we're seeing some large head count reductions that corporations and also AI potentially driving efficiency. So maybe you do need fewer employees.

Your views on that thanks.

Yeah, Hi, Tony So if you look through our clients are.

The first we sell to the C level executives that report to the CEO. So the Chief Information Officer, the Chief Financial Officer, The Chief HR Officer, the head of supply chain and general counsel and so forth and then we sell to the people that report to them and so to think about like the head of data and analytics.

<unk>.

Does that sort of change your view on the seat based model and.

Would you ever consider going more towards an enterprise base model I know, that's not been the preference in the past but.

It Department head of cyber security or the head of operations and so if you look at those those are our target client roles and so as the companies have head count reductions they still have a CFO. They still have ahead of a county, they still have a CIO. They still have a cyber security. They are ahead of data analytics that are ahead of IC operations and so on.

Just given the risk.

Dynamics I just wonder.

Craig Safian: Enterprise client retention remained strong, and contract renewal rates improved in the second quarter. We repurchased more than $1 billion of stock in the quarter. AI will be one of the most innovative and pervasive technologies in history. Gartner is the best source for clients to determine the right AI tools and applications for their environments. Of course, we continue to help on other mission-critical priorities such as cybersecurity. We're also leveraging AI to improve productivity effectiveness internally. Compelling client value, strong demand, operational adaptations, and modest normalization of the external environment give us a clear path back to long-term sustained double-digit growth over the medium term. Thanks for joining us today. We look forward to updating you again next quarter. Thank you for your participation. You may now disconnect. Everyone, have a great day.

Your views on that thanks.

Yeah, Hi, Tony So if you look through our clients are.

The staff reductions that clients are taking doesn't directly affect our.

Our clients in fact training class one help figuring out how they get more effectiveness out of technology, which place retro our strengths in terms of helping to achieve those broader head count reductions.

I T Department head of cyber security or the head of operations.

So if you look at those those are our target client roles and so as the companies have head count reductions they still have a CFO, but you still have ahead of a county, they still have a CIO. They still have a cyber security. They are ahead of data analytics that are ahead of IC operations and so.

Thank you.

Next question comes from George Tong with Goldman Sachs. Your line is open.

Hi, Thanks, Good morning, I wanted to see if you can elaborate on what your expectations are for how the trajectory of CB improves if you expect essentially a bottoming in the fourth quarter and then the acceleration of costs.

The staff reductions that clients are taking doesn't directly affect our.

All of 2026 exiting the year in the high single digits with some additional color on the trajectory and pacing of improvement would be great.

Thank you.

Hey, George Good morning, it's Greg.

Thank you. Our next question comes from George Tong with Goldman Sachs. Your line is open.

So.

We'll provide more color on 2026.

Hi, Thanks, Good morning, I wanted to see if you can elaborate on what your expectations are for how the trajectory of CB improves if you expect.

In February when we do our Q4 earnings and do our initial guide for 2026.

You're right from a headline perspective in terms of our expectations.

Actually a bottoming in the fourth quarter and then the re acceleration of cost.

As to Reaccelerate over the course of 2026 into the high single digit growth rates.

All of 2026 exiting the year in the high single digits with some additional color on the trajectory and pacing of improvement would be great.

And then obviously our job is not just that one year, but to continue.

Hey, George Good morning, it's Greg.

To accelerate the CV beyond that.

So we'll provide more color on 2026.

Back into double digit growth and then ultimately into our medium term objective range.

In February when we do our Q4 earnings and do our initial guide for <unk> for 2026.

<unk>.

As we've talked about in the past the growth.

Can be lumpy.

You're right from a headline perspective in terms of our expectations.

It's based on based on math and based on ups and downs in businesses that push business that pushes our business that comes in sooner than we expect.

As to Reaccelerate over the course of 2026 into the high single digit growth rates.

Obviously the compares in the.

And then obviously our job is not just that one year, but to continue.

The first half of the year are favorable from from.

Two accelerating CV beyond that back.

From a CV growth perspective, but.

Back into double digit growth and then ultimately into our medium term objective range.

We fully expect to accelerate over the course of 2026.

As we've talked about in the past the growth.

The into the high single digit range.

Got it that's helpful and then sticking with CV could you give us some details on how our tech vendors performance.

Can be lumpy.

It's based on based on math and based on ups and downs in businesses that push business that pushes our business that comes in sooner than we expect.

Yeah, George I'll start and if gene has anything to add in we can draw that and so we're seeing.

Obviously the compares in the.

The first half of the year are favorable from from.

Basically two trends within our tech vendor business.

From a CV growth perspective.

And I alluded to some of this.

We fully expect to accelerate over the course of 2026.

