Good morning, everyone. Welcome to Gartner's third quarter 2026 earnings call.

I'm David Cohen, SVP of Investor Relations. At this time, all participants are in a listen-only mode.

After comments by Gene Hall, Gartner's Chairman and Chief Executive Officer, and Craig Safian, Gartner's Chief Financial Officer, there will be a question-and-answer session. We ask that you limit yourself to one question in order to give all our analysts a chance to participate in the call.

Please be advised that today's conference is being recorded. This call will include a discussion of third quarter 2026 financial results and Gartner's outlook for 2026 as disclosed in today's earnings release and earnings supplement, both posted to our website, investor.gartner.com.

On the call, unless stated otherwise, all references to revenue are for adjusted revenue and all references to EBITDA are for adjusted EBITDA, in each case, excluding the divested operation and with the adjustments as described in our earnings release and supplement. All contract values and associated growth rates we discuss are FX-neutral.

Any growth rates in Gene's comments are FX-neutral unless stated otherwise. All references to share counts are for fully diluted weighted average share counts unless stated otherwise.

Reconciliations for all non-GAAP numbers we use are available in the Investor Relations section of the gartner.com website. As set forth in more detail in today's earnings release, certain statements made on this call may constitute forward-looking statements.

Forward-looking statements can vary materially from actual results and are subject to a number of risks and uncertainties, including those contained in the company's 2025 annual report on Form 10-K and quarterly reports on Form 10-Q as well as in other filings with the SEC. We encourage all of you to review the risk factors listed in these documents.

Now, I'll turn the call over to Gartner's Chairman and Chief Executive Officer, Gene Hall.

Good morning. Thanks for joining us today.

Third quarter revenue, EBITDA, adjusted EPS, and free cash flow were once again ahead of expectations. Contract value growth accelerated for the third quarter in a row.

We drove sequential improvement in total net contract value increase, or NCVI. This is consistent with typical seasonality.

We again saw positive NCVI with our government clients. Demand in our US federal business continued to normalize.

Wallet retention across both GTS and GBS improved sequentially. Free cash flow on a rolling four-quarter basis is strong and outpacing EBITDA growth, and return on invested capital was more than 30%.

Our value proposition is stronger than ever, even as we continue to operate in a persistently dynamic external environment. We continue to improve our client value proposition through our BTI transformation.

As we've discussed on previous calls, we're transforming our insights across four dimensions: impact, timeliness, quantity, and client experience. AI continues to be the most requested topic across our client base.

We're delivering unparalleled client value on the subject. Our insights proactively guide more than 75,000 senior executives on the best way to get value from AI.

We guide more than 10,000 chief information officers and their teams on how to implement AI effectively. We guide more than 5,000 technology enterprises on how to build out their AI strategies.

Our clients rely on us to determine the best actions in response to the unprecedented rate of change in AI. The number of higher-impact documents in our body of insights is up mid-single digits, and we continue to grow the total number of documents at double-digit rates.

This allows us to provide powerful coverage across a broader range of mission-critical priorities. With the rapid pace of change in the world, it's essential for our clients to stay current.

To meet this need, we produce insights immediately after important events occur. The number of these insights is up significantly.

Finally, we continue to enhance the Gartner client experience, both digitally and through human interactions. Clients highly value our proactive engagement.

We're making continual improvements to our platform to be even more proactive. Gartner conferences are also an important driver of client experience.

Licensed users who attend our conferences retain at higher rates. Prospects who attend our conferences convert to clients at higher rates.

Each year, we host more than 50 technology and business conferences in key destinations around the world. IT Symposium/Xpo is our flagship conference series.

I recently returned from our 36th annual IT Symposium/Xpo in Orlando, Florida. We hosted more than 7,500 technology leaders over the four-day in-person conference.

Attendance at the conference was up double digits year-over-year. Our analysts covered a wide array of technology topics.

325 of our sessions addressed AI. Our opening keynote continued to guide leaders on their AI journeys in terms of value and risk and safety and governance.

Attendees describe the keynote as powerful, engaging, and thought-provoking. We also recently held our North American HR Symposium/Xpo.

