Explain Gartner’s non-subscription revenue business in detail.

Python

import re

files = [
"Gartner Headcount: Key Growth Indicator",
"IT_All_Transcripts.txt",
"Gartner's Revenue and Margin Guidance",
"Analyzing QoQ and Sequential Changes"
]

results = {}
keywords = ["non-subscription", "non subscription", "Digital Markets", "Capterra", "Software Advice", "GetApp", "quarter"]

for file in files:
try:
with open(file, "r", encoding="utf-8") as f:
text = f.read()
# find paragraphs
paragraphs = text.split('\n\n')
matches = []
for p in paragraphs:
if any(kw.lower() in p.lower() for kw in ["non-subscription", "non subscription", "digital markets"]):
matches.append(p.strip())
if matches:
results[file] = matches
except Exception as e:
results[file] = f"Error: {e}"

for k, v in results.items():
print(f"--- {k} ---")
if isinstance(v, list):
for p in v[:5]: # print first 5 matches to avoid too much output
print(p[:500] + "...")
else:
print(v)
print("\n")

Code output

--- Gartner Headcount: Key Growth Indicator ---
Error: [Errno 2] No such file or directory: 'Gartner Headcount: Key Growth Indicator'

--- IT_All_Transcripts.txt ---
Error: [Errno 2] No such file or directory: 'IT_All_Transcripts.txt'

--- Gartner's Revenue and Margin Guidance ---
Error: [Errno 2] No such file or directory: "Gartner's Revenue and Margin Guidance"

--- Analyzing QoQ and Sequential Changes ---
Error: [Errno 2] No such file or directory: 'Analyzing QoQ and Sequential Changes'

Python

import os
print(os.listdir('.'))

Code output

[]

Python

import os
def find_files(filename, search_path='/'):
result = []
for root, dir, files in os.walk(search_path):
if filename in files:
result.append(os.path.join(root, filename))
return result

print(find_files("IT_All_Transcripts.txt", "/"))

Code output

['/home/bard/IT_All_Transcripts.txt']

Python

import os
files = [
"/home/bard/Gartner Headcount: Key Growth Indicator",
"/home/bard/IT_All_Transcripts.txt",
"/home/bard/Gartner's Revenue and Margin Guidance",
"/home/bard/Analyzing QoQ and Sequential Changes"
]

results = {}
for file in files:
try:
with open(file, "r", encoding="utf-8") as f:
text = f.read()
paragraphs = text.split('\n\n')
matches = []
for p in paragraphs:
if any(kw in p.lower() for kw in ["non-subscription", "digital markets", "capterra", "getapp", "software advice", "concern"]):
matches.append(p.strip())
results[file] = matches
except Exception as e:
results[file] = str(e)

for k, v in results.items():
print(f"--- {k.split('/')[-1]} ---")
if isinstance(v, list):
for i, p in enumerate(v[:5]):
print(f"[{i}] {p[:300]}...")
else:
print(v)
print("\n")

Code output

--- Gartner Headcount: Key Growth Indicator ---
[0] - Rising Average Tenure Due to Low Turnover: Management highlighted that their
sales force turnover is currently at near-record lows. This strong
retention, coupled with their ability to attract top talent (receiving
around 200 applicants per job), has allowed the overall average tenure ...
[1] - Macroeconomic Pressures on Tech Vendors: As small technology vendors faced
funding constraints and higher interest rates, many aggressively cut back on
discretionary marketing and lead-generation spending, directly impacting
Gartner's non-subscription revenue.
- Shifting Web Traffic ...

--- IT_All_Transcripts.txt ---
[0] During 2025, we also took several shareholder value-enhancing actions, including
repurchasing $2 billion of Gartner stock, increasing leverage with a successful
inaugural investment-grade bond offering to support even more share repurchase
capacity, adding two new directors who bring unique and valu...
[1] The US dollar weakened significantly over the course of 2025, causing this
adjustment to be larger than most years.We've also provided several quarters of
historical data to reflect the updated financials for the digital markets
divestiture on page 22 of the earnings supplement.Conferences revenue f...
[2] We've not included the digital markets business in the outlook.For insights
revenue, our guidance reflects Q4 2025 contract value and our CV growth rate
accelerating over the course of 2026.First quarter and first half NCVI are
important inputs to calendar 2026 revenue growth.We have taken a prudent...
[3] It's in a reaction to set to position the business so, that even if the world
doesn't get better, that we can get back to the kind of growth rate that we've
had historically, meaning the double, you know, double-digit growth, even in a
really bad environment, because we've enhanced our BTI offerings...
[4] And again, to your point, I think, you know, our salespeople, it's not, if
anything, Q4 is less of an issue or less of concern than even before.But we try
to track it very carefully.We try to be eyes open about it, and we don't see it
as, you know, as something that is restraining our growth, as opp...

