Gartner, Inc. IT has reported better-than-expected fourth-quarter 2024 results.
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The company’s adjusted earnings per share of $5.6 beat the Zacks Consensus Estimate by 69.3% and increased 79.3% from the year-ago quarter. Revenues of $1.7 billion surpassed the consensus estimate by 1.8% and improved 8.1% year over year.
The IT stock has gained 16.6% in a year, outperforming the 7.8% rally of the industry it belongs to.
Gartner, Inc. Price, Consensus and EPS Surprise
Gartner, Inc. price-consensus-eps-surprise-chart | Gartner, Inc. Quote
Gartner’s Revenues by Segments
Revenues in the Research segment were $1.3 billion, which grew 5.4% from the year-ago quarter on a reported basis and 5.7% on a foreign-currency-neutral basis. The gross contribution margin was 74.1%, which amounted to a gross contribution of $972 million in the fourth quarter of 2024.
Conferences’ revenues were $251 million, which increased 17.2% year over year on a reported basis and 17.1% on a foreign-currency-neutral basis. The gross contribution margin was 47.6%, which logged a gross contribution of $120 million.
Revenues in the Consulting segment amounted to $153 million, which increased 19.3% from the year-ago quarter on a reported basis and 19.2% on a foreign-currency-neutral basis. The gross contribution margin was 35.1% in the reported quarter, which amounted to a gross contribution of $54 million.
Gartner’s Operating Performance
Adjusted EBITDA of $417 million moved up 8% from the year-ago quarter on a reported basis and 8.9% on a foreign-currency-neutral basis.
Balance Sheet & Cash Flow of IT
Gartner had $1.9 billion in cash and cash equivalents at the end of the quarter compared with $1.8 billion at the end of the preceding quarter. The long-term debt was $2.5 billion, flat with the third quarter of 2024.
The operating cash flow totaled $335.4 million and the free cash flow utilized was $110.2 million in the reported quarter. Capital expenditure totaled $8.1 million.
Gartner’s 2025 Outlook
For 2025, the company has raised the guidance for total revenues and expects it to be at least $6.55 billion compared with the preceding quarter’s view of $6.23 billion. The guidance is lower than the Zacks Consensus Estimate of $6.73 billion.
IT has lowered the guidance for adjusted earnings per share to at least $11.45 from the $11.75 provided in the preceding quarter. The guidance is lower than the Zacks Consensus Estimate for earnings of $13.21.
The adjusted EBITDA guidance has been lowered to at least $1.51 billion from the $1.52 billion given in the previous quarter. The free cash flow guidance is reduced to at least $1.14 billion from the $1.35 billion provided in the preceding quarter.
Gartner carries a Zacks Rank #4 (Sell) at present.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Snapshot of Peers
Broadridge Financial Solutions, Inc. BR reported impressive second-quarter fiscal 2025 results.
BR’s adjusted earnings of $1.6 per share outpaced the consensus mark by 12.2% and increased 69.6% from the year-ago quarter. Total revenues of $1.6 billion surpassed the consensus mark by 3% and rose 12.8% year over year.
Automatic Data Processing, Inc. ADP posted impressive second-quarter fiscal 2025 results.
ADP’s earnings per share of $2.4 beat the consensus estimate by 3.5% and increased 10.3% from the year-ago quarter. Total revenues of $5.1 billion surpassed the consensus estimate by 1.6% and grew 8.1% on a year-over-year basis.
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