Thousands of chief HR officers and their teams joined us for in-depth conversations on the pivotal opportunity to lead transformation in the workplace. C-level attendance and total attendance were both up.

In closing, we continue to see strong demand for our services. Our vast and growing body of high-impact, timely insights are delivering unparalleled client value, especially on the topic of AI.

Our conferences continue to be highly rated and highly valued by our attendees, and the number of executives who attend our conferences continues to grow. In the third quarter, contract value growth accelerated.

Retention improved. We drove sequential improvements in NCVI.

EBITDA, adjusted EPS, and free cash flow were once again ahead of expectations, and we're raising our annual guidance. With that, I'll hand the call over to our Chief Financial Officer, Craig Safian.

Craig?

Good morning. Contract value growth accelerated for the third consecutive quarter, underscoring the resilience of the business.

CV is the most important measure for our business and the key driver of revenue growth, profitability, and free cash flow. In Q3, we expanded margins compared with last year.

We continued to deliver strong free cash flow. Over the past four quarters, we have repurchased $1.7 billion of our stock, a benefit to the share count of close to 15% over the past year.

Senior enterprise leaders continue to deal with external factors that influence their budget and spending decisions. The business remains resilient.

As Gene discussed, we are focusing on driving even greater value for our clients by delivering more insights with higher impact faster than ever before. Q3 NCVI dollars increased sequentially from Q2 about in line with historical seasonality.

Wallet retention continues to improve as downsell remained relatively stable for the second quarter in a row. In-quarter retention rates increased in Q3 on a year-over-year basis, providing another important data point on the value we deliver to clients.

We continue to win new business with both existing clients and new enterprises. This remains an important opportunity for us to drive stronger performance in the coming quarters.

We are seeing multiple areas of above-average growth, reinforcing the value our clients place on expert insights and guidance. For example, core GBS subscription products grew 7% in the quarter, with the sales and finance practices growing high single digits.

Software and services within tech vendors grew mid to high single digits. Mid-sized enterprises again delivered mid-single-digit CV growth in the quarter.

The US federal part of the business delivered strong sequential performance, ending Q3 with about $15 million of NCVI, reflecting continued execution and client engagement across our sales, service, and analyst teams. As Gene discussed, we continue to make progress with the BTI transformation.

A key goal of the transformation is proactively driving engagement. The most important measure of engagement is retention, which flows through to NCVI.

Clients continue to engage at historically strong levels. We look at engagement in many ways across the organization.

This quarter, I want to highlight the improvements we have seen with the Gartner mobile app. This has been a focus in support of the transformation.

In the quarter, mobile engagement increased compared with the prior year as we improved usability, enabled faster response times, enhanced audio features, and embedded Ask Gartner capabilities. Across our platforms, usage of Ask Gartner has continued to grow sequentially and is up year-over-year.

As I mentioned, retention increased in the third quarter. Third quarter CV grew 2.5% year-over-year.

As I mentioned, this was the third consecutive quarter of acceleration. Revenue, EBITDA, adjusted EPS, and free cash flow in the third quarter were better than expected.

We are increasing our full year guidance across all of these measures. In the third quarter, we reduced our share count by around 1% sequentially, buying back $138 million of stock.

Rolling four-quarter return on invested capital was 34%, and we expect to generate significant free cash flow and have fewer shares outstanding over the course of the next several years. Third quarter revenue was $1.5 billion, up 2% year-over-year as reported and 3% FX-neutral.

In addition, total contribution margin was strong at 71%. EBITDA was $364 million, up 8% as reported and 7% FX-neutral.

Adjusted EPS was $3.59, up 30% from Q3 of last year. Free cash flow on an LTM basis was $1.3 billion, up 6% year-over-year.

Insights revenue in the quarter grew 2% year-over-year, both as reported and FX-neutral. Third quarter Insights contribution margin was 78%, up about 90 basis points versus last year.

As we've discussed, we continue to hire analysts in the BTI organization, which will increase costs over time. The costs came out earlier in the year and will return over the next several quarters.

