Gartner’s fourth quarter results were marked by a negative market reaction, despite meeting Wall Street’s revenue expectations and posting better-than-expected non-GAAP profit. Management cited a more challenging selling environment, shaped by external pressures such as government spending constraints, evolving trade policies, and budget uncertainty among tech clients not focused on artificial intelligence. CEO Eugene Hall acknowledged, “The value bar is higher, but it's also a huge opportunity for us,” highlighting that clients are scrutinizing purchases more closely and extending decision cycles, especially in sectors affected by government efficiency pushes and tariffs.
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Gartner (IT) Q4 CY2025 Highlights:
- Revenue: $1.75 billion vs analyst estimates of $1.75 billion (2.2% year-on-year growth, in line)
- Adjusted EPS: $3.94 vs analyst estimates of $3.51 (12.2% beat)
- Adjusted EBITDA: $436.3 million vs analyst estimates of $415.1 million (24.9% margin, 5.1% beat)
- Operating Margin: 19.1%, in line with the same quarter last year
- Constant Currency Revenue was flat year on year (8.3% in the same quarter last year)
- Market Capitalization: $11.51 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Gartner’s Q4 Earnings Call
- Jeffrey Meuler (Baird) asked about the drivers behind expected contract value acceleration in 2026. CEO Eugene Hall explained that both reduced federal government headwinds and recent operational changes are expected to contribute, emphasizing early signs of higher client engagement.
- Andrew Nicholas (William Blair) requested clarity on the pace and timing of contract value growth. CFO Craig Safian confirmed acceleration is expected throughout the year, particularly in the back half, as transformation initiatives gain traction.
- Toni Kaplan (Morgan Stanley) questioned whether AI was affecting client renewal decisions. Hall replied that AI is the top client concern, but clients are not substituting Gartner with AI tools; instead, engagement on AI topics is rising.
- Scott Wurtzel (Wolfe Research) inquired about sales strategy changes. Hall described investments in AI-based sales training and modest expansion of business developer roles to strengthen new business generation.
- Surinder Thind (Jefferies) asked about confidence in medium-term targets given persistent disruption. Hall acknowledged that benefits from current changes will take a few years to be fully realized, but early indicators are positive.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will look for (1) clear evidence of contract value acceleration outside the U.S. federal sector, (2) improved client retention and higher renewal rates driven by AskGartner and new research delivery models, and (3) stabilization or improvement in external sectors affected by tariffs and budget pressures. Execution of the digital markets divestiture and visible progress in salesforce productivity will also be key indicators.
Gartner currently trades at $161.22, down from $202.40 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).
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