Gartner Inc.

11/03/2026 | Press release | Distributed by Public on 11/03/2026 07:14

Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The purpose of this Management's Discussion and Analysis ("MD&A") is to facilitate an understanding of significant factors influencing the quarterly operating results, financial condition and cash flows of Gartner, Inc. Additionally, the MD&A conveys our expectations of the potential impact of known trends, events or uncertainties that may impact future results. You should read this discussion in conjunction with our Condensed Consolidated Financial Statements and related notes included in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2025 (the "2025 Form 10-K"). Historical results and percentage relationships are not necessarily indicative of operating results for future periods. References to "Gartner," the "Company," "we," "our" and "us" in this MD&A are to Gartner, Inc. and its consolidated subsidiaries.
FORWARD-LOOKING STATEMENTS
In addition to historical information, this Quarterly Report on Form 10-Q contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are any statements other than statements of historical fact, including statements regarding our expectations, beliefs, hopes, intentions, projections or strategies regarding the future. In some cases, forward-looking statements can be identified by the use of words such as "may," "will," "expect," "should," "could," "believe," "plan," "anticipate," "estimate," "predict," "potential," "continue" or other words of similar meaning.
We operate in a very competitive and rapidly changing environment that involves numerous known and unknown risks and uncertainties, some of which are beyond our control. Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future quarterly and annual revenues, operating income, results of operations and cash flows, as well as any forward-looking statement, are subject to change and to inherent risks and uncertainties, such as those disclosed or incorporated by reference in our filings with the Securities and Exchange Commission. Important factors that could cause our actual results, performance and achievements, or industry results to differ materially from estimates or projections contained in our forward-looking statements include, among others, the following: our ability to maintain and expand our products and services; our ability to keep pace with technological and industry developments in artificial intelligence ("AI") and comply with evolving AI regulations; our ability to achieve continued customer renewals and achieve new contract value, backlog and deferred revenue growth in light of competitive pressures; our ability to grow or sustain revenue from individual customers; our ability to expand or retain our customer base; our ability to carry out our strategic initiatives and manage associated costs; the timing of conferences and meetings, in particular our Gartner Symposium/Xpo series; our ability to achieve and effectively manage growth, including our ability to integrate our acquisitions and consummate and integrate future acquisitions; our ability to attract and retain a professional staff of analysts and consultants as well as experienced sales personnel upon whom we are dependent, especially in light of labor competition; our ability to successfully compete with existing competitors and potential new competitors; our ability to enforce and protect our intellectual property rights; the impact of cybersecurity incidents or other disruptions to our information systems; our ability to pay our debt obligations; the impact of global economic and geopolitical conditions, including inflation (and related monetary policy by governments in response to inflation) and recession; uncertain effects, both direct and indirect, of changes and volatility in tariffs and trade policies; risks associated with the creditworthiness, budget cuts, priorities and shutdown of governments and agencies; additional risks associated with international operations, including foreign currency fluctuations; the impact on our business resulting from changes in international conditions, including those resulting from tensions in the Middle East, the war in Ukraine and current and future sanctions imposed by governments or other authorities; the impact of restructuring and other charges on our businesses and operations; our ability to meet sustainability commitments and comply with applicable regulatory requirements, as well as potential reactions by customers to these commitments; the impact of changes in tax policy (including global minimum tax legislation) and heightened scrutiny from various taxing authorities globally; changes to laws and regulations; and other risks and uncertainties. The potential fluctuations in our operating income could cause period-to-period comparisons of operating results not to be meaningful and could provide an unreliable indication of future operating results. A description of the risk factors associated with our business is included under "Risk Factors" in Item 1A. of the 2025 Form 10-K, which is incorporated herein by reference.
Forward-looking statements are subject to risks, estimates and uncertainties that could cause actual results to differ materially from those discussed in, or implied by, the forward-looking statements. Factors that might cause such a difference include, but are not limited to, those listed above or described under "Risk Factors" in Item 1A of the 2025 Form 10-K. Readers should not place undue reliance on these forward-looking statements, which reflect management's opinion only as of the date on which they were made. Forward-looking statements in this Quarterly Report on Form 10-Q speak only as of the date hereof, and forward-looking statements in documents attached that are incorporated by reference speak only as of the date of those documents. Except as required by law, we disclaim any obligation to revise or update these forward-looking statements to reflect events or circumstances as they occur.
