Dear Shareholders,
Gartner delivered another outstanding financial performance in 2022. Gartner provides incredible value to our clients. As a result of the value we delivered throughout 2022, we achieved strong performance in revenue, adjusted EBITDA and free cash flow. The growth rates detailed below exclude the impact of foreign exchange, unless otherwise stated.
We generated $5.5 billion of revenue and $1.5 billion of adjusted EBITDA1, representing year-over-year growth of 20% and 19%, respectively. Adjusted EPS was $11.27 in 2022, representing reported growth of 22%. We generated nearly $1 billion in free cash flow, and we returned even more than that to shareholders through our ongoing share repurchase program.
Gene Hall
Chief Executive Officer
Craig Safian
Chief Financial Officer
“At Gartner, we guide the leaders who shape the world. We do this by delivering actionable, objective insight that drives smarter decisions and stronger performance on an organization’s mission-critical priorities.”
1 Reconciliations of all non-GAAP financial measures used in this letter to the most directly comparable GAAP measures are available on investor.gartner.com.
Compelling Client Value Proposition
At Gartner, we guide the leaders who shape the world. We do this by delivering actionable, objective insight that drives smarter decisions and stronger performance on an organization’s mission-critical priorities. We are a trusted advisor and an objective resource for more than 15,000 enterprises in approximately 90 countries and territories — across all major functions, in every industry and enterprise size.
Enterprise leaders face enormous pressure to stay ahead and grow profitably amid constant changes. Whether fueling digital transformation, responding to a global health crisis, implementing large-scale regulatory changes or leading through other unique challenges, business executives continue to face significant disruptive changes, increased volatility and heightened uncertainty. Leaders need help navigating these turbulent times … And they know Gartner is the best source for that help.
Our services often make the difference between success and failure for executives and their enterprises. We help clients succeed with their mission-critical priorities whether they’re in investment mode or reducing costs.
Global Delivery of Products and Services
We continue to deliver products and services globally through three business segments — Research, Conferences and Consulting.
Gartner Research is our largest and most profitable segment. We are uniquely positioned to support enterprise leaders by applying Gartner insight, drawn from our forward-thinking expert analysis, practitioner research on peer best practices and robust data and analytics.
Our research agenda is defined by clients’ needs, focusing on the critical issues, opportunities and challenges they face every day. In 2022, we had more than 460,000 direct client interactions and advised more than 15,000 distinct client enterprises worldwide. Our size and scale enable us to apply our vast resources toward broader and deeper research coverage and to deliver insight to our clients based on their most important, mission-critical priorities.
Enterprise leaders access our research content and advisory services through individual subscription contracts over a defined period. We typically have a minimum contract period of 12 months for our research and advisory subscription contracts and, at December 31, 2022, over 70% of our contracts were multiyear agreements.
Gartner Conferences provides enterprise executives and their teams the opportunity to learn, share and network. From our Gartner Symposium/Xpo series, to industry-leading conferences focused on specific business roles and topics, to peer-driven sessions, our offerings enable attendees to experience the best of Gartner insight and guidance.
During 2022, we were successful at returning to in-person conferences for the first time since the pandemic began in March 2020. Gartner successfully held 25 in-person and 16 virtual conferences with more than 60,000 attendees, including eight Symposiums/Xpos.
Gartner Consulting serves senior executives leading technology-driven strategic initiatives as an extension of our IT Research business. Through custom analysis and on-the-ground projects we enable deeper support on our clients’ mission-critical priorities. We provide actionable solutions for a range of IT-related priorities, including IT cost optimization, digital transformation and IT sourcing optimization.
Growth and People
Our market opportunity is vast across all sectors, sizes and geographies, and we're delivering more value than ever. Gartner is a growth company powered by our people. Our people are our most important resource, enabling our long track record of global growth. We attract and hire a diverse array of highly talented individuals. We support these individuals throughout their Gartner career with learning and development opportunities, wellness support, meaningful benefits and outstanding rewards for strong performances. At December 31, 2022, we had more than 19,500 associates globally.