--- Gartner's Revenue and Margin Guidance ---
[0] - Transforming the Core Insights Business (BTI): Management is driving a major
transformation in their core Business and Technology Insights (BTI) segment
across four dimensions: impact, volume, timeliness, and user experience. The
primary goal is to significantly increase client engagem...
[1] - The "Downsell vs. Cancellation" Dynamic: If Gartner's product was losing its
fundamental value or facing a structural decline, clients would cancel their
subscriptions entirely. Instead, management notes that clients are primarily
downselling (e.g., dropping from 10 licensed seats to 8...

--- Analyzing QoQ and Sequential Changes ---

Python

results_full = []
for p in paragraphs:
if "non-subscription" in p.lower() or "digital markets" in p.lower() or "capterra" in p.lower() or "software advice" in p.lower():
results_full.append(p)

with open("/home/bard/IT_All_Transcripts.txt", "r", encoding="utf-8") as f:
text = f.read()
for p in text.split('\n\n'):
if "digital markets" in p.lower() or "non-subscription" in p.lower() or "quarter over quarter" in p.lower() or "qoq" in p.lower():
if len(p) < 1000:
results_full.append(p)

print(len(results_full))
for res in results_full[:10]:
print(res)

Code output

61
During 2025, we also took several shareholder value-enhancing actions, including
repurchasing $2 billion of Gartner stock, increasing leverage with a successful
inaugural investment-grade bond offering to support even more share repurchase
capacity, adding two new directors who bring unique and valuable skills to our
board, rotating our board committee chairs, and entering into a definitive
agreement to sell our Digital Markets business.In summary, the world is changing
more than ever before.This represents a huge opportunity for us.Gartner is an
insights business that guide
s the leaders who shape the world.The key to capturing our opportunity while
operating under a challenging selling environment, is to help clients engage
more frequently with our insights.In 2025, we began transforming Business and
Technology Insights along four dimensions: impact, volume, timeliness, and user
experience.
We've not included the digital markets business in the outlook.For insights
revenue, our guidance reflects Q4 2025 contract value and our CV growth rate
accelerating over the course of 2026.First quarter and first half NCVI are
important inputs to calendar 2026 revenue growth.We have taken a prudent view of
NCVI phasing because Q1 is a seasonally important quarter for renewals.As
always, we have high visibility into our insight's revenue based on our
ending 2025 contract value.For conferences, we are basing our guidance on the 56
in-person destination conferences we have planned for 2026.We expect similar
seasonality
to what we saw in 2025, with Q4 the largest quarter, followed by Q2.We expect
gross margins in the second quarter to be the highest of the year for the
conferences segment.
It's in a reaction to set to position the business so, that even if the world
doesn't get better, that we can get back to the kind of growth rate that we've
had historically, meaning the double, you know, double-digit growth, even in a
really bad environment, because we've enhanced our BTI offerings so much.So, as
a result of that, two of the things you mentioned were as a result of that.So,
one of them, we decided that our Digital Markets business didn't fit in that
vision, and so we made the decision after careful analysis that that didn'
f the business.
We will generate more free cash flow and have fewer shares outstanding over the
course of the next several years.This, coupled with accelerating growth in 2026
and beyond, will create significant value for shareholders.Third-quarter revenue
was $1.5 billion, up 3% year-over-year as reported and 1% FX neutral.In
addition, total contribution margin was 69%, up 90 basis points from last
year.EBITDA was $347 million, up 2% as reported.FX was a 3-point benefit in the
quarter.Adjusted EPS was $2.76, up 10% from Q3 of last year.Free cash flow was
$269 million, as our year-to-date performance remained strong.During the
quarter, we made a change in our segment reporting structur
e.Most of the insights' non-subscription revenue is now reported as other
revenue in the P&L.Insights, which is almost 100% recurring subscription
revenue, remains our largest, most profitable operating segment.
Got it.That makes sense.Thank you.And then as a follow-up, I'm curious if you
could comment on the non-subscription business.You mentioned, and we've seen in
the release that it's been moved to the other segment.I'm curious how you're
thinking strategically about that business.I know it's been softer recently, so
if you could talk about your plans to re-accelerate that, that'd be very
helpful.Thank you.Yeah.
Got it.The client count ticked down a little bit quarter over quarter again.Is
that primarily on the small tech vendor piece
?Do you expect client count to stabilize or increase in 2026 if small tech
vendor picks up?
Hey, good morning, guys.Thank you for taking my question.Just one for me.I just
wanted to get a little bit more color on the quota-bearing headcount trend, just
seeing kind of the increase quarter over quarter in GTS and down quarter over
quarter in GBS.Just given that kind of see GBS as being a kind of stronger
growth engine for the business, just wondering if you can talk about the
dynamics going on there.Thanks.
Non-subscription Insights revenue continues to be affected by shifts in traffic
volumes.Second quarter Insights contribution margin was 74%, up 20 basis points
versus last year.Contract value was $5 billion at the end of the second quarter,
up 5% versus the prior year.Contract value and CV growth are FX neutral
excluding the U.S. federal government.CV growth was about 150 basis points
faster at around 6%.Global NCVI in the quarter excluding the U.S. federal
government was positive $13 million.CV growth was broad based across practices,
industry sectors, company sizes, and geographic regions.Across our combined
practices, all the industries except public sector grew at high
s, wallet retention was over 100%.GTS new business was down 8% compared to last
year.
At this point in the year, we have very high visibility into the Insights
subscription revenue for calendar 2025.We've also incorporated the information
we have about U.S. federal spending decisions to date.In addition, we've taken a
prudent view of the outlook while the selling environment remains challenging
and we've seen longer sales cycles.We entered Q3 with double-digit
year-over-year growth in both GTS and GBS new business pipelines.For the
non-subscription part of the Insights segment, we've built a continuation of
recent traffic and pricing trends into the guidance for Conferences.We are
basing our guidance on the 53 in-person destination Conferences we have planned
for 2025.We have good visibility into current year revenue with a majority of
what we've guided already under contract.For Consulting, we have more visibility
into the next quarter or two based on the composition of our backlog and
pipeline.
As usual, cost optimization has had several very strong
years and the business remains highly valuable.Our updated 2025 guidance is as
follows.We expect Insights revenue of at least $5.255 billion, which is
FX-neutral growth of about 2%.This reflects subscription Insights revenue growth
of about 4%.We expect around $210 million of non-subscription revenue.We expect
Conferences revenue of at least $625 million, which is FX-neutral growth of
about 5%.This is unchanged from last quarter.We expect Consulting revenue of at
least $575 million, which is growth of about 1%.FX-neutral, this is also
unchanged from last quarter.The result is an outlook for consolidated revenue of
at least $6.455 billion, which is FX-neutral growth of 2%.We now expect full
year adjusted EBITDA of at least $1.515 billion, down $20 million from our prior
guidance.This reflects margins of 23.5%, consistent with last quarter's outlook.