BUSINESS OVERVIEW
Gartner, Inc. (NYSE: IT) delivers actionable, objective business and technology insights that drive smarter decisions and stronger performance on an organization's mission-critical priorities.
We deliver our products and services globally through three reportable segments - Business and Technology Insights ("Insights"), Conferences and Consulting, as described below.
•Insights equips executives and their teams from every function and across all industries with actionable, objective business and technology insights, guidance and tools. Our experienced experts deliver all this value informed by an unmatched combination of practitioner-sourced and data-driven research to help our clients address their mission critical priorities.
•Conferences provides executives and teams across an organization the opportunity to learn, share and network. From industry-leading conferences to peer-driven communities - each focused on the mission-critical priorities of specific business roles - our offerings enable attendees to experience the best of Gartner insights and guidance.
•Consulting serves senior executives leading technology-driven strategic initiatives leveraging the power of Gartner's actionable, objective insights. Through custom analysis and on-the-ground support we enable optimized technology investments and stronger performance on our clients' mission critical priorities.
As of September 30, 2026, we had 19,460 employees globally, a decrease of 7% from September 30, 2025. The largest decreases in headcount were in our Insights segment and the Digital Markets business, primarily in the second half of 2025 and the first quarter of 2026.
Recent Developments
In February 2026, we completed the sale of the Digital Markets business, for approximately $99.8 million net of cash transferred. We recorded a pre-tax gain of $6.8 million on the sale, which is included in Gain from sale of divested operation in the Consolidated Statement of Operations during the nine months ended September 30, 2026. The Digital Markets business represented the entirety of our Other segment.
BUSINESS MEASUREMENTS
We believe that the following business measurements are important performance indicators for our reportable business segments:
BUSINESS SEGMENT BUSINESS MEASUREMENT
Insights
Contract value represents the dollar value attributable to all of our subscription-related contracts. It is calculated as the annualized value of all contracts in effect at a specific point in time, without regard to the duration of the contract. Contract value primarily includes Insights deliverables for which revenue is recognized on a ratable basis, as well as other deliverables (primarily Conferences tickets) for which revenue is recognized when the deliverable is utilized. Comparing contract value year-over-year not only measures the short-term growth of our business, but also signals the long-term health of our Insights subscription business since it measures revenue that is highly likely to recur over a multi-year period. Our contract value consists of Global Technology Sales contract value, which includes sales to users and providers of technology, and Global Business Sales contract value, which includes sales to all other functional leaders.
Client retention rate represents a measure of client satisfaction and renewed business relationships at a specific point in time. Client retention is calculated on a percentage basis by dividing our current clients, who were also clients a year ago, by all clients from a year ago. Client retention is calculated at an enterprise level, which represents a single company or customer.
Wallet retention rate represents a measure of the amount of contract value we have retained with clients over a twelve-month period. Wallet retention is calculated on a percentage basis by dividing the contract value of our current clients, who were also clients a year ago, by the contract value from a year ago, excluding the impact of foreign currency exchange. When wallet retention exceeds client retention, it is an indication of retention of higher-spending clients, or increased spending by retained clients, or both. Wallet retention is calculated at an enterprise level, which represents a single company or customer.
Conferences
Number of destination conferences represents the total number of hosted in-person conferences completed during the period. Single day, local meetings are excluded.
Number of destination conferences attendees represents the total number of people who attend in-person conferences. Single day, local meetings are excluded.
Consulting
Consulting backlog represents future revenue to be derived from in-process consulting and benchmark analytics engagements.
Utilization rate represents a measure of productivity of our consultants. Utilization rates are calculated for billable headcount on a percentage basis by dividing total hours billed by total hours available to bill.
EXECUTIVE SUMMARY OF OPERATIONS AND FINANCIAL POSITION
The fundamentals of our strategy include a focus on creating actionable business and technology insights for executives and their teams, delivering innovative and highly differentiated product offerings, building a strong sales capability, providing world class client service with a focus on client engagement and retention, and continuously improving our operational effectiveness.
We had total revenues of $1.5 billion during the third quarter of 2026, a decrease of 1% compared to the third quarter of 2025. The decrease was due to the sale of the Digital Markets business in February 2026. During the third quarter of 2026, compared to the third quarter of 2025, Insights revenues increased by 2%, Conferences revenues increased by 15%, and Consulting revenues increased by 2%. For a more complete discussion of our results by segment, see Segment Results below.
