Gartner Inc. (NYSE:IT) announced strong second-quarter 2018 results late Wednesday, highlighting broad-based growth across the business and the recent sale of several non-core segments.

With shares of the research and advisory services leader up 3% on Thursday and flirting with fresh all-time highs in response, let's dig deeper to see what Gartner accomplished over the last few months, as well as what investors should be watching going forward.

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Image source: Getty Images.

Gartner results: The raw numbers

Metric

Q2 2018

Q2 2017

Year-Over-Year Change

GAAP revenue

$1.001 billion

$844 million

18.6%

GAAP net income (loss)

$46 million

($92 million)

N/A

GAAP earnings (loss) per diluted share

$0.50

($1.03)

N/A

Data source: Gartner.  

What happened with Gartner this quarter?

  • Though Gartner acquired CEB's Talent Assessment and Workforce Surveys businesses in April 2017, the company subsequently determined they were not aligned with their core focus on research and advisory services for enterprise customers. As such, as it previously announced, Gartner divested the talent assessment portion for $403 million on April 3, 2018, then sold the workforce surveys side for $28 million on May 1, 2018.
  • This quarter's results include roughly $1 million in adjusted revenue and around $100,000 in adjusted EBITDA from those businesses.
  • Adjusted revenue excluding divested operations grew 14%.
  • Gartner repurchased 0.5 million shares for $68 million, and paid down $554 million of debt during the quarter.
  • On an adjusted (non-GAAP) basis -- so excluding items like acquisition expenses -- earnings per share grew 17% to $1.03.
  • Adjusted research segment revenue climbed 14% to $771 million. Total segment contract value increased 12% to $2.94 billion.
  • Adjusted events segment revenue increased 22% to $111 million. Gartner held 24 events during the quarter (two fewer than in last year's second quarter) hosting 20,896 attendees.
  • Adjusted consulting segment revenue grew 5% to $96 million. Consulting backlog grew 16% to $106 million.
  • Other segment revenue fell 51% to $23 million, comprised primarily of CEB businesses.

What management had to say

Referencing Gartner's equally strong first quarter, CEO Gene Hall stated: "We got off to a great start for the year and that continued through the second quarter. The leading indicators across all parts of our business are overwhelmingly positive, and we are well-positioned for sustained, long-term double digit growth.

Looking forward 

For the full year of 2018, Gartner now expects total revenue of $3.93 billion to $4.035 billion (up slightly from $3.92 billion to $4.025 billion previously), and reiterated its outlook for adjusted earnings per share of $3.51 to $3.91.

In the end, there were no big surprises in Gartner's slightly better-than-expected quarter. Rather, the company is demonstrating broad strength after honing its focus to start the year, and the stock is responding in kind.

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