The prepared remarks, and so if you look at tech vendor broadly.

Into the high single digit range.

There are sub sectors that are not tariff affected like software and services and there are SaaS sub sectors that are impacted by tariffs like hardware sandys et cetera, and when we look at the tech sector. It's inclusive of all of those things.

Got it that's helpful and then sticking with CV could you give some details on how tech vendors performance.

Yeah, George I'll start and if gene has anything to add in we could draw that and so we're seeing.

Basically two trends within our tech vendor business.

And so what we're seeing is in the software and services side of the house, our CV growth is high single low double digit growth rates and that's been improving.

And I alluded to some of this.

The prepared remarks, and so if you look at tech vendor broadly.

There are sub sectors that are not tariff affected like software and services and there are SaaS sub sectors that are impacted by tariffs like hardware semi is et cetera.

<unk> seen improvement across that portfolio with a particular improvement in small tech software.

Which has improved probably the most over the last 12 months.

But that is somewhat muted by what we're seeing from the tariff effective pieces of of the tech sub sector like hardware and semiconductors.

And when we look at the tech sector, it's inclusive of all those things.

And so what we're seeing is in the software and services side of the house, our CV growth is high single low double digit growth rates and that's been improving we.

Got it very helpful. Thank you.

Thank you. Our next question comes from Jason Haas with Wells Fargo. Your line is open.

We've seen improvement across that portfolio with a particular improvement in small tuck software.

Hey, good morning, and thanks for taking my question I'm curious I know, it's early but as clients start to use apps Gardner I'm curious if that's changing the types of reports that they're consuming and then do you plan to change how your analysts are writing reports are there certain reports that do better.

Yes, which has improved probably the most over the last 12 months.

But that is somewhat muted by what we're seeing from the tariff effective pieces of of the tech sub sector like hardware and.

And are more suited for an environment, where youre seeing more of your customers use ask gartner. Thank you.

In semiconductors.

Got it very helpful. Thank you.

Yes, Jason I think that in terms of what eschar is doing is not changing what content clients are reading, but it does actually get them to use more content, which we know when they read more content at actual result in higher retention.

Thank you. Our next question comes from Jason Haas with Wells Fargo. Your line is open.

And so it's driving not different readership, but more readership and the second part in terms of changing and sort of how we right. We look at this all the time, which was we look at how to clients want to consume documents like do they want both the structure of the document how long it is et cetera, and so we're always fine tuning that and I'd say that.

There are more suited for an environment, where youre seeing more of your customers use thats Gartner. Thank you.

<unk>.

It's a continuous thing so as Gartner will impact that as we look at it but it's not like we never did that we always look at say what linked to people want to they want a summary upfront and so forth what topics that I want to cover what's kind of a standard documents hindsight magic quadrants to they want to have and that's all a constantly evolving aspect will be one more.

And so it's driving not different readership more readership and the second part in terms of changing and sort of how we right. We look at this all the time, which was we look at how to clients want to consume documents like do they want both the structure of the document how long it is et cetera, and so we're always fine tuning that and I'd say that.

Input into the constantly evolving process.

Got it anytime thank you and then in the proppant business could comment on the non subscription business.

You mentioned and we've seen that release that it has been moved to the other segments I'm curious, how you're thinking strategically about that business and it's been softer recently said you were talking about your plan to reaccelerate that that'd be very helpful. Thank you.

It's a continuous thing so as Gartner will impact that as we look at it but it's not like we never did that we always look at say what linked to people want to they want a summary upfront.

And so forth what topics that I'm going to cover what's kind of standard document types like magic quadrants.

Yeah, so that business.

Helps small businesses identify the right software for their business.

I want to have and that's all it constantly evolving but it will be one more input into a constantly evolving process.

There are literally millions of small businesses in the U S. And then there are many millions more outside we serve both those markets and you can think about things like funeral homes for example, Theres funeral home.

Got it that makes sense. Thank you and then on the provinces could comment on the non subscription business.

You mentioned and we've seen really steady.

Then move to the other segment, so I'm curious, how you're thinking strategically about that business.

So from basic management software and there are obviously a lot of funeral homes around the world in a tougher helps run the business more effectively so theres ebbs, but if you're feeling from a manager youre not a software technology expert for be unusual.

No. It's been softer recently said you were talking about your plan to Reaccelerate that that'd be very helpful. Thank you.

Yeah, so that business.

Helps small businesses identify the right software for their business.

And so they need helping out what software they want to have Conversely, if youre, making software one of these segments is hard to find the clients and so on.

There are literally millions of small businesses in the U S. And then there are many millions more outside we serve both those markets and you think about things like funeral homes for example.

The value we provide there is we read all the software and we figure at the.