For the third quarter of 2026 and 2025, we had net income of $214.4 million and $35.4 million, respectively, and diluted net income per share of $3.35 and $0.47, respectively. The increase in net income and diluted net income per share in 2026 compared to 2025 is primarily due to the goodwill impairment loss in 2025. Cash provided by operating activities was $1.1 billion and $1.0 billion during the nine months ended September 30, 2026 and 2025, respectively. As of September 30, 2026, we had $1.6 billion of cash and cash equivalents and approximately $1.0 billion of available borrowing capacity on our revolving credit facility. For a more complete discussion of our cash flows and financial position, see the Liquidity and Capital Resources section below.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
For information regarding our critical accounting policies and estimates, please refer to Part II, Item 7, "Critical Accounting Policies and Estimates" contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. There have been no material changes to the critical accounting policies previously disclosed in that report.
RECENTLY ISSUED ACCOUNTING STANDARDS
The FASB has issued accounting standards that have not yet become effective and that may impact the Company's consolidated financial statements or its disclosures in future periods. Note 1 - Business and Basis of Presentation in the Notes to Condensed Consolidated Financial Statements provides information regarding those accounting standards.
RESULTS OF OPERATIONS
Consolidated Results
The table below presents an analysis of selected line items and period-over-period changes in our interim Condensed Consolidated Statements of Operations for the periods indicated (in thousands).
Three Months Ended September 30, 2026 Three Months Ended September 30, 2025 Increase (Decrease) Increase
(Decrease)
%
Revenues:
Insights $ 1,292,434 $ 1,270,724 $ 21,710 2 %
Conferences 86,003 74,554 11,449 15
Consulting 126,354 123,573 2,781 2
Other - 55,221 (55,221) (100)
Total revenues 1,504,791 1,524,072 (19,281) (1)
Costs and expenses:
Cost of services and product development 433,143 474,218 (41,075) (9)
Selling, general and administrative 746,842 762,557 (15,715) (2)
Depreciation 25,040 30,733 (5,693) (19)
Amortization of intangibles 20,041 20,220 (179) (1)
Goodwill impairment - 150,000 (150,000) nm
Gain from sale of divested operation
(1,386) - (1,386) nm
Operating income 281,111 86,344 194,767 226
Interest expense, net (23,641) (16,279) 7,362 45
Other expense, net (1,789) (583) (1,206) 207
Less: Provision for income taxes 41,262 34,125 7,137 21
Net income $ 214,419 $ 35,357 $ 179,062 506 %
nm = not meaningful
Nine Months Ended September 30, 2026 Nine Months Ended September 30, 2025 Increase (Decrease) Increase
(Decrease)
%
Revenues:
Insights $ 3,876,499 $ 3,789,798 $ 86,701 2 %
Conferences 408,485 358,558 49,927 14
Consulting 387,399 418,873 (31,474) (8)
Other 19,392 177,427 (158,035) (89)
Total revenues 4,691,775 4,744,656 (52,881) (1)
Costs and expenses:
Cost of services and product development 1,349,359 1,480,979 (131,620) (9)
Selling, general and administrative 2,237,783 2,269,753 (31,970) (1)
Depreciation 75,550 90,134 (14,584) (16)
Amortization of intangibles 60,145 62,318 (2,173) (3)
Goodwill impairment - 150,000 (150,000) nm
Gain from sale of divested operation (6,785) - (6,785) nm
Operating income 975,723 691,472 284,251 41
Interest expense, net (66,955) (41,493) 25,462 61
Other (expense) income, net
(6,052) 4,304 (10,356) (241)
Less: Provision for income taxes 190,455 167,204 23,251 14
Net income $ 712,261 $ 487,079 $ 225,182 46 %
nm = not meaningful
In addition to GAAP results, we provide foreign currency neutral dollar amounts and percentages for our revenues, certain expenses, contract values and other metrics. These foreign currency neutral dollar amounts and percentages eliminate the effects of exchange rate fluctuations and thus provide a more accurate and meaningful trend in the underlying business performance being measured. We calculate foreign currency neutral dollar amounts by converting the underlying amounts in local currency for different periods into U.S. dollars by applying the same foreign exchange rates to all periods presented.
Total revenues for the three months ended September 30, 2026 were $1.5 billion, a decrease of $19.3 million, or 1% compared to the same period in 2025 on both a reported basis and excluding the foreign currency impact. Total revenues for the nine months ended September 30, 2026 were $4.7 billion, a decrease of $52.9 million, or 1% compared to the same period in 2025 on a reported basis and 2% excluding the foreign currency impact. The decreases in revenue for the three and nine months ended September 30, 2026 were primarily due to the sale of the Digital Markets business in February 2026. Refer to the section of this MD&A below entitled "Segment Results" for a discussion of revenues and results by reportable segment.
