Gartner ((IT)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Gartner’s recent earnings call for Q3 2025 painted a picture of robust financial health, marked by significant gains in revenue and earnings per share (EPS). The company demonstrated strong client engagement and retention, with a notable demand for AI insights. However, challenges were noted in U.S. federal contracts and certain tariff-impacted industries, alongside a decline in new business and consulting revenue.
Strong Financial Performance
Gartner’s financial results for the third quarter of 2025 exceeded expectations, with revenue reaching $1.5 billion, a 3% increase compared to the previous year. The adjusted EPS saw a 10% rise, reaching $2.76, showcasing the company’s ability to enhance profitability amidst a challenging economic landscape.
Significant Share Repurchase
In a strategic move to enhance shareholder value, Gartner repurchased over $1 billion worth of its stock during the quarter. This initiative resulted in a 6% reduction in share count year-over-year, reflecting the company’s confidence in its financial stability and future growth prospects.
Enterprise Client Engagement and Retention
Gartner reported strong enterprise client retention, with improved contract renewal rates from the previous quarter. The company also noted an increase in client engagement, with conference attendee ratings reaching unprecedented highs, indicating a positive reception to Gartner’s offerings.
AI Demand and Development
The demand for AI insights remains high, with Gartner responding by developing over 6,000 AI insights documents. The company continues to enhance its AI-driven tool, AskGartner, positioning itself as a leader in providing AI solutions and insights to its clients.
Challenges with U.S. Federal Government Contracts
Gartner faces challenges with U.S. federal contracts, as nearly all are due for renewal in 2025. The dollar retention rate year-to-date was around 46%, indicating potential hurdles in maintaining these contracts moving forward.
New Business Decline
The company experienced a decline in new business, with more than $240 million in new deals during the quarter, down approximately 4% year-over-year, excluding U.S. federal government contracts. This decline highlights areas where Gartner may need to focus on regaining momentum.
Tariff Impacted Industries
Industries affected by tariffs continue to pose challenges for Gartner, with these sectors showing slower growth in contract value compared to non-tariff impacted industries. However, modest improvements have been noted, suggesting a gradual recovery.
Consulting Revenue Decrease
Gartner’s consulting revenue saw a slight decrease, with Q3 figures at $124 million compared to $128 million in the same period last year. This decline underscores the need for strategic adjustments in the consulting segment.
Positive Outlook and Guidance Increase
Looking ahead, Gartner has raised its full-year guidance, forecasting at least $6.475 billion in revenue and $1.575 billion in EBITDA. The company anticipates sustained double-digit growth, supported by operational adaptations and a more stable external environment.
In summary, Gartner’s Q3 2025 earnings call highlighted a strong financial performance, driven by increased revenue and EPS, alongside strategic share repurchases. While challenges persist in certain areas, the company’s positive outlook and increased guidance reflect confidence in its growth trajectory. Investors and stakeholders will be keenly watching how Gartner navigates these challenges and capitalizes on opportunities in the coming quarters.