Computed from published fixed rules, not a model's judgement — though one input, the count of high-severity risks, comes from the AI analysis below.
Not investment advice and not a price target: it scores the quarter's fundamentals, not the stock. Full methodology →
AI Takeaway
Gartner (IT) delivered a strong Q1 2026 with operating income up 13.7% YoY to $316.1M and EPS surging 17.3% to $3.18 diluted, despite a slight 1.5% revenue decline to $1.51B, driven by aggressive cost discipline and record share buybacks of $534.6M.
Revenue
$1.51B
-1.51% YoY
EPS (Diluted)
$3.18
+17.34% YoY
Gross Margin
71.9%
+2.5 pts YoY
Operating Income
$316.09M
+13.69% YoY
Source: SEC XBRL
Gartner (IT) reported Q1 FY2026 revenue of $1.51B, down 1.5% year over year. Operating margin was 20.9%, up 2.8 points from 18.1% a year earlier. Operating cash flow was $391.04M, up 24.7% year over year. IT's fiscal Q1 FY2026 corresponds to calendar Q1 2026.
Last 4 quarters: 4 beats
| Quarter | Actual EPS (USD) | Consensus (USD) | Result |
|---|---|---|---|
| Jun 2026 | 4.37 | 3.87 | Beat +13.1% |
| Mar 2026This filing | 3.32 | 3.00 | Beat +10.6% |
| Dec 2025 | 3.94 | 3.61 | Beat +9.1% |
| Sep 2025 | 2.76 | 2.50 | Beat +10.4% |
Adjusted (non-GAAP) EPS of $3.32 versus the $3.00 analyst consensus — a +10.6% beat for Mar 2026. Analyst consensus is quoted on the adjusted (non-GAAP) basis the street uses. GAAP diluted EPS for this quarter was $3.18.
Compiled by AI from this SEC filing
Total revenue declined 1.5% YoY to $1.51B, yet gross profit grew 2.0% to $1.09B as gross margin expanded 246 basis points to 71.9%, reflecting a favorable shift in revenue mix and a 9.6% reduction in cost of revenue from $475.0M to $429.3M.
Source: 10-Q Income Statement
Operating income rose 13.7% YoY to $316.1M, with operating margin expanding approximately 280 basis points to 20.9%, as SG&A expenses remained nearly flat at $726.3M (-0.5% YoY), demonstrating effective cost management relative to revenue.
Source: 10-Q Income Statement
Operating cash flow increased 24.7% YoY to $391.0M, significantly outpacing net income of $222.3M, indicating high earnings quality and strong cash conversion. Free cash flow (operating cash flow less capex implied by investing activities) was robust, supporting capital return activities.
Source: 10-Q Cash Flow Statement
The company repurchased $534.6M in shares during Q1 2026, a 228.7% increase from $162.7M in Q1 2025, which drove financing cash outflows of $527.5M and contributed to the dramatic decline in stockholders' equity from $1.50B to just $63.4M.
Source: 10-Q Cash Flow Statement & Balance Sheet
Long-term debt rose 21.0% YoY to $2.98B, while stockholders' equity collapsed 95.8% to $63.4M, resulting in an extremely elevated debt-to-equity ratio of ~119.8x. Total liabilities grew 8.7% to $7.59B, reflecting the company's leveraged capital return strategy.
Source: 10-Q Balance Sheet
Compiled by AI from this SEC filing · 2 high, 3 medium, 0 low
Stockholders' equity has fallen to just $63.4M from $1.50B a year ago, while long-term debt stands at $2.98B, producing a debt-to-equity ratio of approximately 119.8x. This extreme leverage leaves the company highly vulnerable to interest rate increases, credit market disruptions, or any deterioration in operating cash flows. A current ratio of 0.94 (below 1.0) further signals that current liabilities exceed current assets.
Source: 10-Q Balance Sheet
Revenue declined 1.5% YoY to $1.51B in Q1 2026, reversing prior growth trends. If this contraction persists or accelerates, the company's ability to service its growing debt load and sustain its buyback program could be challenged. The revenue decline may reflect softening enterprise IT spending or subscription renewal headwinds.
Source: 10-Q Income Statement
The company deployed $534.6M in share repurchases in a single quarter, a 228.7% increase YoY, while cash and equivalents fell 20.3% to $1.67B. With a current ratio below 1.0 and substantial near-term liabilities, continued buybacks at this pace could strain liquidity if operating cash flows weaken.
Source: 10-Q Cash Flow Statement & Balance Sheet
Total assets declined 9.7% YoY to $7.66B, while current assets fell 11.7% to $3.65B. The simultaneous erosion of the asset base and equity cushion reduces the company's financial flexibility and ability to absorb unexpected shocks or pursue strategic investments.
Source: 10-Q Balance Sheet
With long-term debt up 21.0% YoY to $2.98B and an extremely thin equity base, any increase in borrowing costs or need to refinance existing debt at higher rates could materially impact net income and free cash flow. The company's net margin of 14.7% provides limited buffer against rising interest obligations.
Source: 10-Q Balance Sheet & Income Statement
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue $B | 1.51 $B | 1.53 $B | -1.51% |
Cost of Revenue $M | 429.31 $M | 475.03 $M | -9.63% |
Gross Profit $B | 1.09 $B | 1.07 $B | +1.97% |
Operating Income $M | 316.09 $M | 278.03 $M | +13.69% |
Net Income $M | 222.34 $M | 210.94 $M | +5.41% |
EPS (Basic) $ | 3.19 $ | 2.73 $ | +16.85% |
EPS (Diluted) $ | 3.18 $ | 2.71 $ | +17.34% |
SG&A Expense $M | 726.35 $M | 730.31 $M | -0.54% |
Answers draw on this SEC filing and the data on this page
Gartner's Q2 FY2026 revenue edged down 1% due to the Digital Markets sale, but net income rose 14% to $275.5 million on cost reductions and a gain on divestiture.
IT (Gartner) delivered FY2025 revenue growth of 3.7% to $6.50B, but net income fell sharply by 41.8% to $729M, primarily driven by a surge in share buybacks and higher SG&A costs that compressed margins and eroded stockholders' equity by 76.5%.
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