Cost of services and product development was $433.1 million during the three months ended September 30, 2026, a decrease of $41.1 million compared to the same period in 2025, or 9% on a reported basis and 8% excluding the foreign currency impact. The decrease in Cost of services and product development during the three months ended September 30, 2026 was primarily due to a $23.0 million decrease in product and content delivery expenses principally as a result of the sale of the Digital Markets business in February 2026, in addition to a $20.3 million decrease in personnel expenses due to lower headcount. Cost of services and product development as a percent of revenues was 29% and 31% for the three months ended September 30, 2026 and 2025, respectively. Cost of services and product development was $1.3 billion during the nine months ended September 30, 2026, a decrease of $131.6 million compared to the same period in 2025, or 9% on a reported basis and 10% excluding the foreign currency impact. The decrease in Cost of services and product development during the nine months ended September 30, 2026 was primarily due to the same factors that caused the year-over-year quarterly decrease, with a $71.6 million decrease in product and content delivery expenses, in addition to a $63.1 million decrease in personnel expenses. Cost of services and product development as a percent of revenues was 29% and 31% for the nine months ended September 30, 2026 and 2025, respectively.
Selling, general and administrative ("SG&A") expense was $746.8 million during the three months ended September 30, 2026, a decrease of $15.7 million compared to the same period in 2025, or 2% on both a reported basis and excluding the foreign currency impact. The decrease in SG&A expense during the three months ended September 30, 2026 was primarily due to
reduced severance expenses. SG&A expense was $2.2 billion during the nine months ended September 30, 2026, a decrease of $32.0 million compared to the same period in 2025, or 1% on a reported basis and 2% excluding the foreign currency impact. The decrease in SG&A expense during the nine months ended September 30, 2026 was primarily due to the same factor that caused the year-over-year quarterly decrease. The number of quota-bearing sales associates in Global Technology Sales decreased by 2% to 3,637 and in Global Business Sales, decreased by 1% to 1,292 compared to September 30, 2025. On a combined basis, the total number of quota-bearing sales associates decreased by 2% when compared to September 30, 2025. SG&A expense as a percent of revenues was 50% during both the three months ended September 30, 2026 and 2025. SG&A expense as a percent of revenues was 48% during both the nine months ended September 30, 2026 and 2025.
Depreciation decreased by 19% and 16% during the three and nine months ended September 30, 2026, respectively, compared to the same periods in 2025. The decreases for both the three and nine months ended September 30, 2026 were primarily due to the sale of the Digital Markets business in February 2026.
Amortization of intangibles decreased by 3% during the nine months ended September 30, 2026, compared to the same period in 2025, due to certain intangible assets becoming fully amortized in 2025.
Goodwill impairment of $150.0 million during the three and nine months ended September 30, 2025, reflected a goodwill impairment loss recognized in the Digital Markets reporting unit.
Gain from sale of divested operation of $6.8 million during the nine months ended September 30, 2026 was attributable to the sale of the Digital Markets business in February 2026.
Operating income was $281.1 million and $86.3 million during the three months ended September 30, 2026 and 2025, respectively. Operating income was $975.7 million and $691.5 million during the nine months ended September 30, 2026 and 2025, respectively. The increase in operating income for both the three and nine months ended September 30, 2026 as compared to the prior year periods was primarily due to the reduction in operating expenses as well as the goodwill impairment loss recognized in 2025.
Interest expense, net increased by $7.4 million and $25.5 million during the three and nine months ended September 30, 2026, respectively, compared to the same periods in 2025. The increase for the three and nine months ended September 30, 2026 was due to a decrease in interest income, as a result of lower average cash balances than the prior year as well as an increase in interest expense related to the issuance of our 2031 and 2035 Notes in November 2025.
Other (expense) income, net for the periods presented herein primarily consisted of the net impact of foreign currency gains and losses.
The provision for income taxes was $41.3 million and $34.1 million for the three months ended September 30, 2026 and 2025, respectively. The effective income tax rate was 16.1% and 49.1% for the three months ended September 30, 2026, and 2025, respectively. The decrease in the effective income tax rate in the current period was primarily attributable to a favorable release of reserves upon the resolution of the related inquiries, as well as the 2025 impact of the goodwill impairment, which was not deductible for tax purposes.