Python

import re

with open("/home/bard/IT_All_Transcripts.txt", "r", encoding="utf-8") as f:
text = f.read()

# Let's search for "quarter over quarter" near "non-subscription" or "digital markets"
for p in text.split('\n\n'):
if "non-subscription" in p.lower() or "digital markets" in p.lower() or "capterra" in p.lower() or "software advice" in p.lower() or "getapp" in p.lower():
if "revenue" in p.lower():
print(">>>", p)

Code output

>>> The US dollar weakened significantly over the course of 2025, causing this
adjustment to be larger than most years.We've also provided several quarters of
historical data to reflect the updated financials for the digital markets
divestiture on page 22 of the earnings supplement.Conferences revenue for the
fourth quarter was $286 million.On a same-conference basis, revenue growth was
around 8% FX neutral.Contribution margin was 51%.We held 14 destination
conferences in the fourth quarter as planned.Full year conferences revenue
grew 11% to $645 million.FX neutral growth was 9%.Contribution margin was 50%.Q4
consulting revenue was $134 million, compared with $153
ing the total to about $1.2 billion.We expect the board will continue to refresh
the authorization as needed.As we continue to repurchase stock, we create value
for our shareholders through EPS accretion and increasing returns on invested
capital.Before providing the 2026 guidance details, I want to discuss our base
level assumptions and planning philosophy for the year.
>>> We've not included the digital markets business in the outlook.For insights
revenue, our guidance reflects Q4 2025 contract value and our CV growth rate
accelerating over the course of 2026.First quarter and first half NCVI are
important inputs to calendar 2026 revenue growth.We have taken a prudent view of
NCVI phasing because Q1 is a seasonally important quarter for renewals.As
always, we have high visibility into our insight's revenue based on our
ending 2025 contract value.For conferences, we are basing our guidance on the 56
in-person destination conferences we have planned for 2026.We expect similar
seasonality
to what we saw in 2025, with Q4 the largest quarter, followed by Q2.We expect
gross margins in the second quarter to be the highest of the year for the
conferences segment.
>>> We will generate more free cash flow and have fewer shares outstanding over the
course of the next several years.This, coupled with accelerating growth in 2026
and beyond, will create significant value for shareholders.Third-quarter revenue
was $1.5 billion, up 3% year-over-year as reported and 1% FX neutral.In
addition, total contribution margin was 69%, up 90 basis points from last
year.EBITDA was $347 million, up 2% as reported.FX was a 3-point benefit in the
quarter.Adjusted EPS was $2.76, up 10% from Q3 of last year.Free cash flow was
$269 million, as our year-to-date performance remained strong.During the
quarter, we made a change in our segment reporting structur
e.Most of the insights' non-subscription revenue is now reported as other
revenue in the P&L.Insights, which is almost 100% recurring subscription
revenue, remains our largest, most profitable operating segment.
>>> Non-subscription Insights revenue continues to be affected by shifts in traffic
volumes.Second quarter Insights contribution margin was 74%, up 20 basis points
versus last year.Contract value was $5 billion at the end of the second quarter,
up 5% versus the prior year.Contract value and CV growth are FX neutral
excluding the U.S. federal government.CV growth was about 150 basis points
faster at around 6%.Global NCVI in the quarter excluding the U.S. federal
government was positive $13 million.CV growth was broad based across practices,
industry sectors, company sizes, and geographic regions.Across our combined
practices, all the industries except public sector grew at high
s, wallet retention was over 100%.GTS new business was down 8% compared to last
year.
>>> At this point in the year, we have very high visibility into the Insights
subscription revenue for calendar 2025.We've also incorporated the information
we have about U.S. federal spending decisions to date.In addition, we've taken a
prudent view of the outlook while the selling environment remains challenging
and we've seen longer sales cycles.We entered Q3 with double-digit
year-over-year growth in both GTS and GBS new business pipelines.For the
non-subscription part of the Insights segment, we've built a continuation of
recent traffic and pricing trends into the guidance for Conferences.We are
basing our guidance on the 53 in-person destination Conferences we have planned
for 2025.We have good visibility into current year revenue with a majority of
what we've guided already under contract.For Consulting, we have more visibility
into the next quarter or two based on the composition of our backlog and
pipeline.
>>> As usual, cost optimization has had several very strong
years and the business remains highly valuable.Our updated 2025 guidance is as
follows.We expect Insights revenue of at least $5.255 billion, which is
