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IT Q1 Earnings Beat on Contract Value Growth & Cost Control
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Key Takeaways
Gartner Q1 adjusted EPS of $3.32 beat the estimate of $2.99 as revenues slipped 1.5% y/y to $1.51B.
IT ended Q1 with $5.3B global contract value; Business Sales CV rose 3.2% at 2026 rates.
Gartner generated $371M in free cash flow and bought back shares worth $535M YTD.
Gartner, Inc. (IT - Free Report) has delivered first-quarter 2026 adjusted earnings of $3.32 per share, beating the Zacks Consensus Estimate of $2.99 by 11%. Adjusted earnings increased 11.4% from the year-ago quarter.
Total revenues were $1.51 billion, falling 1.5% year over year and lagging the consensus estimate of $1.52 billion by 0.6%. Still, Gartner exited the quarter with a global contract value of $5.3 billion, up 1% on a foreign-currency-neutral basis at 2026 rates, signaling steadier subscription demand even as reported revenues faced pressure.
IT's Contract Value Trends Stay Positive Into 2026
Global Technology Sales contract value ended the quarter at $4 billion, up 0.4% year over year on a foreign-currency-neutral basis at 2026 rates. Global Business Sales contract value was $1.3 billion, rising 3.2%, pointing to better relative momentum in functional-leader demand outside core technology spending.
Retention metrics stayed supportive. Wallet retention was 97.7% for global sales, while client retention was 85%, reflecting a base of recurring relationships even with a softer renewal and expansion environment than earlier periods.
Insights remained the largest profit engine. Segment revenues increased 3.1% year over year to $1,294.2 million, supported by a contribution margin of 78.2%, translating into $1,012 million of segment contribution.
Conferences posted another year-over-year increase, with revenues up 7.9% to $78.3 million. Consulting continued to weigh on growth, with revenues declining 14.7% to $119.1 million, reflecting pressure across both labor-related work and contract optimization revenue streams.
IT's Profitability Improves as Costs Ease From Prior Year
Despite the modest decline in GAAP revenues, profitability held up well. The consolidated contribution margin increased to 71.6%, a notable step up from the prior-year level shown in the quarterly financial summary, reflecting improved delivery efficiency and mix.
Expense trends were also constructive in the GAAP bridge. Cost of services and product development fell to $429.3 million from $475 million a year ago, while selling, general and administrative expenses were essentially flat at $726.3 million. Operating income rose to $316 million from $278 million, helping net income increase to $222.3 million.
Gartner's Cash Flow Supports Aggressive Capital Returns
IT continued to convert earnings into cash at a strong clip. The free cash flow was $371 million for the quarter, supported by $390.9 million in operating cash flow and modest capital spending of $20.4 million.
That cash generation underpinned continued buybacks. The company repurchased $535 million of shares from the start of the year through the quarter-end, and it reported $1.2 billion of repurchase authorization remaining as of April 30, 2026. On the balance sheet, cash and cash equivalents were $1.7 billion, total debt was $3 billion and net debt to adjusted EBITDA was 0.8X, keeping leverage well below its targeted range.
IT's Updated 2026 Guidance Reflects Higher Earnings Power
Management raised its 2026 outlook from the update provided earlier in the year. Gartner expects adjusted revenues at or above $6.405 billion and adjusted EBITDA excluding the divested operation at or above $1.545 billion, reflecting ongoing cost discipline while continuing to invest in key areas.
The clearest upgrade came at the bottom line. The adjusted earnings per share guidance increased to at least $13.25, with the free cash flow expected to be at or above $1.160 billion. The segment view implied a more cautious consulting backdrop, with consulting revenue guidance reduced to $510 million, while Insights and Conferences revenue expectations were maintained at $5.200 billion and $695 million, respectively.
Waste Management, Inc. (WM - Free Report) reported first-quarter 2026 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues fell short.
The company posted adjusted earnings of $1.81 per share, which beat the Zacks Consensus Estimate of $1.75 by 3.4%. The bottom line improved from the year-ago quarter’s adjusted figure of $1.67.
Revenues of $6.23 billion missed the Zacks Consensus Estimate of $6.29 billion by 1.1%. However, the top line increased 3.5% year over year.
EFX posted $1.86 in earnings per share, beating the Zacks Consensus Estimate by 10%. This marked a 21.6% jump from the first quarter of 2025. The company recorded $1.7 billion in its top line, surpassing the consensus estimate by 2.3%. Revenues increased 14.6% from the year-ago quarter.