The provision for income taxes was $190.5 million and $167.2 million for the nine months ended September 30, 2026 and 2025, respectively. The effective income tax rate was 21.1% and 25.6% for the nine months ended September 30, 2026 and 2025, respectively. The decrease in the effective income tax rate in the current period was primarily due to the same factors that caused the year-over-year quarterly decrease.
Net income for the three months ended September 30, 2026 and 2025 was $214.4 million and $35.4 million, respectively, while net income for the nine months ended September 30, 2026 and 2025 was $712.3 million and $487.1 million, respectively. Our diluted net income per share during the three and nine months ended September 30, 2026 increased by $2.88 and $4.31, respectively. The increase in net income during both the three and nine months ended September 30, 2026 was primarily due to the 2025 periods including the goodwill impairment and a decrease in operating expenses, partially offset by a decrease in revenues and an increase in interest expense, net. The increase in diluted net income per share during the three and nine months ended September 30, 2026 was also driven by the decrease in diluted weighted average shares outstanding during 2026, as compared to the same periods in 2025.
SEGMENT RESULTS
We evaluate segment performance and allocate resources based on gross contribution margin. Gross contribution is defined as operating income or loss excluding certain Cost of services and product development expenses, SG&A expenses, Depreciation, Amortization of intangibles, goodwill impairment and Gain from sale of divested operation. Gross contribution margin is defined as gross contribution as a percent of revenues.
The tables below present the components of segment expense by percentage of segment revenues.
Three Months Ended September 30,
Insights Conferences Consulting
2026 2025 2026 2025 2026 2025
Revenues 100 % 100 % 100 % 100 % 100 % 100 %
Personnel expenses 21 % 22 % 23 % 25 % 60 % 66 %
Product and content delivery expenses 1 % 1 % 37 % 34 % 3 % 3 %
Other expenses 1 % - % 5 % 4 % 3 % 3 %
Gross contribution margin 78 % 77 % 35 % 37 % 34 % 29 %
Nine Months Ended September 30,
Insights Conferences Consulting
2026 2025 2026 2025 2026 2025
Revenues 100 % 100 % 100 % 100 % 100 % 100 %
Personnel expenses 21 % 22 % 14 % 15 % 60 % 59 %
Product and content delivery expenses - % 1 % 32 % 32 % 3 % 3 %
Other expenses 1 % - % 3 % 4 % 3 % 3 %
Gross contribution margin 78 % 77 % 50 % 49 % 34 % 36 %
Personnel expenses and product and content delivery expenses are the primary direct costs across all three reportable segments, although their relative significance varies based on each segment's operating model. The Insights segment benefits from a scalable subscription model that allows us to deliver products and services to additional customers without a proportionate increase in expenses, resulting in a higher contribution margin for the Insights business. Conferences has a different cost structure, with event delivery costs representing a significant component of direct expenses, which moderates margins despite relatively low personnel requirements. Consulting is the most labor-intensive business, with profitability largely dependent on staffing and utilization levels, as revenue growth typically requires corresponding investments in delivery personnel.
Reportable Segments
The sections below present the results of the Company's three reportable business segments: Insights, Conferences and Consulting.
Insights
As Of And For The Three Months Ended September 30, 2026 As Of And For The Three Months Ended September 30, 2025 Increase
(Decrease) 		Percentage
Increase
(Decrease) 		As Of And For The Nine Months Ended September 30, 2026 As Of And For The Nine Months Ended September 30, 2025 Increase
(Decrease) 		Percentage
Increase
(Decrease)
Financial Measurements:
Revenues(1)
$ 1,292,434 $ 1,270,724 $ 21,710 2 % $ 3,876,499 $ 3,789,798 $ 86,701 2 %
Gross contribution(1)
$ 1,002,919 $ 974,323 $ 28,596 3 % $ 3,013,809 $ 2,901,002 $ 112,807 4 %
Gross contribution margin 78 % 77 % 1 point - 78 % 77 % 1 point -
Business Measurements:
Contract Value(1)(3)
$ 5,340,000 $ 5,211,000 $ 129,000 2 %
Global Technology Sales(2):
Contract value(1)(3)
$ 4,033,000 $ 3,951,000 $ 82,000 2 %
Client retention 85 % 84 % 1 point -
Wallet retention 98 % 98 % - -
Global Business Sales(2):
Contract value(1)(3)
$ 1,307,000 $ 1,260,000 $ 47,000 4 %
Client retention 87 % 87 % - -
Wallet retention 99 % 102 % (3) points -
(1)Dollars in thousands.
