Contract Value Growth Moderates
Total contract value increased 2% year-over-year to $5.3 billion on a foreign currency neutral basis, with Global Technology Sales up 1% and Global Business Sales up 3%.
Source: 10-Q Item 2 MD&A
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's Q2 FY2026 results were defined by the February 2026 sale of its Digital Markets business, which caused a modest 1% total revenue decline but enabled significant cost reductions. Management highlighted that while the divestiture reduced revenues, robust 2% growth in Insights and 15% growth in Conferences partially offset the loss. Cost of services and product development fell 8% as headcount decreased, and SG&A expenses also declined, contributing to a 15.7% increase in operating income. The quarter's profitability was further aided by a $5.4 million pre-tax gain on the sale, though higher interest expense partially offset these benefits. The sustainability of margin improvements may depend on continued execution in core segments given softening wallet retention among existing clients.
Revenue
$1.68B
-0.62% YoY
EPS (Diluted)
$4.14
+33.12% YoY
Gross Margin
71.5%
+2.9 pts YoY
Operating Income
$378.52M
+15.72% YoY
Source: SEC XBRL
Gartner (IT) reported Q2 FY2026 revenue of $1.68B, down 0.6% year over year. Operating margin was 22.6%, up 3.2 points from 19.4% a year earlier. IT's fiscal Q2 FY2026 corresponds to calendar Q2 2026.
Last 4 quarters: 4 beats
| Quarter | Actual EPS (USD) | Consensus (USD) | Result |
|---|---|---|---|
| Jun 2026This filing | 4.37 | 3.87 | Beat +13.1% |
| Mar 2026 | 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 $4.37 versus the $3.87 analyst consensus — a +13.1% beat for Jun 2026. Analyst consensus is quoted on the adjusted (non-GAAP) basis the street uses. GAAP diluted EPS for this quarter was $4.14.
3 reported segments · SEC XBRL
Segment revenue totals $1.68B, which is the $1.68B of consolidated revenue on the income statement. The profit column adds up to the consolidated figure as well.
Profit above is reported as gross profit, the measure IT itself discloses in this filing. Each company chooses its own measure here, so these margins are not comparable with another company's.
Compiled by AI from 10-Q Item 2 of this filing
Total contract value increased 2% year-over-year to $5.3 billion on a foreign currency neutral basis, with Global Technology Sales up 1% and Global Business Sales up 3%.
Source: 10-Q Item 2 MD&A
Wallet retention fell to 97% in Global Technology Sales (from 99%) and 99% in Global Business Sales (from 104%), reflecting lower spending levels by existing clients.
Source: 10-Q Item 2 MD&A
Total company headcount decreased 8% year-over-year to 19,285, driven by reductions in the Insights segment and the Digital Markets business, with the largest decreases occurring in the second half of 2025 and first quarter of 2026.
Source: 10-Q Item 2 MD&A
The company repurchased $1.1 billion of its shares during the first six months of fiscal 2026, nearly double the $437 million repurchased in the same period of 2025, contributing to negative stockholders' equity.
Source: 10-Q Item 2 MD&A
Net interest expense rose 89% in the quarter to $22.3 million due to lower average cash balances reducing interest income and higher debt levels from notes issued in November 2025.
Source: 10-Q Item 2 MD&A
Compiled by AI from this SEC filing · 2 high, 2 medium, 1 low
Stockholders' equity turned negative to -$167.3 million as of June 30, 2026, down from $1.53 billion a year ago, primarily due to aggressive share repurchases. This could signal financial vulnerability and increase risk for equity investors.
Source: 10-Q Balance Sheet (XBRL)
Long-term debt rose 21% to $2.98 billion, and the company used $1.1 billion for share buybacks, exceeding operating cash flow of $789 million. The debt-to-equity ratio is negative, highlighting significant financial risk.
Source: 10-Q Balance Sheet (XBRL) and 10-Q Cash Flow (XBRL)
Cash and equivalents fell 32% to $1.49 billion, and the company's liquidity may be strained by continued buybacks and debt service, especially given that current liabilities exceed current assets (current ratio 0.88).
Source: 10-Q Balance Sheet (XBRL) and 10-Q Cash Flow (XBRL)
Insights remains dominant but Consulting revenue dropped 9% in the quarter, and the sale of Digital Markets may reduce diversification. Revenue decline in a high-margin segment could pressure overall growth.
Source: 10-Q Income Statement (XBRL) and Segment Breakdown
Approximately 71% of cash is held outside the U.S., exposing the company to currency fluctuations. Additionally, international operations face geopolitical risks, as noted in the MD&A, which could impact profitability.
Source: 10-Q Item 2 MD&A
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue $B | 1.68 $B | 1.69 $B | -0.62% |
Cost of Revenue $M | 486.91 $M | 531.73 $M | -8.43% |
Gross Profit $B | 1.20 $B | 1.16 $B | +3.52% |
Operating Income $M | 378.52 $M | 327.10 $M | +15.72% |
Net Income $M | 275.50 $M | 240.78 $M | +14.42% |
EPS (Basic) $ | 4.14 $ | 3.12 $ | +32.69% |
EPS (Diluted) $ | 4.14 $ | 3.11 $ | +33.12% |
SG&A Expense $M | 764.59 $M | 776.89 $M | -1.58% |
Answers draw on this SEC filing and the data on this page
Expected release date, analyst estimates & what to watch
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.
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%.
Other companies in IT Consulting & Other Services