FX-neutral growth of about 2%.This reflects subscription Insights revenue growth
of about 4%.We expect around $210 million of non-subscription revenue.We expect
Conferences revenue of at least $625 million, which is FX-neutral growth of
about 5%.This is unchanged from last quarter.We expect Consulting revenue of at
least $575 million, which is growth of about 1%.FX-neutral, this is also
unchanged from last quarter.The result is an outlook for consolidated revenue of
at least $6.455 billion, which is FX-neutral growth of 2%.We now expect full
year adjusted EBITDA of at least $1.515 billion, down $20 million from our prior
guidance.This reflects margins of 23.5%, consistent with last quarter's outlook.
>>> First quarter revenue was $1.5 billion, up 4% year-over-year as reported and 6%
FX neutral.In addition, total contribution margin was 69%, up 20 basis points
(bps) from last year.EBITDA was $385 million, up 1% as reported and 3% FX
neutral versus the first quarter of 2024.Adjusted EPS was $2.98, up 2% from Q1
of last year.Free cash flow was $288 million, a very strong performance for a
first quarter.Research revenue in the quarter grew 4% year- over- year as
reported and 6% FX neutral.Subscription revenue grew 8% FX
neutral.Non-subscription research revenue was in line with our
expectations.First quarter research contribution margin was 74%, consistent with
last year.Contract Value was $5.1 billion at the end of the first quarter, up 7%
versus the prior year.Contract value and CV growth are FX neutral.Excluding the
U.S.
>>> In closing, Gartner delivered financial results ahead of expectations.Tech
vendors' CV growth continued to accelerate.We have a powerful client value
proposition and a vast addressable market opportunity.We will continue to create
value for our shareholders by providing actionable objective insight, guidance,
and tools to our clients, prudently investing for future growth, and returning
capital to our shareholders through our share repurchase program.We expect to
deliver modest margin expansion over time and will continue to generate
significant free cash flow well in excess of net income.All of this and more
positions us to drive long-term double-digit revenue growth and sustain our
track record of success far into the future.With that, I'll hand the call over
to our Chief
quarter from our tax planning initiatives.Free cash flow was $311 million, a
very strong finish to the year.We ended the quarter with 21,044 associates,
up 4% year-over-year.We have a great team across Gartner driven by a very
compelling associate value proposition.Moving into 2025, we are in an excellent
position from a talent and tenure perspective with a strong hiring plan for the
coming year.Research revenue in the fourth quarter grew 5% year-over-year as
reported and 6% FX neutral.Subscription revenue grew 8% on an FX neutral
basis.Non-subscription revenue was in line with our expectations and
guidance.Fourth quarter research contribution margin was 74%, consistent with
the prior year period.For the full year 2024, research revenue increased by 5%
as reported and FX neutral.The gross contribution margin for the year was 74%.
>>> We delivered $50 million of contract optimization revenue in Q4.The quarter was
very strong, with more and larger deals compared with last year.About $8 million
were pulled forward from the first quarter of 2025.Our contract optimization
revenue is highly variable.Full year consulting revenue was up 9% on a reported
and FX neutral basis.Gross contribution margin was 36% compared to 35%
in 2023.Consolidated cost of services increased 9% year-over-year in the fourth
quarter as reported and 8% on an FX neutral basis.The biggest driver of the
increase was hig
search revenue growth is a function of three primary factors.First, the 2024
ending contract value.Second, the timing and slope of the continued CV
acceleration.And third, the performance of non-subscription revenue.Starting
with research subscription revenue, which was 77% of 2024 consolidated
revenue.Our guidance reflects CV continuing to accelerate during 2025.
>>> The non-subscription part of the research segment was about 5% of consolidated
revenue in 2024.We built into the guidance a continuation of second half traffic
trends.If the underlying fundamentals of this portion of the segment improve,
we'll be able to increase the full year outlook.For conferences, which was
about 9% of 2024 revenue, we are basing our guidance on the 53 in-person
destination conferences we have planned for 2025.We expect similar seasonality
to what we saw in 2024, with Q4 the largest quarter, followed by Q2.We expect
gross margins in the second quarter to be the highest of the year for the
conference segment.We have very good visibility into 2025 revenue, with a
majority of what we've guided already under contract.This is con
sistent with last year.
>>> That's helpful, and then maybe just on the non-subscription revenue part of the
business, can you maybe talk about where you believe you are in that part of the