Contract value was $5.3 billion at the end of the third quarter, a sequential increase of about 110 basis points from Q2. Year-over-year, CV was up 2.5%, which is an 80 basis point acceleration from last quarter.

Excluding the US federal government, CV growth was 2.8%. We had about $240 million of new business in the third quarter as there continues to be considerable interest in Gartner's proprietary, unbiased insights.

Across GTS and GBS, we saw new business dollars increase by about 1% sequentially from Q2. Global Technology Sales contract value was $4 billion at the end of the third quarter, up almost 1% sequentially and up about 2% versus the prior year, more than a 90 basis point acceleration from Q2.

Excluding the US federal business, CV grew 2.5%. Tech vendor CV grew low single digits and above the overall company average.

Software and services and small technology vendors grew mid to high single digits. Wallet retention for GTS was 98%, an improvement from the second quarter.

GTS new business was down 4% compared to last year and up modestly on a sequential basis. New business with enterprise leaders increased year-over-year in Q3.

Global Business Sales contract value was $1.3 billion at the end of the third quarter, up 1.8% from Q2 and up 3.7% year-over-year. Of our six major practices, growth was led by sales and finance, which grew high single digits.

Beyond the six major practices, we have several other smaller practices, which collectively delivered double-digit CV growth. Within GBS, about 90% of the CV is from core subscription products.

CV from these products continued to grow about 7% year-over-year in the quarter, with even faster growth from our offerings for C-level leaders. Wallet retention for GBS was 99% for the quarter.

GBS new business was down 3% in Q3 compared to last year and up 1.5% sequentially. Our Conferences business continues to perform well.

We are seeing strong demand for our insights as clients and prospects want to hear from our experts and interact with one another. Conferences revenue for the third quarter was $86 million.

On a same-conference basis, revenue growth was around 8% FX-neutral. Contribution margin was 35%.

We held 13 destination conferences in the third quarter, as planned. Q3 Consulting revenue was $126 million, up 2% year-over-year as reported and 3% FX-neutral.

Consulting contribution margin was 34% in Q3. Labor-based revenue was $94 million.

Backlog at September 30 was $217 million, up about 9% year-over-year. This was the second consecutive quarter with a year-over-year backlog increase.

In contract optimization, we had $150 million of revenue on an LTM basis, consistent with Q2 of this year. The two-year revenue CAGR was up about 13%.

As our contract optimization revenue is highly variable. EBITDA for the third quarter was $364 million, up 8% from last year as reported and 7% FX-neutral.

We outperformed expectations in the third quarter through revenue upside, effective expense management, and a prudent approach to guidance. Adjusted EPS in Q3 was $3.59, up 30% compared to Q3 last year.

Upside in adjusted EPS was driven by better-than-expected EBITDA and a lower-than-expected adjusted tax rate of about 17%. We had 64 million shares outstanding in the third quarter.

This an improvement of about 11 million shares, or approximately 15% year-over-year. We exited the third quarter with 64 million shares on an unweighted basis.

Free cash flow in the third quarter was $275 million, up 2% year-over-year. Free cash flow on a rolling four-quarter basis was $1.3 billion, which was 20% of reported revenue, 78% of adjusted EBITDA, and 136% of GAAP net income.

At the end of the third quarter, we had about $1.6 billion of cash. This includes about $500 million for running the business and around $1.1 billion available to deploy on behalf of shareholders.

Our September 30 debt balance was about $3 billion. Our reported gross debt to trailing 12-month EBITDA was under 2 times.

We repurchased $138 million of stock during the third quarter and $1.7 billion on an LTM basis. Our approach to repurchases continues to be price-sensitive, opportunistic, and disciplined.

The buyback authorization is about $1.1 billion. We expect the board will continue to evaluate and refresh the amount as needed.

We are increasing the full year revenue outlook for each of our segments to reflect recent performance and trends. For 2026, we now expect revenue at or above $6.405 billion, which is an increase from last quarter and FX-neutral growth of 1%.

We now expect full year EBITDA at or above $1.615 billion. Compared with our prior guidance, this is up $45 million.

This reflects full year margins at or above 25.2%, consistent with 2025, adjusted for the divestiture. We expect 2026 adjusted EPS at or above $14.65, an increase from last quarter that primarily reflects the increase in the EBITDA outlook.