Over the past few years, our hiring has been carefully calibrated to demand, and we are well positioned from a talent perspective heading into 2023. Our ongoing investments in our teams will drive long-term, sustained double-digit growth.
We continually renew our commitment to our people by seeking to optimize our recruitment and professional development processes, create networking and educational opportunities, celebrate heritage and history, celebrate community service and create safe spaces for all employees. Our human capital management strategies are developed by executive management and overseen by the Compensation Committee of our Board of Directors.
Strong Results and Future Outlook
Our results were strong across the business in 2022. Our Research segment ended 2022 with revenue of $4.6 billion, an increase of 16% year over year. At the end of the year, contract value was $4.7 billion, an increase of 12% year over year.
Global Technology Sales (GTS) serves leaders and their teams within IT and represents almost 80% of our total contract value. GTS contract value at year end was $3.6 billion, an increase of 10% versus the prior year.
Global Business Sales (GBS) supports all the enterprise functions beyond IT. This includes HR, Supply Chain, Marketing, Finance, Legal, Sales and more. GBS represents more than 20% of our total contract value. GBS contract value increased a strong 19% year over year to end 2022 at $1.0 billion.
Gartner Conferences provides great value to our clients. In 2022, Conferences revenue was $389 million, an increase of 90% for the full year as we were able to begin our return to in-person conferences.
Consulting revenue was $482 million, an increase of 22% for the full year with strong performances across the business in 2022.
Looking ahead we are well positioned for long-term, sustained double-digit growth, and we will continue to focus on strong execution. In 2022, Gartner drove outstanding results in terms of revenue, profits and free cash flow. Contract value growth accelerated, giving us great momentum across our business. We’ve increased hiring to drive future growth. And we continue to put our capital to work on behalf of our shareholders, repurchasing almost $2.7 billion worth of our stock over the past two years.
We will continue to deliver unparalleled value to our clients, staying focused on strong, operational execution and continuous improvement and innovation so that we get better, faster and stronger every year.
Looking out over the medium term, our outstanding financial model and expectations are unchanged. We expect to deliver Research contract value growth of 12% to 16% and double-digit revenue growth. With gross margin expansion, sales cost growing in line with CV growth over time and G&A leverage, we can modestly expand margins from 2023. With our modest capital expenditure needs and the benefit of clients paying us upfront for our services, we plan to grow free cash flow at least as fast as adjusted EBITDA. Finally, we’ll continue to deploy our capital on share repurchases, which will lower the share count over time, and on strategic value-enhancing tuck-in M&A.
On behalf of everyone at Gartner, we thank you for your support.
Gene Hall
Chief Executive Officer
Craig Safian
Chief Financial Officer
As a Gartner shareholder, you’re invited to take advantage of shareholder services or to request more information about Gartner.
Investor Relations Contact Information To contact Gartner Investor Relations, call +1 203 316 6537. We can be contacted during U.S. East Coast business hours to answer investment-oriented questions about Gartner.
In addition, you can write us at: Gartner Investor Relations 56 Top Gallant Road P.O. Box 10212 Stamford, CT 06904-2212 USA Or send us an email at [email protected]. To get financial information online, visit investor.gartner.com.
On behalf of the Board of Directors and Management of Gartner, Inc., you are invited to attend our 2023 Annual Meeting of Stockholders to be held on Thursday, June 1, 2023, at 10 a.m. Eastern Time, via live audio webcast over the internet at www.virtualshareholdermeeting.com/IT2023. Stockholders or their legal proxy holders can participate, submit questions, vote, and examine our stockholder list at the Annual Meeting by visiting www.virtualshareholdermeeting.com/IT2023 and using a valid control number. As always, we encourage you to vote your shares prior to the Annual Meeting.
Sincerely,
Eugene A. Hall
Chief Executive Officer
Content such as financial tables, graphs, and other numerical data that followed the letter, as well as the proxy statement and other formal notices, have been excluded as they are not part of the shareholder's letter.
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