The end users grew up with software is best suited for their needs and then we help the vendors actually connect with those people that are the best fits so it adds value to both the end users and the.

Funeral home.

Pieces, and basically management software and there are obviously a lot of funeral homes around the world a tougher helps run the business more effectively so theres ebbs, but if you're feeling from a manager youre not a software expert in our technology experts would be unusual.

The technology vendors and Thats, a lot of value to them.

So thats kind of a strategic role of the business.

And so they need helping out what software they want to have.

Thank you.

Inversely, if youre, making software one of these segments, it's hard to find the clients and so what we the value. We provide there is we read all the software and then we figure out we hope.

Thank you.

Our next question comes from surrender Chen with Jefferies. Your line is open.

Thank you following up on the earlier question about just the enterprise model in your target clients.

And users grew up with software is best suited for their needs and then we help the vendors actually connect with those people that are the best fits so it adds value to both the end users and the.

What would be the downside of trying to maybe move to an enterprise model, where maybe you can get a little bit more penetration or.

The technology vendors and that's a lot of value to them.

So thats kind of a strategic role of the business.

If there is maybe a little bit more usage more broadly within the firm that maybe.

Thank you.

Things would be a little bit stickier.

Thank you.

Yeah, so the as I mentioned before our target market or the C level executives that report to the CEO and then their direct reports and in some cases their direct reports as well so think about it a couple of levels down the organization Thats a small group of people. So you've got an it department that has 5000 people in our target.

Our next question comes from surrender Chen with Jefferies. Your line is open.

Thank you following up on the earlier question about just the enterprise model in your target clients.

What would be the downside of trying to maybe move to an enterprise model, where maybe you can get a little bit more penetration or.

Audience wouldn't be all 5000 people now that doesn't mean couldnt, we couldnt in future development.

If there is maybe a little bit more usage more broadly within the firm that maybe.

Alex that are designed for that larger group and we certainly are considering that because just another avenue of growth.

Things would be a little bit stickier.

Yeah, so the as I mentioned before our target market or the C level executives that report to the CEO and then their direct reports and in some cases their direct reports as well so think about it a couple of levels down the organization. That's a small group of people. So you've got an it department that has 5000 people in our target.

But right now our target clients are more of the senior executives and so if we have an enterprise license it doesn't really add.

Because our content is targeted at doses of individuals'. If you for example, an individual developer organization content on how our CIO organizer, Sir Department isn't really useful.

Audience wouldn't be all 5000 people now that doesn't mean, we couldn't in the future development.

And so that's kind of why we don't do that today, but thats certainly.

A growth Avenue that we're open to in the future.

Alex that are designed for that larger group and we certainly are considering that because just another avenue of growth.

That's helpful and then.

But right now our target clients are more of the senior executives and so if we do have an enterprise license it doesn't really add.

Maybe Craig when I think about just kind of the cost management side of the equation.

Because our content is targeted at doses of individuals'. If you for example, individual developer organization content on how our CIO organizer department isn't really useful.

I see a little bit of lower stock based comp maybe.

Maybe some more capex how much of that is kind of one time related to this year and then how much of that is maybe going to continue on into our benefit 2026.

And so that's kind of why we don't do that today and that's certainly.

Hey, sorry under Great question so.

A growth Avenue that we're open to in the future.

In terms of the.

The Opex management.

That's helpful and then.

We've obviously been as I think I noted earlier managing the P&L. So that we deliver on our commitments for 2025, but we're also very mindful of making sure that as we enter 2026, we've got.

Maybe Craig when I think about just kind of the cost management side of the equation.

I see a little bit of lower stock based comp.

Maybe some more capex how much of that is kind of one time related to this year and then how much of that is maybe going to continue on into our benefit 2026.

Drawn profitability and strong free cash flow set up as well.

We've been doing is less about the onetime benefits of things and more about the ongoing benefits of things again, the real key for us as we've been managing this is less about when we save in 2025 more about what is our exit run rate for 2025 look like so that again, we've got the right people.

Hey, sorry under Great question so.

In terms of.

The Opex management.

We've obviously been as I think I noted earlier managing the P&L. So that we deliver on our commitments for 2025, but we're also very mindful of making sure that as we enter 2026, we've got.

In the right places aligned against the right strategic priorities as we roll into 2026 again with an expectation that CV growth will reaccelerate during 'twenty five and obviously the revenue growth will follow that with a slight lag.

Drawn profitability and strong free cash flow set up as well.

<unk> been doing is less about the one time benefits of things and more about the ongoing benefits of things again, the real key for us as we've been managing this is less about when we saved in 2025 more about was our exit run rate for 2025 look like so that again, we've got the right people.

But overall, it's really more about.