For 2026, we expect free cash flow at or above $1.235 billion, also an increase from the prior guidance. This reflects a conversion from GAAP net income of 136%.

Our guidance is based on 66 million fully diluted weighted average shares outstanding, which incorporates the repurchases made through the end of the third quarter. We exited Q3 with about 64 million fully diluted shares.

For Q4, we expect EBITDA at or above $390 million. Our revenue, profit, and cash flow results in Q3 were ahead of expectations.

We've increased the guidance across these measures for 2026. Total CV year-over-year growth improved by 80 basis points from Q2 of 2026.

We are transforming BTI to deliver even more client value. As we have seen in the past, the current macro- and budget-driven cycle will normalize and CV growth will continue to reaccelerate.

Gartner's return on invested capital is strong at 34% on a rolling four-quarter basis. We continue to generate significant amounts of free cash flow.

We expect the conversion of GAAP net income will improve as CV accelerates. We believe this offers a durable and compelling value proposition for our shareholders.

We are positioned to accelerate CV growth, and we continue to expect to deliver adjusted EPS on a three-year compound basis from 2025 above 12%. Over time, we'll opportunistically deploy our capital on stock repurchases, which will lower the share count, and on strategic, value-enhancing tuck-in M&A.

With that, I'll turn the call back over to the operator, and we'll be happy to take your questions. Operator?

Yes. Hi.

Good morning. I wanted to ask about the external factors that you've talked about, that senior enterprise leaders continue to deal with those.

Sort of how do you think those have evolved, particularly on an ex-Fed basis? Cuz your CV growth did decelerate a little bit more, and I'm just curious sort of what are you seeing there.

Is it more related to the external environment, and if it's in line with your expectations?

Hey, Faiza, it's Craig, and then Gene will pop in in a moment, as well. I think, as we sort of think about the external factors, there were a handful of things that we outlined that are going well and with the business performing well, but there are still things like the war in the Middle East as a classic example of things that got a little bit worse from a selling environment perspective in the quarter.

As we sort of think about what's happening, nothing has changed structurally about our addressable market, the value we offer, the benefits we're seeing from the BTI transformation, etc. That all said, tough environment, particularly in some very specific places.

The highlight, I would say, is Middle East where we had and still have a really nice, and it had been a very fast-growing business for us, but given what's been going on over there, has been a more challenging selling and retention environment.

Thank you. Can you just comment on the GTS sales headcount trajectory?

I noticed there was an uptick sequentially, and I think you have quite a bit of sales capacity. I don't know if that's just timing-driven of new start classed or anything else that you're seeing that we should read from that.

Thank you.

Hey, Jeff. Obviously, sales capacity is really important to us and we really track it a lot, and manage it carefully.

Right now, we feel like we have plenty of sales capacity to grow for the next few quarters. When you look at kind of whether it goes up a little bit or down a little bit, to your point, it's kind of noise in that there are hiring cycles and things like that, and so to your point, what you're seeing there is more noise.

It's not indicative of anything systematic.

The other thing I'd add, Jeff, is, as always, we're managing with an eye towards the future, both from a cost-of-sale perspective and from a growth perspective and trying to strike the balance between having the right amount of capacity for today, but also having the right amount of capacity to continue our CV acceleration path.

Got it. Thank you.

Thanks so much. You've done a really nice job this year with controlling costs, reflected in sort of the EBITDA beats.

When you think about sort of 4Q and beyond in '27, can you talk us through some of the puts and takes for how you're thinking about margins for next year and additional areas for efficiencies and productivity that may be ahead of us? Thanks.

Sure. Good morning, Toni.

I'd say two things. One is I think Gene hit on this and I hit on this earlier, as well, the one area where we are catching up on expense relates to our analyst spend.

As we've been talking about for the last few quarters, as a part of that transformation, we let go a number of people who didn't fit the bill of what we wanted from an analyst perspective, and we've been in process of hiring, and that hiring will continue into the next few quarters. Again, we tried to be really clear about that.