(2)Global Technology Sales includes sales to users and providers of technology. Global Business Sales includes sales to all other functional leaders.
(3)Contract values are on a foreign currency neutral basis. Contract values as of September 30, 2025 have been calculated using the same foreign currency rates as 2026.
Insights revenues increased by $21.7 million during the three months ended September 30, 2026 compared to the same period in 2025, or 2% both on a reported basis and excluding the foreign currency impact. Insights gross contribution increased $28.6 million during the three months ended September 30, 2026 compared to the same period in 2025, as a result of higher revenue and a decrease of $8.0 million, or 3%, in personnel expenses primarily due to lower average headcount. For the nine months ended September 30, 2026, Insights revenue increased by $86.7 million compared to the same period in 2025 or 2% on a reported basis and 1% excluding the foreign currency impact. Insights gross contribution increased $112.8 million during the nine months ended September 30, 2026 compared to the same period in 2025, as a result of higher revenue and a decrease of $28.7 million, or 3%, in personnel expenses primarily due to lower average headcount. The segment gross contribution margin was 78% and 77% for the three months ended September 30, 2026 and 2025, respectively, and 78% and 77% for the nine months ended September 30, 2026 and 2025, respectively.
Contract value increased to $5.3 billion at September 30, 2026, or 2% compared to September 30, 2025 excluding the foreign currency impact. The majority of industry sectors grew low to mid single-digit rates. Growth was led by the banking sector.
Global Technology Sales ("GTS") contract value increased by 2% at September 30, 2026 when compared to September 30, 2025. The increase in GTS contract value was primarily due to business from new clients. GTS contract value increased by low to mid single-digit rates for nearly all commercial enterprise sizes and the majority of industry sectors.
Global Business Sales ("GBS") contract value increased by 4% year-over-year, primarily driven by business from new clients. The majority of our GBS practices and commercial enterprise sizes achieved mid single-digit rates or faster growth rates, with the majority of sectors growing low to mid single-digit rates year-over-year.
GTS client retention was 85% and 84% as of September 30, 2026 and 2025, respectively, while wallet retention was 98% as of both September 30, 2026 and 2025. GBS client retention was 87% as of both September 30, 2026 and 2025, while wallet retention was 99% and 102% as of September 30, 2026 and 2025, respectively. The decrease in GBS wallet retention was largely due to lower levels of spending by existing clients compared to the same period in 2025.
Conferences
Three Months Ended September 30, 2026 Three Months Ended September 30, 2025 Increase
(Decrease) 		Percentage
Increase
(Decrease) 		Nine Months Ended September 30, 2026 Nine Months Ended September 30, 2025 Increase
(Decrease) 		Percentage
Increase
(Decrease)
Financial Measurements:
Revenues(1)
$ 86,003 $ 74,554 $ 11,449 15 % $ 408,485 $ 358,558 $ 49,927 14 %
Gross contribution(1)
$ 29,981 $ 27,312 $ 2,669 10 % $ 205,612 $ 176,082 $ 29,530 17 %
Gross contribution margin 35 % 37 % (2) points - 50 % 49 % 1 point -
Business Measurements:
Number of destination conferences(2)
13 10 3 30 % 41 39 2 5 %
Number of destination conferences attendees(2)
13,575 11,454 2,121 19 % 53,105 51,660 1,445 3 %
(1)Dollars in thousands.
(2)Single day, local meetings are excluded.
Conferences revenues increased by $11.4 million during the three months ended September 30, 2026 compared to the same period in 2025, or 15% on both a reported basis and excluding the foreign currency impact. The increase in revenues for the three months ended September 30, 2026 was primarily due to higher exhibitor revenue, as well as an increase in attendee revenue. We held 13 and 10 destination conferences during the three months ended September 30, 2026 and 2025, respectively. Gross contribution increased to $30.0 million during the three months ended September 30, 2026 compared to $27.3 million in the same period last year. Conferences gross contribution increased by $2.7 million during the three months ended September 30, 2026 compared to the same period in 2025 as higher revenues were partially offset by a $6.6 million, or 26%, increase in product and content delivery expenses primarily due to us hosting 3 additional destination conferences in 2026 and a $1.4 million, or 7%, increase in personnel expenses primarily due to an increase in average headcount as well as merit increases. The segment gross contribution margin was 35% and 37% during the three months ended September 30, 2026 and 2025, respectively. The lower gross contribution margin during 2026 was primarily the result of the increase in segment expenses.