<unk> quote unquote permanent savings so that we can deliver on our profitability and free cash flow targets and goals going forward.

Thank you.

In the right places aligned against the right strategic priorities as we roll into 2026 again with an expectation that CV growth will reaccelerate during 2000, <unk> and obviously the revenue growth will follow that with a slight lag.

Thank you. Our next question comes from Manav Patnaik with Barclays. Your line is open.

Thank you good morning.

My first question Craig.

Helpful. Too, obviously, you called out the growth in the non tariff impacted being better than the tariffs impacted just to frame it like how much of the I guess total business as tariffs impacted.

But overall, it's really more about.

Quote unquote permanent savings so that we can deliver on our profitability and free cash flow targets and goals going forward.

Impacted like the mix and then within I guess since you called that out too.

Yeah, sure Hey, good morning Manav.

Thank you.

So on the total business about 40% of our contract value.

Thank you.

Next question comes from Manav Patnaik with Barclays. Your line is open.

<unk> falls into the theater section that we have identified as tariff effects.

Thank you good morning, Mike.

My first question Gregg it's helpful.

Two obviously you called out the growth in the.

So about 40% of the CV on the tech vendor side I don't have that number completely handy, it's probably in the 20% 30% range.

Non tariff impacted being better than the tariffs impacted just to frame it like how much of your I.

I guess total business as tariffs impacted.

Impacted like the mix and then within I guess that kind of since you called that out too.

Would be on the tariff affected side obviously.

Several hardware semi et cetera.

Sure Hey, good morning Manav.

So on the.

Total business about 40% of our contract value.

Companies are long standing and great clients of ours, but the bulk of the business fits with.

<unk> falls into that the intersection that we've identified as tariff effect.

In software and services.

Got it.

So about 40% of the CVA on the tech vendor side I don't have that number completely handy, it's probably in the 20% to 30% range.

And then just.

This might be just be a definitional clarification, but you guys talked about in our pipeline is up double digits and things looking improving.

And then but then you add the new business down 4%. So can you just help bridge bridge that gap yes.

Would be on the tariff affected side obviously.

Several hardware semi et cetera.

Yes sure.

We talked about obviously pipeline.

Companies are long standing clients of ours, but the bulk of the business fits with.

<unk> is an indication of new business performance, but it is not a guarantee of new business performance.

In software and services.

What I would tell you in which we talked about coming out of last quarter, It's certainly better to be in a position, where our new business pipeline is up and up significantly on a year over year basis.

Got it.

And then just.

This might be just be a definition clarification, but you guys talked about in our pipeline is up double digits and things looking improving.

It does two things for us one it reinforces that there continues to be significant demand and so these are not just random opportunities. When we look at the pipeline, it's actually a a factored pipeline with named opportunities where seller has.

And then but then you had the new business down 4%. So can you just help bridge bridge that gap.

Yes sure.

We talked about obviously pipeline.

<unk> is an indication of new business performance, but it's not a guarantee of new business performance.

At least one conversation it usually multiple conversations with a potential end users.

And so the demand is still there to it does remain a challenging selling environment.

May be modestly better in third quarter than second quarter, but still pretty darn challenging and so we're seeing longer sales cycles that has continued we're seeing things kicked up for higher levels of approval that has continued but the good news is if we keep building that pipeline and keep working it we have a high degree of confidence.

At least one conversation that usually multiple conversations with a potential end users.

Is that a significant portion of it will turn into new business for us.

And so the demand is still there to it does remain a challenging selling environment.

And then the other thing I'd note again this is why the year over year areas is really important obviously, we're in the midst of our largest competencies in an.

We leverage those conferences across the board as a retention vehicle of brand building vehicle and awareness vehicle, but also as a new business vehicle for us as well and so the pipeline being up especially in a quarter, where it's a huge number just because of the volumes we drive in the fourth quarter and it's in <unk>.

That.

A significant portion of it will turn into new business for us.

Part of our.

And then the other thing I'd note again this is why the year over year areas is really important obviously, we're in the midst of our largest competencies in an.

Busiest and largest conference season, Yes, I think I think is very promising for us.

Thank you.

Thank you. Our next question comes from Josh Chan with UBS. Your line is open.

We leverage those conferences across the board as a retention vehicle a brand building vehicle and awareness vehicle, but also as a new business vehicle for us as well and so the pipeline being up especially.

Hi, Good morning, Jane and Craig Thanks for taking my questions. So jumping off of that last comment that you made Craig about Q4, I guess, usually it is a big selling season for you guys could you just kind of compare the environment now to like a normal year or last year, what similarity or differences do you see in the selling environment.

A quarter, where it's a huge number just because of the volumes we drive in the fourth quarter and it's in support of our bids.

Busiest and largest competencies and yes, I think I think is very promising for us.