strategic shift, maybe how demand pricing has evolved versus the expectations
over the last year and where you think it's going to head to or what's in the
assumptions for 2025,
>>> Adjusted EPS was $2.50 compared with $2.56 in Q3 of last year, and free cash
flow, including the insurance-related proceeds, was $565 million.Research
revenue in the third quarter grew 5% year over year as reported and FX
neutral.Subscription revenue grew 7% FX neutral.Non-subscription research
revenue was in line with our expectations.Third quarter research contribution
margin was 74%, consistent with last year.Contract value was $5 billion at the
end of the third quarter, up 7% versus the prior year and up about $104 million
from the second quarter.CV from enterprise function leaders across GTS and GBS
grew 9%.Contract value and CV growth are FX neutral.CV growth was broad-based
across practices, industry sectors, company sizes, and geograph
segments: research, conferences, and consulting.Our EBITDA guidance reflects Q3
upside and an increased outlook for Q4.
>>> Hey, good morning, and thanks for taking my questions.I'm curious if you could
talk about what you're expecting for non-subscription revenue this year.I think
on the last call, you talked about $305 million.
>>> And I think there were some comments on this call that it would be similar.So I
was curio
us if that's still the expectation.And the reason I ask is because it does seem
to imply a pretty substantial decline in 4Q, but the compares do get a lot
easier.So I'm just curious if I have that right, and then maybe how you're
thinking about that non-subscription revenue going forward.Thanks.
>>> Thank you, Gene, and good morning.Second quarter contract value grew 7%
year-over-year, accelerating about 50 basis points from Q1.We believe the first
quarter marked the bottom for CV growth this cycle, ba
rring a meaningful shift in the macro or geopolitical environment.Growth may
vary from quarter to quarter, but we expect the overall trend will be higher
from the 6.9% we delivered in the first quarter.Over the medium term, we expect
both GTS and GBS to grow 12%-16%.Second quarter revenue, EBITDA, and EPS all
came in ahead of our expectations.We are updating our guidance based on the Q2
results, FX, and a change in non-subscription research revenue.We have
repurchased $565 million of stock through June and remain eager to buy back
stock opportunistically.
>>> Second quarter revenue was $1.6 billion, up 6% year-over-year as reported,
and 7% FX neutral.In addition, total contribution margin was 68%, about in line
with last year.EBITDA was $416 million, up 8% as reported, and 10% FX neutral
versus second quarter of 2023.Adjusted EPS was $3.22, up 13% from Q2 of last
year, and free cash flow was $341 million.Research revenue in the second quarter
grew 5% year-over-year as reported, and 6% on
an FX neutral basis.Subscription revenue grew 7% FX neutral.The year-over-year
change in non-subscription revenue was similar to Q1 2024.Second quarter
research contribution margin was 74%, consistent with last year.
>>> We have more than $1 billion of repurchase capacity after the board recently
increased our share buyback authorization by $600 million.As we continue to
repurchase shares, our capital base will shrink.Over time, this is accretive to
earnings per share, and combined with growing profits, also delivers increasing
returns on invested capital.We are updating our full-year guidance to reflect
recent performance and trends.The outlook for subscription research is higher
based on the latest FX rates.We increased the outlook for conferences and
consulting, and our EBITDA guidance primarily reflects Q2 upside, partially
offset by our updated non-subscription research outlook.For subscription
research, which was about 76% of revenue in 2023, we continue to innovate and
provide a very compelling value proposition for clients and prospects.
>>> Executives
and their teams face uncertainty and challenges, and they recognize how Gartner
can help regardless of the economic environment.For subscription research
revenue, based on Q2 results and our outlook for the balance of the year, our FX
Neutral guidance is unchanged.We have very high visibility into the subscription
research revenue at this point in the year.For non-subscription research, which
was about 6% of 2023 revenue, we helped small businesses find the right
software.We've updated our outlook for this portion of the segment, given the
most recent trends.We now expect non-subscription revenue of about $305 million
for 2024.As a reminder, about one-third of our revenue and operating expenses
are denominated in currencies other than the U.S. dollar.
>>> Yeah, sure, Toni.I mean, the first thing I'd say is that the entire operational
change relates to the non-sub piece.The subscription revenue piece of the
overall research revenue, I mean, it's up a little bit from foreign exchange,
but from an operational perspective, the guidance is essentially unchanged from
last quarter.And again, you know, as we talked about last quarter, we believed