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IT Q1 Earnings Beat on Contract Value Growth & Cost Control
Key Takeaways
Gartner, Inc. (IT - Free Report) has delivered first-quarter 2026 adjusted earnings of $3.32 per share, beating the Zacks Consensus Estimate of $2.99 by 11%. Adjusted earnings increased 11.4% from the year-ago quarter.
Total revenues were $1.51 billion, falling 1.5% year over year and lagging the consensus estimate of $1.52 billion by 0.6%. Still, Gartner exited the quarter with a global contract value of $5.3 billion, up 1% on a foreign-currency-neutral basis at 2026 rates, signaling steadier subscription demand even as reported revenues faced pressure.
Gartner, Inc. Price, Consensus and EPS Surprise
Gartner, Inc. price-consensus-eps-surprise-chart | Gartner, Inc. Quote
IT's Contract Value Trends Stay Positive Into 2026
Global Technology Sales contract value ended the quarter at $4 billion, up 0.4% year over year on a foreign-currency-neutral basis at 2026 rates. Global Business Sales contract value was $1.3 billion, rising 3.2%, pointing to better relative momentum in functional-leader demand outside core technology spending.
Retention metrics stayed supportive. Wallet retention was 97.7% for global sales, while client retention was 85%, reflecting a base of recurring relationships even with a softer renewal and expansion environment than earlier periods.
Gartner's Segmental Mix Highlights Insights Durability
Insights remained the largest profit engine. Segment revenues increased 3.1% year over year to $1,294.2 million, supported by a contribution margin of 78.2%, translating into $1,012 million of segment contribution.
Conferences posted another year-over-year increase, with revenues up 7.9% to $78.3 million. Consulting continued to weigh on growth, with revenues declining 14.7% to $119.1 million, reflecting pressure across both labor-related work and contract optimization revenue streams.
IT's Profitability Improves as Costs Ease From Prior Year
Despite the modest decline in GAAP revenues, profitability held up well. The consolidated contribution margin increased to 71.6%, a notable step up from the prior-year level shown in the quarterly financial summary, reflecting improved delivery efficiency and mix.
Expense trends were also constructive in the GAAP bridge. Cost of services and product development fell to $429.3 million from $475 million a year ago, while selling, general and administrative expenses were essentially flat at $726.3 million. Operating income rose to $316 million from $278 million, helping net income increase to $222.3 million.
Gartner's Cash Flow Supports Aggressive Capital Returns
IT continued to convert earnings into cash at a strong clip. The free cash flow was $371 million for the quarter, supported by $390.9 million in operating cash flow and modest capital spending of $20.4 million.
That cash generation underpinned continued buybacks. The company repurchased $535 million of shares from the start of the year through the quarter-end, and it reported $1.2 billion of repurchase authorization remaining as of April 30, 2026. On the balance sheet, cash and cash equivalents were $1.7 billion, total debt was $3 billion and net debt to adjusted EBITDA was 0.8X, keeping leverage well below its targeted range.
IT's Updated 2026 Guidance Reflects Higher Earnings Power
Management raised its 2026 outlook from the update provided earlier in the year. Gartner expects adjusted revenues at or above $6.405 billion and adjusted EBITDA excluding the divested operation at or above $1.545 billion, reflecting ongoing cost discipline while continuing to invest in key areas.
The clearest upgrade came at the bottom line. The adjusted earnings per share guidance increased to at least $13.25, with the free cash flow expected to be at or above $1.160 billion. The segment view implied a more cautious consulting backdrop, with consulting revenue guidance reduced to $510 million, while Insights and Conferences revenue expectations were maintained at $5.200 billion and $695 million, respectively.
IT carries a Zacks Rank #4 (Sell) at present.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Snapshot
Waste Management, Inc. (WM - Free Report) reported first-quarter 2026 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues fell short.
The company posted adjusted earnings of $1.81 per share, which beat the Zacks Consensus Estimate of $1.75 by 3.4%. The bottom line improved from the year-ago quarter’s adjusted figure of $1.67.
Revenues of $6.23 billion missed the Zacks Consensus Estimate of $6.29 billion by 1.1%. However, the top line increased 3.5% year over year.
Equifax Inc. (EFX - Free Report) registered impressive first-quarter 2026 results.
EFX posted $1.86 in earnings per share, beating the Zacks Consensus Estimate by 10%. This marked a 21.6% jump from the first quarter of 2025. The company recorded $1.7 billion in its top line, surpassing the consensus estimate by 2.3%. Revenues increased 14.6% from the year-ago quarter.