And this particularly large quarter of selling for you guys.

Thank you.

Thank you. Our next question comes from Josh Chan with UBS. Your line is open.

So it's some of the things we've talked about in the past, which is again a similar challenges in the U S. Federal government. The dose challenges have not gone away there are still challenges with tariff impacted industries.

Good morning, Jana and Craig Thanks for taking my questions. So jumping off of that last comment that you made Craig about Q4, I guess, usually it is a big selling season for you guys could you just kind of compare the environment now to like a normal year or last year, what similarity or differences do you see in the selling environment.

But I sort of say again as I mentioned earlier, it's better than it was earlier in the year worse than last year, but that was early in the year. Because now there is some certainty in certain geographies with tariffs and thats, allowing companies to make decisions. So thats, a better selling environment for US and then you have companies that are not impacted by tariffs directly but.

And this particularly large quarter of selling for you guys.

So it's some of the things we've talked about in the past, which is again a similar challenges in the U S. Federal government that those challenges have not gone away.

Indirectly impacted because they are often selling to the sharp impact of companies, where they have some small amount of materials or tariff impact that impacts them and so they're being more there'll be more careful about their spending but that's what I say all that put together, it's a better environment than it was earlier in the year, which again as Craig said, our pipeline is up double digits and we're feeling like it's again.

There are still challenges with tariff impacted industries.

But I would sort of say again as I said earlier, it's better than it was earlier in the year worse than last year, but that was early in the year because now there's some uncertainty in certain geographies with tariffs and that's allowing companies to make decisions. So that's a better selling environment for us and then you have <unk>.

Not as good as last year, but better than it was earlier and then I would just add to that Josh.

<unk> that are not impacted by tariffs directly but indirectly.

The adaptations we've been making.

We feel like will yield benefits as well have started to yield benefits in Q3 and will yield benefits in Q4, and then also fourth quarter is as you noted and I noted earlier is our by far our largest new business quarter, our largest in CVI quarter.

Indirectly impacted because they are often selling to the sharp impact of companies, where they have some small amount materials or tariff impacted ask them and so they're being more there'll be more careful about the spending.

But that's what I say all of that together, it's a better environment than it was earlier in the year, which again why as Craig said, our pipeline is up double digits and we're feeling like it's again not as good as last year, but better than it was earlier this year.

Corresponds with our sales and quota year end. So we have an amazing salesforce and they are all very motivated to finish the year strong and they have a lot of reasons.

Then I would just add to that Josh.

Yeah.

The adaptations we've been making.

And incentives to finish the year strong as well and so that all aligned to what we think should be a strong finish to the year.

We feel like will yield benefits as well have started to yield benefits in Q3 and will yield benefits in Q4.

That's great color. Thank you both for that.

And then also fourth quarter is as you noted and I noted earlier is our by far our largest new business quarter, our largest in CVI quarter.

And then I guess, if you think about the Reacceleration in 2026 and the different components that drive that some of this is just math, but for the ones that are not mask, which ones are you more or less confident in standing here at this point.

Corresponding with our sales and quota year end. So we have an amazing salesforce and they are all very motivated to finish the year strong and they have a lot of reasons.

Driving the acceleration in CV in 2020, Thanks, Yes, Josh I think.

And incentives to finish the year strong as well.

So that all aligns to what we think should be a strong finish to the year.

We wouldn keybanc.

Keep banging the drum that we have a high degree of confidence.

That's great color. Thank you both for that.

We didn't have a high degree of confidence.

And then I guess, if you think about the Reacceleration in 2026 and the different components that drive that some of this it's just math, but for the ones that are not mask, which ones are you more or less confident in standing here at this point and driving that acceleration in CV in 2020.

And the ones that are more mechanical or math and the ones that.

Our adaptation or market related and so you again as we look at that Reacceleration. It's the same big four categories, we talked about last quarter.

The good news is on the more speculative ones that we talked about last quarter, which is really.

Yes, Josh I think.

We wouldn't be key.

Ah patients and things of that nature, we did start to see some benefit in the third quarter, our branded still challenging selling environment right. So.

Keep banging the drum that we have a high degree of confidence.

Yes, if we didn't have a high degree of confidence.

And the ones that are more mechanical or math and the ones that.

That is still the macro situation or dynamic selling environment, that's the macro situation, but the combination of the mechanical improvements like U S fed.

Our adaptation or market related and so again as we look at that Reacceleration. It's the same big four categories, we talked about last quarter.

The continued acceleration of our vendor business.

The good news is on the more speculative ones that we talked about last quarter, which is really.

Tariff the tariff affected being even modestly better than what we've been dealing with this year and then all the other adaptations that we've already made and we will be making is what gives us confidence on that Reacceleration next year.