that the bottom was going to be either Q1 or Q2, and so, you know, we had a
strong, solid Q2 of NCVI, and CV growth dialed into our outlook.And so
everything, all t
he change relates to non-subscription business.
>>> For research revenue, based on Q1 results and our outlook for the balance of the
year, our guidance on an FX-neutral basis is unchanged.The guidance also
reflects a CV growth rate reaccelerating this year.New business strength and
improvements in retention would lead to upside to our guidance.Research
subscription revenue growth will likely lag CV growth reacceleration by about a
quarter or two on an FX-neutral basis.The non-subscription revenue outlook
continues to reflect the shift to higher-quality traffic sources we discussed
last quarter.We saw pricing stabilizing over the past
few months.An improvement in pricing would represent upside to the guidance.The
first quarter for conferences is seasonally small.We continue to expect strong
performance for the full year.We expect similar seasonality to what we saw
in 2023, with Q4 the largest quarter, followed by Q2.
>>> EBITDA was $386 million, ahead of our guidance, primarily as a result of
disciplined cost management.Adjusted EPS was $3.04, and free cash flow was $196
million.We finished the quarter with 20,237 associates, up 5% excluding the 2023
divestiture, and about the same as Q3.We have a great team across Gartner,
driven by a very compelling associate value proposition.Moving into 2024, we are
in an excellent position from a talent and tenure perspective.Research revenue
in the fourth quarter grew 6% year-over-year as reported, and 5% FX
neutral.Subscription revenue grew 8% on an organic FX neutral bas
is.Non-subscription revenue performance in the quarter reflects a shift to
higher quality traffic.
>>> Before providing the 2024 guidance details, I want to discuss our base level
assumptions and planning philosophy for 2024.For research, we continue to
innovate and provide a very compelling value proposition for clients and
prospects.Executives and their teams face uncertainty and challenges, and they
recognize how Gartner can help regardless of the economic environment.The
outlook for 2024 research revenue growth is a function of three primary
factors.First, 2023 ending contract value.Second, the timing of growth bottoming
and the slope of the re-acceleration, and third, the performance of
non-subscription revenue.Starting with the research subscription revenue, which
was 76% of 2023 consolidated revenue.Our guidance reflects CV bottoming and
re-accelerating during 2024.First quarter and first half NCVI are important
inputs to calendar 2024 revenue growth.
>>> We have taken a prudent view of NCVI
phasing because Q1 is a seasonally important quarter for tech vendor
renewals.With the majority of our contracts being multi-year, some haven't come
up for renewal during the tech sector's recalibration.Research subscription
revenue will likely bottom about one quarter after contract value growth
bottoms.If new business continues to perform well and retention is better than
we've incorporated into the plan, there would be upside to our guidance.The
non-subscription revenue is about 6% of consolidated revenue in 2023.In this
part of the business, we help small business buyers find the best software for
their needs and help sellers find customers.This adds a lot of tangible value
for both groups.The outlook built into the 2024 guidance reflects a shift to
higher quality traffic sources.
>>> We have the recruiting capacity to go faster, depending on how the year plays
out, and we have other levers, like increased tenure, to support CV growth
in 2024.At current rates, FX will be approximately neutral to growth for the
full year.Our guidance for 2024 is as follows: We expect research revenue of at
least $5.15 billion, which is FX neutral growth of about 5%.The research revenue
guidance reflects a prudent plan for NCVI performance and a recalibration of the
non-subscription part of the business.The guidance reflects subscription revenue
growth in the high single digits.We
expect conferences revenue of at least $560 million, which is FX neutral growth
of about 10%.We expect consulting revenue of at least $530 million, which is
growth of about 3% FX neutral.
>>> Hey, good morning, Jeff.Thanks for the question.I'll give it a start, and then
Gene will chime in as well.You know, I think, you know, just starting with the
facts, the non-subscription part of the business was about 6% of 2023
revenue.Obviously, we have had the tech market pressure for the full year, and
the way that mostly manifested itself through our results was real pressure on
pricing throughout the full year.You know, we saw that, we adjusted coming out
of Q2 earnings.You know, the good news is pricing has been roughly stable, you
know, since we made that adjustment.
>>> Hey, guys.Good morning.I think maybe first, just a clarification.When you talk
about your research revenue guide, I think backing into it, and it kind of
implies a non-subscription revenue growth of down, like, down low double