Conferences revenues increased by $49.9 million during the nine months ended September 30, 2026 compared to the same period in 2025, or 14% on a reported basis and 13% excluding the foreign currency impact. The increase in revenues for the nine months ended September 30, 2026 was primarily due to higher exhibitor revenue, as well as an increase in attendee revenue. We held 41 and 39 destination conferences during the nine months ended September 30, 2026 and 2025, respectively. Gross contribution increased to $205.6 million during the nine months ended September 30, 2026 compared to $176.1 million in the same period last year. Conferences gross contribution increased by $29.5 million during the nine months ended September 30, 2026 compared to the same period in 2025 as higher revenues were partially offset by a $17.6 million, or 15%, increase in product and content delivery expenses primarily due to us hosting two additional destination conferences in 2026 and a $2.0 million, or 4%, increase in personnel expenses primarily due to an increase in average headcount as well as merit increases. The segment gross contribution margin was 50% and 49% during the nine months ended September 30, 2026 and 2025, respectively. The higher gross contribution margin during 2026 was primarily the result of the increase in revenue.
Consulting
As Of And For The Three Months Ended September 30, 2026 As Of And For The Three Months Ended September 30, 2025 Increase
(Decrease) 		Percentage
Increase
(Decrease) 		As Of And For The Nine Months Ended September 30, 2026 As Of And For The Nine Months Ended September 30, 2025 Increase
(Decrease) 		Percentage
Increase
(Decrease)
Financial Measurements:
Revenues(1)
$ 126,354 $ 123,573 $ 2,781 2 % $ 387,399 $ 418,873 $ (31,474) (8) %
Gross contribution(1)
$ 42,735 $ 35,222 $ 7,513 21 % $ 133,310 $ 150,169 $ (16,859) (11) %
Gross contribution margin 34 % 29 % 5 points - 34 % 36 % (2) points -
Business Measurements:
Backlog(1)(2)
$ 216,922 $ 199,290 $ 17,632 9 %
Billable headcount 817 924 (107) (12) %
Consultant utilization 66 % 60 % 6 points - 64 % 63 % 1 point -
(1)Dollars in thousands.
(2)Backlog is on a foreign currency neutral basis. Backlog as of September 30, 2025 has been calculated using the same foreign currency rates as 2026.
Consulting revenues increased by $2.8 million during the three months ended September 30, 2026 compared to the same period in 2025 or 2% a reported basis and 3% excluding the foreign currency impact, with labor-based consulting revenue flat and an increase in contract optimization revenue of 9%, each on a reported basis. The primary region driving the increase in revenue compared to the prior year period was the United States, partially offset by Japan and Europe, Middle East and Africa ("EMEA"), principally in the commercial sector. Contract optimization revenue may vary significantly and, as such, revenues for the third quarter of 2026 may not be indicative of results for the remainder of 2026 or beyond.
Consulting gross contribution increased $7.5 million during the three months ended September 30, 2026 compared to 2025 due to higher revenues and a $4.8 million, or 6%, decrease in personnel expenses primarily due to lower headcount. The segment gross contribution margin was 34% and 29% for the three months ended September 30, 2026 and 2025, respectively. The increase in gross contribution margin for the three months ended September 30, 2026 was primarily due to the decrease in personnel expenses.
For the nine months ended September 30, 2026, Consulting revenues decreased by $31.5 million compared to the same period in 2025, or 8% on both a reported basis and excluding the foreign currency impact, with a decrease in labor-based consulting revenue of 9% and a decrease in contract optimization revenue of 3%, each on a reported basis. The primary regions driving the decrease in revenue compared to the prior year period were Japan and EMEA, principally in the commercial sector.
Consulting gross contribution decreased $16.9 million during the nine months ended September 30, 2026 compared to 2025 due to lower revenues partially offset by a $14.0 million, or 6%, decrease in personnel expenses primarily due to lower headcount. The segment gross contribution margin was 34% and 36% for the nine months ended September 30, 2026 and 2025, respectively. The decrease in gross contribution margin for the nine months ended September 30, 2026 was primarily due to the decrease in revenues.
Backlog increased by $17.6 million, or 9%, from September 30, 2025 to September 30, 2026, excluding the foreign currency impact.