And Ah patients and things of that nature, we did start to see some benefit in the third quarter, our branded still challenging selling environment right. So.

That is still the macro situation, our dynamic selling environment, that's the macro situation, but the combination of the mechanical improvements like U S fed.

Great. Thank you for the color and the time.

Yeah.

Thank you.

Next question comes from Jeff Silber with BMO capital markets. Your line is open.

The continued acceleration of our vendor business.

Thanks, So much I just was wondering if you can talk about the pricing environment. If you can remind us when you Institute pricing increases in terms of expectations of pushback et cetera.

Hey, Jeff Good morning, so are the bulk of our price increase.

Globally. It goes into a fairer went into effect a couple of days ago on November one.

Great. Thank you for the color and the time.

Yes, as we have done historically, the our normal price increases our normal price increase is around 3% to 4%.

Yeah.

Thank you.

Next question comes from Jeff Silber with BMO capital markets. Your line is open.

We've been over that in some years when inflation was.

Thanks, So much I just was wondering if you can talk about the pricing environment. If you can remind us when you Institute pricing increases in terms of expectations of a pushback et cetera.

<unk> has a higher particularly wage inflation, but were more normalized now so expectation around three 5% went into effect earlier this week and.

Hey, Jeff Good morning, so are the bulk of our price increase.

Jeff We don't get a lot of pushback on price decrease should think about we've got a client is from each $100000 a year with us and increase prices three or 4% youre talking about six or $7000 and so the decision isn't about.

Globally goes into a fatter went into effect a couple of days ago on November one.

Yes, as we have done historically, the our normal price increases our normal price increase is around 3% to 4%.

Six or $7, just what's the value of <unk> <unk>.

Over that in some years when inflation was significantly higher, particularly wage inflation, but were more normalized now so expectation around three 5% went into effect.

Okay I appreciate that I know in your prepared remarks, you broke out ex federal government, but we've had a government shutdown in the past month or so.

Things gotten worse, if things slowed down because of that.

Earlier this week.

We don't get a lot of pushback on price increase to think about it we've got a client of spending $200000 a year with us and increase prices three or 4% youre talking about six or $7000 and so the decision isn't about.

Yes.

A little bit Jeff, obviously, we are still conducting business.

With the federal government, we signed deals during the month of October while the government was shut down on it.

Six or $7000, what's the value.

Okay I appreciate that.

Requires that the people on the other side the deemed as essential employees.

I know in your prepared remarks, you broke out ex federal government, but we've had a government shutdown in the past month or so.

And then we can get things done.

We're hopeful that this resolves itself.

<unk> gotten worse, if things slowed down because of that.

He is.

It's our smallest renewal quarter, we just came off the federal fiscal year end, which was Q3. So we only have about 15% of the.

Yes.

A little bit Jeff, obviously, we are still conducting business.

With the federal government.

<unk>, we started the year with remaining to go in in the fourth quarter.

Signed deals during the month of October while the government was shut down on it.

And as I mentioned, we have secured renewals and new business over the course of October but it is dependent on weather.

Requires that the people on the other side be deemed as essential employees.

And then we can get things done.

We're hopeful that this resolves itself.

The agency has teams as a sense or the people we're dealing with our teams as essential and are working if they are are we get the deal if they're not waiting for the deal.

As is.

Our smallest renewal quarter, we just came off the federal fiscal year end, which was Q3. So we only have about 15% of.

I appreciate the color. Thanks, so much.

Thank you. Our next question comes from Jasper Bibb with tourists Securities. Your line is open.

The CV, we started the year with remaining to go in in the fourth quarter.

And as I mentioned, we have secured renewals and new business over the course of October but it is dependent on weather.

Hey, good morning, guys, hoping to get an update on ask Gartner can you share. Some early indications on customer engagement. There and also I just wanted to confirm whether that's going to be part of normal license access and not a separate charge because I've got a few questions on that this morning. So I just wanted to make sure we clarify that.

The agency is deemed as essential or the people, we're dealing with our teams.

Central and are working if they are we get deal if theyre not.

We're waiting for the deal.

Yes, so as Gartner has now been rolled out to all of our licensed users to 100% of reluctant just to get it. There is no additional fees included in the face of package and the key impact. It's had on our clients is that inquiry just been used by that by them and increase the overall usage of our content overall engage with us and so we think it will.

I appreciate the color. Thanks, so much.

Thank you. Our next question comes from Jasper Bibb with <unk> Securities. Your line is open.

Hey, good morning, guys.

And to get an update on ask Gartner can you share some early indications on customer engagement. There and also I just wanted to confirm whether that's going to be part of normal license access and not a separate charge because I've got a few questions on that this morning. So I just wanted to make sure we clarify that.

