Events Crash Q2 but Elsewhere Gartner Marches On

Tech industry consultancy Gartner has reported a 6% rise in second quarter revenue for its Research division - from $826.1m in Q2 2019 to $875.3m a year later. With currency effects removed, the rise was 8%. Events revenue was wiped out, but the firm says the division will bounce back.

According to CEO Gene Hall (pictured), the Research division, the firm's most profitable segment, did see 'modestly better trends' in June than in the first two months of the quarter. Second quarter Research contribution margin was 72%, benefiting in part from the temporary cost avoidance initiatives the firm put in place last quarter. Total contract value was $3.4 billion at June 30th, representing FX neutral growth of 7% versus the prior year. Gartner now forecasts Research revenue, including the FX update, of at least $3.48 billion for the full year - growth of about 3% versus 2019, and reflecting a continuation of late March and second quarter new business and retention trends through the rest of the year.

For the three months ended June 30th, revenue for the Conferences segment was almost completely gone as a result of Covid-19 and the cancellation of all in-person events - 'significantly impacted' is Gartner's phrase for a fall from $114.2m in Q2 2019, to just $0.3m. Looking to the future, Hall says the firm will market a combination of in-person and virtual conferences, and the expectation is that Conferences will continue to be an 'important contributor' to the overall business. For the Consulting division, an extension of Gartner Research, revenue fell 6% to $97.5m (5% on an FX neutral basis), compared with $103.6m in the prior year period. However, CFO Craig Safian said this business is now seeing demand in three broad areas - digital, cost optimization, and data and analytics.

For the group as a whole, Q2 revenue fell 9.1% to $973.1m (-7.6% on an FX neutral basis), from $1,070.9m in the same period a year ago. Net income was $55m, compared with $103.4m in the prior period; and adjusted EBITDA was $192m, up 4% from $185m in Q2 last year (up 6% FX neutral). Hall added: 'We had a strong second quarter despite the challenging macroeconomic environment. As we enter the second half of 2020, we've restored targeted spending to ensure we're well-positioned for long-term growth coming out of the downturn'.

Web site: www.gartner.com .