Gartner's (NYSE:IT) third-quarter results gave evidence that its growth-through-acquisition strategy is creating value for clients and shareholders alike.

Gartner results: The raw numbers

Metric

Q3 2017

Q3 2016

Year-Over-Year Change

Revenue

$828.085 million

$574.059 million

44%

Adjusted net income

$59.516 million

$48.225 million

23%

Adjusted EPS

$0.65

$0.58

12%

Data source: Gartner Q3 2017 earnings press release. EPS = earnings per share.

A person turning a dial labeled sales to high

Image source: Getty Images.

What happened with Gartner this quarter?

Total revenue surged 44% year over year to $828 million, boosted by the contributions of CEB, the best-practices insight and technology company Gartner acquired earlier this year. Excluding the impact of CEB, revenue rose 15%.

CEO Gene Hall highlighted the value proposition that the combined company can now offer to its clients during a conference call with analysts:

Business leaders have never faced the rate of change they face today. They need help to deal with these difficult issues. The combination of CEB and Gartner gives us unique capabilities to help clients address these issues with every function of the business. We're providing the best of both businesses -- research methodologies, sales and service best practices, operations -- and together, we will be better than either company was alone.

All told, adjusted EBITDA -- which excludes stock-based compensation, acquisition-related charges, and other nonrecurring items -- leapt 64% to $149 million. Adjusted net income also rose 23% to $59.5 million, while earnings per share increased 12% to $0.65. 

Looking forward

Gartner updated its financial outlook for 2017, which now includes:

  • Total revenue of $3,257 to $3,327, up from a previous estimate of $3.225 to $3.320
  • Adjusted EBITDA of $685 to $710, compared to $685 million to $720 million
  • Adjusted EPS of $3.39 to $3.50, versus $3.32 to $3.49

In a press release, Hall added:

Our business continues to perform extraordinarily well. Our traditional Gartner business again achieved double-digit contract value growth in every geography, across every client size and in virtually every industry. We've successfully integrated CEB's talented associates into Gartner and are already delivering value to our clients through a "best of both" approach. I remain extremely excited about our long-term prospects for growth and delivering shareholder value.

With both its traditional Gartner and CEB businesses generating strong growth, Gartner Inc. appears well positioned to benefit from the growing global demand for trusted research and advisory services.

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool recommends Gartner. The Motley Fool has a disclosure policy.