The retention as they use type of engagements.

Got it and then the client count ticked down a little bit quarter over quarter again is that primarily on the small tech vendor piece and do you expect client count to stabilize or increase in 2006.

Yes, so as Gartner has now been rolled out to all of our licensed users. So a 100% of our let's just to get it. There is no additional fees included in the base package and the key impact it's had on our clients is that.

Small tech vendor picks up.

Hey, Jasper it's Craig so the the.

The story on the client count remains small tech vendor churn that's.

<unk> just been used by that fiber and increase their overall usage of our content their overall engagement with us and so we think it will help with retention as they use type of engagements.

The bulk of it.

We're still adding lots of small tech vendors, but.

To churn through.

Through some as well that are either going out of business, losing funding et cetera.

Got it and then the client count ticked down a little bit quarter over quarter again is that primarily on the small tech vendor piece and do you expect client counts stabilize or increase in 2006.

Over the medium term.

To get back to double digit CV growth and ultimately 12% to 16% CV growth, we would expect to see over that period stabilization and then modest growth in the enterprise count.

Small tech vendor picks up.

Hey, Jasper it's Craig so.

The story on the client count remains small tech vendor churn that's.

The bulk of it.

Not necessarily required given that we have historically generated huge amounts of growth in new business from existing clients.

Yes, we're still adding lots of small tech vendors, but.

Continue to churn.

Through some as well that are either going out of business, losing funding et cetera.

We can drive a lot of growth that way, but to get us into the.

Over the medium term.

To get back to double digit CV growth and ultimately 12% to 16% CV growth, yes, we would expect to see over that period stabilization and then modest growth in the enterprise count.

Yes, 12% to 16% range, we certainly need.

A significant contribution from new logos as well so we would expect that number to go up over time.

Got it thanks for taking my questions guys.

Not necessarily required given that we have historically generated huge amounts of growth in new business from existing clients.

Thank you. Our next question comes from Scott Wurtzel with Wolfe Research. Your line is open.

Hey, good morning, guys. Thank you for taking my question just one from me I just wanted to get a little bit more color on the quota bearing head count trends, just seeing you know kind of the increase quarter over quarter in GTS and down quarter over quarter in GBS, just given that you know kind of see GBS as being a kind of a stronger growth engine for the business. Just wondering if you can talk about the <unk>.

We can drive a lot of growth that way, but to get us into the.

Yes, 12% to 16% range, we certainly need.

A significant contribution from new logos as well so we would expect that number to go up over time.

Dynamics going on there thanks.

Got it thanks for taking my question.

Yes, sure good morning, Scott so on a quarter by quarter basis, I wouldn't read too much into the numbers, it's really dependent on.

Thank you. Our next question comes from Scott Wurtzel with Wolfe Research. Your line is open.

Hey, good morning, guys. Thank you for taking my question just one from me I just wanted to get a little bit more color on the quota bearing head count trends, just seeing kind of the increase quarter over quarter in GTS and down quarter over quarter in GBS, just given that kind of see GBS as being kind of stronger growth engine for the business. Just wondering if you could talk about the <unk>.

When people leave and when new people come onboard to replace them and so there can be a little choppiness. There I think the two things I would highlight is youre looking at numbers and so we as an example did recalibrate or resize, our U S federal sales.

Dynamics going on there.

<unk> and.

Yes, sure good morning, Scott so on a quarter by quarter basis, I wouldn't read too much into the numbers, it's really dependent on.

And have been continuing to do that to make sure. It aligns with the new reality of the business there and so youre looking at a net number.

On the ex U S fed obviously, the head count growth would be.

When people leave and when new people come onboard to replace them and so there can be a little choppiness. There I think the two things I would highlight as youre looking at numbers and so we as an.

Little bit higher.

And then the second thing I'd say is as we've talked about in the past we are always optimizing where that GBH goes and so whenever we have turnover. We're analyzing the territory that was vacated to determine what the next specs next best actions should be.

<unk> did recalibrate or resize.

Our U S Federal sales force and have been continuing to do that to make sure. It aligns with the new reality of the business there and so youre looking at a net number.

With that territory in some cases, it's a fruitful territory as profitable and so we replace the person who asked the like for like other times, we are reallocating within our overall portfolio to make sure that we are aligning our assets and sellers to go after that.

Yes.

Ex U S, but obviously the <unk>.

That growth would be a little bit higher.

Then the second thing I'd say is as we've talked about in the past.

Are always optimizing where that GBH goes and so whenever we have turnover. We're analyzing the territory that was vacated to determine what the next specs next best action should be with that territory in some cases, it's a fruitful territory.