digits.Is that the right way to think about what's baked into your model?
>>> Not guiding, but pointing this way for the last several quarters, that this was
going to be the reality for 2024, which is we're gonna get back on our normal
cadence of investing for the future and growing our sales force and growing
other areas.We are dealing with the CV deceleration through 2023, and obviously,
that has an impact on 2024 revenues.Obviously, the non-subscription revenue
performance also mutes the overall revenue as well, as does the consulting
growth rate, which, while still within our medium-term guidance, given we had
such a strong year in contract optimization, we're being, you know, thoughtful
about, you know, the growth rates there.
>>> Even as we invest for future growth, we'll return significant levels of excess
capital to our shareholders.This reduc
up 6% from the prior year and 1% from the end of the second quarter.We remain
well-positioned from a talent perspective as our associates continue to move up
the tenure curve.Research revenue in the third quarter grew 6% year-over-year as
reported, and 5% on an FX neutral basis.Subscription revenue grew 8% on an
organic FX neutral basis.Non-subscription revenue performance was similar to
Q2.Third quarter research contribution was 73%, compared to 74% in the prior
year period, as we have caught up on hiring and returned to the new expected
levels of travel.
>>> The calendar shifted significantly from 2022 to 2023, with the return to
in-person.Contribution margin in the quarter was 36%, consistent with typical
seasonality and reflecting investments for future growth.We held nine
destination conferences in the quarter, all in person.Third quarter consulting
revenues increased by 24% year-over-year to $133 mil
from the subscription business than the non-subscription part of the segment,
consistent with the third quarter.For conferences, we still expect Q4 to be the
largest quarter of the year.For consulting revenues, the labor business
continues to perform well.We have very tough contract optimization compares in
Q4 and pulled some revenue into Q3 relative to our prior expectations.
>>> We will continue both to manage expenses prudently to support future growth and
deliver strong margins.Our updated 2023 guidance is as follows: We expect
Research revenue of at least $4.875 billion, which is FX-neutral growth of
about 6% or 7% excluding the Q1 divestiture.The update to the Research revenue
guidance reflects better-than-planned NCVI performance in Q3.With continued
stability in the non-subscription part of the business, there is modest
incremental upside relative to the expectations we built into the guidance last
quarter.We expect Conferences revenue of at least $500 million, which is
FX-neutra
to lap with easier comparisons, there's an opportunity to win back those
sales.Do you think you need to invest behind that, or do you think you have an
opportunity with your existing sales force?And then also just your thoughts
around expense management as we head into 2024, but more broadly.
>>> Hi, thanks.Good morning.Going back to tech vendor trends, you mentioned that
research non-subscription revenues were similar in terms of performance to 2Q,
and tech vendor CV growth was in the low single digits.Can you elaborate a
little bit more on what you're seeing with tech vendors, and if your
updated 2023 guide assumes stabilization or improvement in performance?
>>> You know, as we've talked about, as that whole industry is realigning its cost
base and figuring things out, that has put a lot of pressure on our both
research contract value and non-subscription revenue business, where we are
exclusively serving the tech vendors.
>>> On the non-subscription part of the business, the bulk of what we report, you
know, for that revenue line, is business that we sell to tech vendors, and we're
essentially selling leads.
>>> Our business remains resilient despite a persistent, complicated external
environment and tough compares for the technology vendor market.Gartner
conferences deliver extraordinarily valuable insights to an engaged and
qualified audience.This will be the first full year of in-person conferences
since 2019.We're off to a great start.Attendance is strong, exhibitor bookings
are at record levels, and feedback continues to
be excellent.We had a great first half and the outlook for the year is
strong.Gartner Consulting is an extension of Gartner Research.Consulting helps
clients execute their most strategic initiatives through deeper, extended
project-based work.Consulting is an important complement to our IT research
business.Consulting revenue grew 6% in the second quarter.We updated our 2023
guidance, increasing EBITDA and free cash flow.We've revised our
non-subscription research revenue to reflect technology vendor dynamics, and our
outlook for conferences is higher.
>>> IT enterprise function leaders' wallet retention remained above historical GTS
levels during the second quarter.GTS new business was down 4% versus last
year.New...

