GartnerIT

The company reported adjusted earnings of $4.37 per share, which was well above the $3.76 analysts expected. Sales reached $1.68 billion, a small increase over last year when adjusted for currency swings.

Crucially, the total value of its research contracts grew to $5.3 billion. This is the most important number for the business because it shows that corporate tech leaders are still paying for its insights. The board also added 500 million dollars to its share repurchase plan, which is a way to return cash to shareholders by buying and retiring its own stock. Overall, the business remains a steady generator of cash, even if growth in new contracts is currently in the low single digits.

See the full quarter, and how our tracked metrics did

Source: 8-K filing

Key highlights

• Profit outlook raised: Management increased the full year guidance for adjusted profit to $12.33 per share, up from the $11.75 it expected previously. This raise signals that the company is finding ways to run more efficiently even while total reported revenue fell 0.6% this quarter.
• Business insights segment growing: The insights division, which is the core of the business, grew its revenue 2.1% to $1.29 billion. This is a critical stability point for the company because this segment provides the high profit subscription research that long-term owners rely on.
• Consulting revenue declines: Revenue in the consulting division fell 8.8% to $142 million compared to the same time last year. This drag on the total business was offset by the conferences division, which saw its revenue jump 15.5% to $244 million.
• Share buybacks accelerating: The company spent $547 million to buy back 3.6 million of its own shares during the quarter. This aggressive return of capital is backed by $378 million in free cash flow, which is the actual cash left over after paying for all operations and equipment.
• Contract value growth slow: Total contract value, which measures the future value of all active subscription agreements, grew just 1.7% over last year to $5.3 billion. While this is an increase, it remains well below the company's historical targets for new business growth.

Our take: A solid quarter that proves Gartner can grow profits even when its top-line sales are sluggish. The big jump in earnings per share and the raised full-year outlook show excellent control over costs. While slow contract growth is a minor drag, the massive share buybacks and healthy cash flow keep the long-term case very strong.