The most profitable most fruitful opportunities and so within the numbers just know it's not a stable.

These people are calling on the same exact accounts is as we had a year ago, we're constantly optimizing to make sure that we are optimizing essentially are our investment in sales to go after the most profitable long term opportunities from a from a growth perspective.

<unk> is profitable and so we replace the person who asked the like for like other times, we are reallocating within our overall portfolio to make sure that we are aligning our assets and sellers to go after the most profitable most fruitful opportunities and so within the nub.

Great. Thanks, guys.

Yes.

Thank you.

Last question comes from Ashish <unk> with RBC capital markets. Your line is open.

<unk>, Yes, just know it's not a stable.

Thanks for taking my question just kind of a broader question as you've had more conversations with customers and prospects how often does LLM. If any comes up in those conversation as an alternative to about that thanks.

These people are calling on the same exact account says as we had a year ago, we're constantly optimizing to make sure that we're optimizing essentially are our investment in sales to go after the most profitable long term opportunities from a from a growth perspective.

Yes, so when we talk to clients. The main thing that comes up with regard to AI is helping them with their kids.

Great. Thanks, guys.

Getting value out of the aggregate are left for ROI out of AI and so that's the main thing comes up.

Thank you.

Last question comes from Ashish <unk> with RBC capital markets. Your line is open.

If you look at like on a deal level, how many deals do doesn't clients say, hey, im thinking about using AI instead of using Gartner it would be extremely small we track as I talked about the past in our system. We actually asked our salespeople to track. If we have follow up calls we have a lot of interactions and basically.

Yes, so when we talked to clients. The main thing that comes up with regard to AI is helping them with their kids.

When a client actually says hey, I'm thinking about using gartner versus literally AI that jumps out of a very very very small number of transactions.

Value added by arguing for ROI out of AI, and so thats the maintenance comes up.

That's great color and then as we think about the defendant site access referencing <unk> guided.

If you look at like on a deal level, how many deals do does the clients say, hey, im thinking about using AI instead of using Gartner it would be extremely small we track as I talked about the past.

<unk> a difference in retention trend on new business growth across any of those skus.

Our system, we actually asked our salespeople to track if we have follow up calls we have a lot of interactions and basically in terms of when a client actually says hey, I'm thinking about using gartner versus literally AI chips.

So historically, we've had different levels of retrenchment referenced advisor a guided those those traditional trends have held they are very similar.

So there's no kind of.

Different than what we've seen historically.

A very very very small number of transactions.

That's very helpful color. Thank you.

That's great color and then as we think about the defendant site access via <unk> guided.

Okay.

Thank you there are no further questions at this time I would like to turn the call back over to Gene Hall for closing remarks.

A difference in retention trend on new business growth across any of those skus.

Well, here's what I'd like you to takeaway from today's call, while the macroeconomic environment remain dynamic.

So historically, we've had different levels of retrenchment referenced advisor a guided those those traditional trends have held there are very similar.

Our Q3 financial results were ahead of expectations we.

We made operational adaptations that are starting to yield results. We continue to deliver great value to our clients enterprise client retention remained strong at contract renewal rates improved in the second quarter, and we repurchased more than $1 billion of stock in the quarter.

So there's no kind of.

Different than what we've seen historically.

That's very helpful color. Thank you.

Okay.

AI will be one of the most innovative and pervasive technologies history Gartner.

Thank you there are no further questions at this time I'd like to turn the call back over to Gene Hall for closing remarks.

Gartner is the best source for clients to determine the right AI tools and applications for their environments and of course, we continue to help on other mission critical priorities such as cyber security.

Well, here's what I'd like to take away from today's call while the macroeconomic environment remains dynamic our Q3 financial results were ahead of expectations. We made operational adaptations that are starting to yield results. We continue to deliver great value to our clients enterprise client retention remains strong at contract renewal rates improved in the second quarter and we repurchased.

We're also leveraging AI to improve productivity effectiveness internally.

Compelling client value strong demand operational adaptations and modest normalization of the external environment give us a clear path back to long term sustained double digit growth over the medium term.

More than $1 billion of stock in the quarter.

Thanks for joining today, we look forward to updating you again next quarter.

AI will be one of the most innovative and pervasive technologies in history.

Thank you for your participation you may now disconnect everyone have a great day.

<unk> is the best source for clients to determine the right AI tools and applications for their environments and of course, we continue to help on other mission critical priorities such as cyber security.

We're also leveraging AI to improve productivity effectiveness internally.

Compelling client value strong demand operational adaptations and modest normalization of the external environment gives us a clear path back to long term sustained double digit growth over the medium term. Thanks for joining today and we look forward to updating you again next quarter.

Thank you for your participation you may now disconnect everyone have a great day.

Okay.

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