Based on the provided transcripts and historical context, here is a detailed breakdown of Gartner’s non-subscription revenue business, its quarter-over-quarter evolution, and its ultimate fate.

1. What is the Business and its Value Proposition?

Gartner’s non-subscription revenue primarily consists of its Digital Markets division, which operates software review and discovery platforms—most notably Capterra, Software Advice, and GetApp.

Value Proposition: The business operates as a dual-sided marketplace.

• For small business buyers: It helps leaders and executives who are not IT experts evaluate, compare, and select the right software for their specific operational needs.
• For technology sellers: It serves as a lead-generation machine. Gartner essentially captures high-intent web traffic and connects prospective buyers with technology vendors, helping sellers find qualified customers.

2. When Did Gartner Start This Business?

Gartner built this non-subscription business primarily through strategic acquisitions to capture the SMB (small and medium-sized business) software review market. They acquired Software Advice in 2014, followed by the acquisitions of Capterra and GetApp in 2015.

3. How Much Revenue Does It Generate?

Historically, the non-subscription business was a solid growth driver that made up about 6% of Gartner’s consolidated revenue (as of 2023). During 2024, management guided that it would generate roughly $305 million. However, as headwinds intensified, the expected revenue contribution for 2025 dropped to approximately $210 million before the company decided to divest it entirely.

4. Quarter-over-Quarter Evolution of the Revenue Mix

The business faced severe, compounding headwinds over the last few years, turning from a growth engine into a drag on overall performance. Management and analysts tracked this deterioration sequentially:

• Q2 to Q3 2023: Management was forced to revise their non-subscription outlook downward, citing severe pressure as the tech industry began realigning its cost base. By Q3, management noted that performance was "similar to Q2," remaining structurally soft as vendors slashed marketing and lead-generation budgets.
• Q4 2023 to Q1 2024: Faced with declining web volumes, Gartner attempted a strategic pivot. They shifted away from pure traffic volume toward driving "higher quality traffic sources" to try and stabilize pricing. By Q1 2024, revenues were merely "in line with expectations" following this recalibrated, lower baseline.
• Q2 2024: The year-over-year decline in non-subscription revenue stubbornly persisted, with management noting the performance was "similar to Q1 2024."
• Q3 2024 / Late 2024: The challenges became so pronounced that Gartner structurally changed its segment reporting. To prevent the struggling Digital Markets segment from muddying the core research metrics, management moved most of the non-subscription revenue out of the "Insights" segment and reclassified it as "Other Revenue" on the P&L.

5. Analysts' Main Concerns

Analysts repeatedly zeroed in on the non-subscription segment during Q&A sessions. Their primary concerns included:

• The AI and SEO Threat: Analysts were highly concerned about shifting web traffic volumes. Because Digital Markets relies heavily on search engine optimization (SEO), the rise of Generative AI and Large Language Models (LLMs) fundamentally disrupted how buyers search for information online, threatening the platforms' primary traffic source.
• Tech Vendor Budget Cuts: Analysts noticed the small tech vendor client count was ticking down quarter over quarter. They questioned whether the business could ever re-accelerate if tech vendors refused to return to their previous levels of discretionary lead-generation spending.
• Steep Financial Declines: Analysts pointed out that management's guidance implied "a pretty substantial decline" in Q4 and beyond, pressing management on whether they needed to heavily invest to win back sales or if the business was structurally impaired.

6. Current State and Management's Outlook

Currently, Gartner is exiting the non-subscription business altogether.

Recognizing that the Digital Markets division no longer fit their vision for sustained double-digit growth—especially in a tough macro environment—Gartner entered into a definitive agreement in January 2026 to sell Capterra, Software Advice, and GetApp to the peer-review platform G2.

Management's Outlook: The non-subscription business has been completely stripped out of Gartner's 2026 financial guidance. Management views this divestiture as a massive positive, allowing them to refocus capital and resources entirely on their highly profitable, 100% recurring Business and Technology Insights (BTI) segment and core enterprise research model.