LIQUIDITY AND CAPITAL RESOURCES
We finance our operations through cash generated from our operating activities and, to a lesser extent, borrowings. Note 8 - Debt in the Notes to Condensed Consolidated Financial Statements provides additional information regarding the Company's outstanding debt obligations. At September 30, 2026, we had $1.6 billion of cash and cash equivalents and approximately $1.0 billion of available borrowing capacity on the revolving credit facility under our 2024 Credit Agreement. We believe that the Company has adequate liquidity to meet its currently anticipated needs for both the next twelve months and the foreseeable future.
We have historically generated significant cash flows from our operating activities, benefiting from the favorable working capital dynamics of our subscription-based business model in our Insights segment, which is our largest business segment and historically has constituted a significant portion of our total revenues. The majority of our Insights customer contracts are paid in advance and, combined with a strong customer retention rate and high incremental margins, our subscription-based business model has resulted in continuously strong operating cash flow. Cash flow generation has also benefited from our ongoing efforts to improve the operating efficiencies of our businesses as well as a focus on the optimal management of our working capital as we increase sales. Since Insights customers are primarily billed upfront, operating cash flows are influenced not only by the timing of customer collections but also by the rate of growth or decline in subscription contract value. Generally, higher subscription contract value growth results in a greater increase in upfront billings and associated operating cash flow generation, while slower growth or declining subscription contract value have a negative impact on operating cash flow generation relative to prior periods. Our operating cash flows are influenced by the combined effects of fees receivable and deferred revenue, as well as deferred commissions and commissions payable, rather than by changes in those account balances viewed in isolation.
Our cash and cash equivalents are held in numerous locations throughout the world with 66% held outside the U.S. at September 30, 2026. We continue to assert our intention to reinvest substantially all remaining accumulated undistributed foreign earnings, except in instances where repatriation would result in minimal additional tax.
The table below summarizes the changes in our cash balances for the periods indicated (in thousands).
Nine Months Ended September 30, 2026 Nine Months Ended September 30, 2025 Increase
(Decrease)
Cash provided by operating activities $ 1,083,760 $ 995,821 $ 87,939
Cash provided by (used in) investing activities 40,145 (91,310) 131,455
Cash used in financing activities (1,206,299) (1,467,475) 261,176
Net decrease in cash and cash equivalents and restricted cash (82,394) (562,964) 480,570
Effects of exchange rates on cash and cash equivalents (6,990) 60,547 (67,537)
Beginning cash and cash equivalents 1,722,521 1,933,147 (210,626)
Ending cash and cash equivalents $ 1,633,137 $ 1,430,730 $ 202,407
Operating
Cash provided by operating activities was $1,083.8 million and $995.8 million during the nine months ended September 30, 2026 and 2025, respectively. The year-over-year increase was primarily due to higher operating income as well as improving contract value growth, partially offset by an approximately $37.0 million increase in net cash interest payments and the timing of severance and indirect tax payments. While operating income increased $284.3 million year over year, $150.0 million of the increase related to the absence of the non-cash goodwill impairment recognized in 2025.
Investing
Cash provided by (used in) investing activities was $40.1 million and $(91.3) million during the nine months ended September 30, 2026 and 2025, respectively. The change from 2025 to 2026 was primarily the result of the proceeds from the sale of the Digital Markets business in February 2026, as well as lower capital expenditures, principally the result of an approximately $22.0 million decrease in real estate-related spending.
Financing
Cash used in financing activities was $1.2 billion and $1.5 billion during the nine months ended September 30, 2026 and 2025, respectively. We used $1.2 billion and $1.5 billion of cash for share repurchases during the nine months ended September 30, 2026 and 2025, respectively.
Debt
As of September 30, 2026, the Company had $3.0 billion of principal amount of debt outstanding. Note 8 - Debt in the Notes to Condensed Consolidated Financial Statements provides additional information regarding the Company's outstanding debt obligations. From time to time, the Company may seek to retire or repurchase its outstanding debt through various methods including open market repurchases, negotiated block transactions, or otherwise, all or some of which may be effected through Rule 10b5-1 plans. Such transactions, if any, depend on prevailing market conditions, our liquidity and capital requirements, contractual restrictions, and other factors, and may involve material amounts.
OFF BALANCE SHEET ARRANGEMENTS
From January 1, 2026 through September 30, 2026, the Company has not entered into any material off-balance sheet arrangements or transactions with unconsolidated entities or other persons.
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