That's one of the areas where we will be adding back some costs as we progress through this year and head into next year. On the other side of the coin, to your point, we're obviously very mindful of delivering on our profit and cash flow outlook and want to make sure that we are balancing the business, as I mentioned just on Jeff's question, around making sure we've got the right amount of costs and resources so that we can fulfill and deliver on what we need to fulfill and deliver to deliver on our profit and cash flow targets, but also make sure that we've got the right amount of investments rolling forward as we continue to reaccelerate the growth.

I don't think there's any magic or any secrets in there. It's really just making sure that we have the right resources in the right places at the right time to fulfill our client demands, make sure we're keeping up with client demands, and also make sure that we are seeding the ground at least a little bit for future growth, as well.

Thank you.

Hi. Good morning.

Thanks for taking my question. Could you talk about the guidance raise on the Insights revenue side, especially the part that's core, not driven by FX?

I guess was Q3 ending CV better than you had anticipated internally, or was there some sort of conversion dynamic there in the revenue? Thank you.

Hey. Good morning, Josh.

Great question. I think it was largely timing within the quarter, more than any sort of significant deviation from what our overall forecast for the quarter was for NCVI.

It was a good, solid, strong quarter from an NCVI perspective. We got the NCVI a little earlier in the quarter than we had anticipated, and that just basically flowed through into the modest raise we did for Insights revenue for the full year.

Okay. Great.

Thanks for the color.

Hi. Thanks.

Good morning. Your contract value growth is continuing to recover.

Can you give us your latest thoughts on what you're seeing in terms of the impact of AI on churn and new business wins within Insights and how that's impacting CV?

It's an interesting question, George, because we've seen a little bit of a shift in the marketplace where clients have in many cases gone out and done a large agreement with one of the AI vendors to get, say for example, a particular AI product for all of their associates. That adds to their cost, but in most cases, the vast, vast majority, there's no tangible benefits.

One of the things that we're seeing now is clients coming back to us and sort of saying, "Wow, it's a lot harder than I thought to get any benefits from AI. I've got the cost.

Where are the benefits?" They're asking us to help actually figure out, what are the right business cases, how do they manage the costs, etc., which is our sweet spot.

That's where we really shine. Again, I sort of say over the last three three months or so, we've seen a real uptick in sort of that kind of demand.

We've always had it, but it's just striking how the people that kind of sort of tried giving everyone an AI tool and not getting a benefit, now they're coming back and saying, "Hey, it's a lot harder than we thought. Gartner's what should help us."

George, the one other thing I'd add is we've talked about this the last several quarters, AI broadly is a topic that is of great interest across our entire client base. Not just limited to the technologist within our client base.

It's the CFOs, the chief marketing officers, chief supply chain officers, etc. In fact, when we look at what is the most popular topic across every major role we serve, AI is the number one.

Again, that's indicative of what's going on in the market. It's also indicative of it's the number one, but it's not the only one.

CIOs are worried about and dealing with the things Gene mentioned around AI, but they're also worried about cybersecurity, they're also worried about all sorts of other things. AI is this pervasive thing, and we're obviously meeting that demand for our clients, as it's the number one topic.

As you'd imagine, it's a great entry point for lots of prospect and new business conversations, as well. It's usually not the only thing, but it's often a great entry point for really highlighting the uniqueness and the value of a Gartner license.

Just to build on Craig's points again. For every role we serve, AI is the single biggest topic people are interested in.

It's not the only one, but it's the single biggest. If you go back a year ago, most roles AI was the biggest.

Now it's literally the biggest for every single role.

Very helpful. Thank you.

Hey, good morning. This is Keegan Antico on for Jason.

Thanks for taking my question. Is 4% CV's growth still the right exit rate for fiscal year 2026?

If so, could you just talk about the puts and takes on how you'll get there? Thanks.

Hey. Good morning.

How are you? Thanks for the question.

What I'd say is, while we continue to expect overall CV growth to continue to accelerate, it's unlikely that ex-Fed CV is going to get to that 4% level at this point, from everything we see. As we talked about a little bit earlier, NCVI in Q3 was roughly in line with the base case and what we expected.

