Research and advisory specialist Gartner (IT 1.34%) announced its first-quarter 2024 results on Tuesday, April 30, highlighting its capability to exceed analyst expectations for both earnings per share (EPS) and revenue. Adjusted EPS was reported at $2.93, surging past the analysts' consensus prediction of $2.53. Similarly, revenue stood at $1.5 billion, slightly above the forecast of $1.47 billion.
Despite a beat on these fronts, the firm encountered a year-over-year decline in net income and diluted EPS, spotlighting increased costs or potential underlying issues that might need investors' attention.
| Metric | Q1 2024 | Analyst Estimates | Q1 2023 | Change (YOY) |
|---|---|---|---|---|
| Revenue | $1.5 billion | $1.47 billion | $1.41 billion | 4.5% |
| Net income | $211 million | $203.5 million | $296 million | (28.8%) |
| EPS (diluted) | $2.67 | N/A | $3.68 | (27.4%) |
| Adjusted EPS | $2.93 | $2.53 | $2.88 | 1.7% |
| Operating cash flow | $189 million | N/A | $165 million | 14.7% |
| Free cash flow | $166 million | N/A | $144 million | 15.8% |
Analyst source: FactSet. EPS = Earnings per share. YOY = Year over year.
About Gartner
Gartner has gained an enviable reputation for its in-depth research, advisory services, and conferences, serving as a critical decision-making resource across all industries and functions. Founded in 1979, the company has continually evolved to address the dynamic needs of its global client base. Recent strategic focuses have honed in on proprietary research quality, leveraging its brand strength, and diversifying its business model to not only weather market fluctuations but also to achieve solid growth.
Quarterly highlights
Despite the backdrop of global economic uncertainties, Gartner's first quarter of 2024 showcased its resilience and strategic prowess. The company not only exceeded analyst predictions in terms of revenue and adjusted EPS, but it also noted significant developments across its business segments:
- The Research segment, being its largest, grew revenue by 4.2% year over year to $1.27 billion.
- The Conferences segment, indicative of a recovery in post-pandemic engagement, expanded by 8.4%.
- The Consulting segment exhibited a 6% year-over-year revenue increase, underscoring the growing demand for Gartner's advisory services.
Moreover, the company faced challenges such as a decrease in net income and diluted EPS year over year, underscoring the impact of increasing operational costs. Despite this, Gartner demonstrated strong profitability and liquidity improvements, evidenced by a significant increase in operating and free cash flow.
Looking ahead
Gartner's management has provided a mixed financial outlook for the upcoming quarters, calling for full-year adjusted EPS of $10.90 (down 4% from 2023's total) and 2024 revenue of $6.2 billion (up 5% from 2023). That suggests the company will continue to deal with increased costs. Gartner is also in the midst of a robust share repurchase program that expects to buy back $1.06 billion in shares in 2024.
Investors should keep an eye on the company's ability to manage operational costs, diversify its service offerings, and leverage its global network of expertise to maintain growth momentum. Any notable changes in forward guidance, segment performance, and global market conditions will be key factors to monitor as Gartner navigates through the rest of 2024.
