IT earnings analysis
What we found in IT's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Gartner delivered a mixed top line but materially stronger profitability in Q2: revenue declined 1% year over year to $1.676 billion following the Digital Markets sale, while diluted EPS increased 33% to $4.14 and operating margin expanded to 22.6%. Insights and Conferences grew 2% and 15%, respectively, offsetting a 9% Consulting decline. Operating cash flow rose to $789.3 million for the first six months, although $1.1 billion of share repurchases reduced cash and the company carries $3.0 billion of debt.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Sequential revenue rebound despite reported YoY decline
- Q2 revenue was $1.676 billion, down $10.5 million, or 1%, year over year due primarily to the February 2026 Digital Markets divestiture. Revenue increased about 11% from Q1 2026's $1.51 billion.
- Expense discipline drove margin expansion
- Operating income rose $51.4 million, or 16%, to $378.5 million. The operating margin expanded to 22.6% from 19.4% a year earlier and 20.5% in Q1 2026, as cost of services and product development fell to 29% of revenue from 32%.
- EPS accelerated year over year and sequentially
- Diluted EPS increased $1.03 year over year to $4.14, versus $3.11 in Q2 2025, and rose from $3.18 in Q1 2026. Net income increased 14% to $275.5 million.
- Conferences produced strongest segment growth
- Conferences revenue grew $32.8 million, or 15%, to $244.2 million, led by higher exhibitor and attendee revenue. Gross contribution margin expanded 2 points to 59%, even with 18 destination conferences versus 19 a year ago.
- Insights contract value and margins improved
- Insights revenue increased 2% to $1.290 billion and gross contribution margin increased 1 point to 77%. Contract value reached $5.283 billion, up 2% in foreign-currency-neutral terms, with GTS and GBS contract value up 1% and 3%, respectively.
- Operating cash flow strengthened and buybacks continued
- Six-month operating cash flow rose $92.3 million to $789.3 million, aided by higher net income and improved collection timing. The company repurchased $1.1 billion of stock in the first six months of 2026.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Consulting contraction continued
- Consulting revenue declined $13.7 million, or 9%, to $141.9 million, while gross contribution margin fell 2 points to 38%. Management cited weakness in Japan and EMEA commercial markets; labor-based consulting revenue declined 13%.
- Existing-client spending retention weakened
- Despite Insights contract value growth to $5.283 billion, GTS wallet retention fell to 97% from 99% and GBS wallet retention fell to 99% from 104%, reflecting lower spending by existing clients.
- Interest burden increased with $3.0B debt
- Net interest expense increased $10.5 million, or 89%, to $22.3 million, driven by lower interest income and interest on the 2031 and 2035 notes. Total debt principal was $3.0 billion at June 30, 2026.
- Buybacks reduced cash balance
- Cash and cash equivalents fell to $1.489 billion at June 30, 2026 from $1.723 billion at December 31, 2025, as financing cash outflow totaled $1.073 billion in the first six months, largely from buybacks.
- No material risk-factor updates; FX remains exposure
- Item 1A disclosed no material changes to the risk factors in the 2025 Form 10-K. The filing nonetheless identifies a $125.9 million potential cash-balance impact from a 10% move in foreign exchange rates.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $4.14
- Gross margin
- 70.95%
- Operating margin
- 22.59%
- Segment
- Insights revenue: $1.290 billion, up 2% year over year
- Segment
- Conferences revenue: $244.2 million, up 15% year over year
- Segment
- Consulting revenue: $141.9 million, down 9% year over year
What they said about what is next.
The 10-Q provides no quantitative revenue or EPS outlook. Management states it believes it has adequate liquidity for the next 12 months and the foreseeable future; any updated full-year guidance was deferred to the earnings release/call.
The filing reads better than the one before it.
What came before.
- 10-Q · May 5, 2026
- Gartner, Inc. reported total revenues of $1.5 billion for Q1 2026, a decline of 2% from the previous year primarily due to the sale of its Digital Markets business. Net income increased to $222.3 million, with diluted…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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