We've updated our expectations based on what we saw in Q3 and what we're seeing and expecting from Q4. We've got a lot of the business doing well.

From where we sit today, we do not expect that CV growth rate to get all the way back to 4% by the end of the year. Again, overall CV growth, we expect to continue to accelerate.

Hi. Good morning.

Thanks for taking my question. I just wanted to circle back to the selling environment broadly.

Craig, you mentioned obviously geopolitical conflicts having some impact. Maybe excluding the business in the Middle East, are you seeing any major dislocations on sales cycles or progress selling into new logos?

Then kind of related to that, I think last quarter, you mentioned seeing some stability in downsell activity amongst larger clients. Any update there would be great.

Thank you.

As we mentioned earlier on the call, there are a number of areas where we've seen a lot of bright spots, if you look at software and IT services, small tech vendors, all the GBS practices if you exclude the leadership councils, the legacy products, and so forth, and so we're seeing a lot of areas with strength. We're also seeing, though, areas that are more challenged, and it's what you would expect, which is the biggest one being the Iran war has affected many of our clients, as Craig mentioned, in the Gulf, and then people that are downline from them that rely on them, as well.

I'd sort of say, that's the biggest change. There's still companies that are winning and losing from AI.

There's companies that are making equipment that goes into data centers, and those are in a great selling environment, and companies that are more directly hit by AI, which is a tougher selling environment. The same thing for tariffs, oil prices, and so forth.

Andrew, the one other thing I'd add is obviously the selling market is impacted by, as an example, layoffs. You've seen, and again, we've seen this over the last few years, large layoffs, particularly with large technology vendors.

That had quieted down for a little bit and obviously has picked back up again. That makes for a more challenging selling and renewing environment when you're attempting to renew a contract or sell growth in the face of that.

The other thing I'd say is sales cycles, as we've talked about the last couple of quarters, are or there's no real change, but are still longer than they have historically been because of all the craziness that our clients and prospects are dealing with. We're working through that, and again, our pipelines remain strong.

There's still a lot of interest in understanding more about the Gartner value proposition. We are closing a lot of those new business deals, as reflected in our overall new business numbers, but in a lot of cases, they are taking longer just given the increased scrutiny that comes from not having a normal sort of operating and selling environment.

Thank you. Good morning.

I was hoping you could just refresh us on the key components of the transformation you were referring to. I know in the call, you mentioned the mobile app was a big focus.

You talked about Ask Gartner. I was just curious, what are the other key things that we should be keeping an eye out on?

I'm sorry, Manav. I missed what you said in your opening statement or opening part of the question.

Could you sort of repeat that?

Just refresh us on the key components of the transformation that you've been referring to. I think you mentioned mobile app and Ask Gartner along the way.

What else is the key areas that we should be keeping an eye on?

It's a great question, Manav, because it's really a real focus for us. As we've talked about, we have this BTI transformation, and it's in four main areas.

The first one is the impact of our content. We use a number of tools to determine how many people read that actual document, and then when they did read it, what was the impact on their retention.

We're very focused on improving both the number of people that read it, as well as the impact on the retention. I think that's the first piece.

The second piece is quantity, which is just different clients have different mission-critical priorities. If we add more content, it allows us to cover a broader range of mission-critical priorities.

The third area is timeliness. In today's world, timeliness has gotten ever more important.

We're making a lot of changes there. As an example, we've introduced new content types that actually are designed to respond very, very quickly, and those content types are growing very rapidly, and the customer uptick has been very strong on those new customer types.

We're also really accelerating our training cycles. We've used to train our client-facing associates, especially, once a month, and we've moved to once a week.

We're moving faster and faster over time so that our associates can keep up with all the changes in the market. We also have a lot of clients that do consultations with our analysts.

One of the things we've found is that as the pace of the world's accelerated, some of those consultations they would like to do much more quickly. We're really setting processes in place so that for those clients that want a quick consultation in the next couple of days, we can actually arrange that where they really need it.

That's the timeliness piece. Then, lastly, there's the user experience where, as you said, we continually have been enhanced our app, the Gartner app.

Not all clients use it, but a significant portion do, and those that do really like it. We continue to enhance Ask Gartner.

We continue to enhance the basic features on our website, as well. Those are kind of the major areas that we are focused on in terms of growing the overall value that clients get.

Thank you. Gene, when I think about the current environment and if we assume there's kind of no changes as we kind of move forward, how should we think about what's realistic for wallet retention at this point?

Should we be continuing to think of maybe some modest improvement and then maybe it ebbs and flows around 100% or just any color of how we should think about the mechanics of wallet retention from here on out?

Surinder, the way that we think about the wallet retention is, again it starts with all of our content and the way we deliver value to clients. The whole BTI transformation I just talked about a moment ago is focused on making sure that clients get even more value from our content, both from the actual nature of the content itself, but also how timely it is, how they access it, and so forth.

The first piece in terms of driving overall retention is making sure that that BTI transformation proceeds, as I said, we feel like it's proceeding at a good pace. As that continues, we believe more clients will retain.

In addition to that, all those changes we make are just as good for new business, which helps with the wallet retention. I see where the changes we're making in terms of BTI transformation as ultimately driving both retention and new business, which then, in turn, drives the wallet retention.

Surinder, just to put a finer point on that point, as well, the way to think about it is, all the improvements we're making largely, we can talk about different engagement measures and things like that, ultimately, it's retention that is the ultimate measure of is the BTI transformation delivering value or not. As we continue to see improvements in retention, like we highlighted this quarter, obviously, you can't grow a client enterprise if they're not retaining.

The way we think about it, and it's worked this way in the business for 25 years is when we have happy clients who are getting huge value and retaining year after year after year, that becomes easier to sell, to take our price increase on it and to find incremental license users within the enterprise as well. We do expect, as a part of that CV reacceleration, wallet retention continuing to improve, as well, for all the reasons Gene highlighted.

Got it. I guess just as a clarification, the idea is that you can trend towards historical.

I guess that was the question, which is or is there something structural in the current environment that keeps us below historical? I think that was the question I was trying to get to rather than the directionality of it.

I think that, as we pivot to the future, there have been a handful of things that have impacted that measure, most notably, as we've talked about the last couple of quarters, had been downsell. As we've detailed the last two quarters, there's always downsell, but we've seen downsell stabilizing.

That's a very positive structural change that we're seeing as we move forward. Then all the improvements we're making, again, I can't say exactly what wallet retention will look like two or three years from now, but we fully expect it to be a contributor to our CV reacceleration going forward.

Thank you.

Hey, good morning, guys. Maybe just to follow up on kind of the discussion around ex-Fed CV growth rate exiting the year, I guess if it won't be 4%, what's kind of a reasonable exit rate for us to think about ex-Fed at the end of '26?

Hey. Good morning, Jasper.

[laughter] We have a long-standing practice of not really guiding around contract value. I think the moral of the story is, we fully expect the CV growth rate in total to accelerate from where we are today.

Fed makes up between 2 and 3% of the CV and, obviously, ex-Fed makes up 97 to 98% of the CV. We fully expect the total to continue to accelerate through the end of this year.

Hey. Good morning, guys.

Thanks for taking my question. Maybe just on the US Fed business and the $15 million of NICKV that you saw during the quarter, wondering if you can maybe sort of split that out between what you would call maybe returning business versus incremental demand that you're seeing out of the US Fed end market.

Thanks.

It's a mix, basically. I don't have the exact mix in front of me, but it is a mix, which is we have some clients who, after going through what they went through, decided there's a lot of value with Gartner, made the business case to their organization, and bought again.

Then we also had demand from totally new clients that we hadn't had before. It's actually a mix of both.

Thank you.

Thank you so much. I was wondering if you can give us a little color on the pricing environment.

If I remember correctly, you raised prices earlier this week. How did that compare to last year?

I know some of the other companies in the space are trying to extend the term of the contracts, maybe giving some pricing discounts, etc. Is there anything that you're doing along those lines?

Thanks.

Hey. Good morning, Jeff.

Thanks for the question. On pricing, as you noted, our standard price increase goes into effect on November 1 or, in this case, November 2, which was yesterday.

Historically, we've run between 3 and 4% as our standard price increase. This year, given the environment, we're closer to the 3% end of the range.

Largely, a little bit lower than last year, but sort of within rounding of what we did last year, as well. Again, we continue to improve significantly the products and the offerings, and the experience, and the insights, etc.

Generally speaking, the 3% is noncontroversial to some extent. Again, if you think about an average contract size of $300 to $350,000 a year, a 3% increase is not big, not huge dollars.

The difference between 3 and 3.5 is not huge dollars either. We feel pretty good about the level of price increase as we roll into the last two months of this quarter and into next year.

Are you extending any terms or changing the terms in order to get some benefits on the pricing side?

No. It is our long-standing practice, we've built what we think to be a really strong business model, and a lot of that business model is reliant on sticking to the terms that reinforce and support that business model.

We have a team that helps our sellers and works with our clients when there are challenges, but, by and large, we are sticking to our standard terms and conditions on contracts because it's so important to the value we deliver, not only to our clients, but to our shareholders, as well.

Thanks so much.

Hey. Good morning, guys.

This is Bill Qi on for Ashish Sabadra. Appreciate you taking our question.

You've talked about holding quota-bearing headcount in that 5,000 range as you look for productivity improvements. Over the past few quarters, we've seen some improvements sequentially there.

How should we think about the threshold of productivity where you guys get comfortable again reinvesting in that headcount for longer-term CV reacceleration?

It's a great question. I think a lot of it is not necessarily the point-in-time result.

It's more how the business is looking and flowing, and what forecasts and pipelines, etc., look like. I do think it really important to underscore that under the covers, we've talked about this in the past, where every time we have turnover, we are looking at optimizing where we want to put the dollars associated with that turnover.

In many cases, it is a straight backfill, but in a lot of cases, we are collapsing a territory, redeploying the accounts within it, and then reinvesting in an area where we think there's better short-term and medium-term growth and profitability opportunities. Under the covers that the headline number wouldn't change in the scenario I just outlined, but we are doing all of that redeployment under the covers, and we're doing that as aggressively or more aggressively than we've ever done it.

I think it really comes down to, as we sort of run our scenarios out, where we see continued acceleration, that will give us the confidence to go back to adding incremental territories going forward. I think, while we've seen some nice sequential improvements in productivity, we obviously have a lot of latent productivity opportunity baked into the system, and we want to make sure that we're taking advantage of that and getting yield on that investment while we're looking at where the next best territories or incremental territories are to add going forward.

Hey, good morning. This is Ryan Rivera on for Curtis Nagle.

I was just curious, given the moderation in buybacks in 3Q and the increase in share price over the last several months, has anything changed in how you're thinking about capital allocation? Thank you.

Hey. Good morning.

Great question. No change in the way we're thinking about capital allocation.

We over time plan to return capital through opportunistically price-sensitive buybacks and strategic, value-enhancing tuck-in M&A. As you noted, the stock did run in August.

We typically don't chase the stock when it runs. That all said, over the last 12 months, we've bought back $1.7 billion worth of our stock, which is more than 130% of the free cash flow we generated over that time.

I think we've bought back something like $7.3 billion since the start of 2021. We were in the market in Q3 only at $138 million, another 1% reduction in our share count.

I think that's the long answer. The short answer is no change to our capital allocation strategy.

We'll continue to look at deploying our capital through share repurchases by being price-sensitive, opportunistic, and disciplined.

Thank you.

Here's what I'd like you to take away from today's call. Gartner has a powerful, enduring value proposition.

We have a vast and growing body of high-impact, timely insights. These insights guide tens of thousands of leaders and their teams in achieving their mission-critical priorities, especially on the topic of AI.

Our conferences continue to be highly rated, highly valued by our attendees, and the number of executives who attend our conferences continues to grow. In the third quarter, contract value growth accelerated.

Retention improved. We drove sequential improvements in NCVI.

EBITDA, adjusted EPS, and free cash flow were once again ahead of expectations. We've raised our annual guidance, and we remain incredibly optimistic about our future.

Thanks for joining us today, and I look forward to updating you again next quarter.