I'll research IT (Gartner, Inc.) to build a well-informed earnings preview. Let me gather recent filings, transcripts, and market data.Let me read the most recent earnings release and call transcript, plus get recent price and news data.Let me get the year-ago Q2 2025 numbers (the comparison quarter), recent stock price performance, and latest news.The stock has seen dramatic moves. Let me get recent news and check the prior guidance framework context.Let me read the most relevant preview articles for consensus estimates and recent developments.One article mentioned a "governance probe." Let me quickly check that context.I have everything I need. Here's the earnings preview.
This is arguably the most important print for IT in two years. The stock has been in a violent de-rating: it fell ~28% on the Q2 2025 report (Aug 5, 2025), then plunged again on the Q4 2025 report / initial 2026 guidance (Feb 3, 2026, from ~$202 to ~$160). At ~$152, IT is down roughly 55% from its ~$337 level a year ago and off ~70% from its late-2024 peak — a stunning fall for a company that historically traded at 30x+ earnings.
The core reason: the market has repriced Gartner from a durable low-teens compounder to a business facing decelerating contract value (CV) growth and an existential debate over whether generative AI erodes the value of its subscription research. At consensus FY26 EPS of ~$13.61, the stock trades at roughly 11x forward earnings — a valuation that says the market is pricing in structural impairment, not a cyclical air pocket.
Notably, shares bounced ~30% off the late-June low (~$127) into a Jul 29 high (~$166) before fading ~8% to ~$152 ahead of the print — so sentiment is fragile and expectations are low, but positioning has firmed up. This is a "prove the acceleration is real" quarter.
| Metric | Q2 2026 consensus | Q2 2025 actual | Notes |
|---|---|---|---|
| Total revenue | ~$1.7B (≈ -2% to -2.4% YoY) | $1,686M | Optics distorted by the Digital Markets divestiture (sold Feb 2026) |
| Adjusted EPS | ~$3.77 (+6.8% YoY) | $3.53 | IT has beaten EPS all 4 prior quarters (avg ~10.6% surprise) |
| Insights revenue | ~$1.3B (≈ -2.5% YoY) | $1,319M | Reflects soft CV base |
| Conferences revenue | ~$219M (+3.5%) | $211M | 56 in-person conferences planned for 2026 |
| Consulting revenue | ~$134.5M (-13.5%) | $156M | Contract optimization is lumpy; tough comp |
Company guidance already in place (set on the Q1 call, May 5): - Q2 EBITDA: ≥ $425M - FY26 revenue: ≥ $6.405B (+1% FX-neutral) - FY26 adjusted EBITDA: ≥ $1.545B (≥24.1% margin, raised from prior guide) - FY26 adjusted EPS: ≥ $13.25 (raised) - FY26 free cash flow: ≥ $1.16B; ~69M diluted shares
Watch the gap between consensus EPS (~$13.61) and guidance (≥$13.25) — the Street already assumes another guide-raise driven by cost control and buybacks. A raise alone may not satisfy; the debate is on the top line.
Everything hinges on CV, Gartner's leading indicator of future subscription revenue. Management's entire bull thesis rests on the claim that CV growth will accelerate through 2026 and beyond. The Q1 scorecard: - Total CV: $5.3B, +1% YoY FX-neutral (an acceleration off Q4 2025) - Ex-U.S. federal CV: +3.5% — the cleaner underlying number - GTS (tech) CV: $4.0B, +0.4%; ex-Fed GTS +3%+ - GBS (business functions) CV: $1.3B, +3.2%; ex-Fed +5%
What to watch: - Does ex-Fed CV growth actually step up from 3.5%? Q2 is seasonally a larger new-business quarter and a smaller renewal quarter than Q1, so it's the first real test of the acceleration narrative. Management explicitly declined to give a segment/quarter cadence and said "tell us in Q2." This is the show-me moment. - U.S. federal. IT held only ~$114M of federal CV at Q1 (most of it GTS) and it was a ~250 bps headwind to total CV growth. Q2 2026 is when the company laps the March/April 2025 DOGE-driven collapse, so the federal drag should begin to ease — potentially flattering the total CV number even if the ex-Fed core is only steady. - Wallet retention (net dollar retention) is the cleanest read on the AI-disruption debate. Q1 was GTS 97% (99% ex-Fed) and GBS 98%. Improvement here would support the "engagement drives retention" thesis; erosion would validate bears.
Gartner sits at the center of the AI debate on both sides: - Bear case (why the stock cratered): If executives can get "good enough" answers from LLMs, why pay ~$50k+ per seat for Gartner research? The multiple compression reflects genuine fear of subscription disintermediation. - Bull/management case: Gartner argues its value is proactive, human-augmented, and proprietary — analyst inquiry, conferences, peer networks — not a Q&A engine. It positions AskGartner (its own AI tool, upgraded every two weeks) as an engagement driver, not a substitute, and cites rising engagement (Q1 monthly-active-user engagement +170 bps YoY, digital +160 bps). Management also declined to distribute its data through third-party LLMs, arguing that would dilute the value proposition.
Watch for: updated engagement metrics, AskGartner usage/repeat-usage stats, and any evidence (positive or negative) in the retention numbers. Management framed AI as its most-requested topic and a net tailwind — the market wants proof in the CV and retention lines, not narrative.
On the Q1 call, management flagged that new business was strong in Jan–Feb 2026 but client decisions slowed in March amid geopolitical uncertainty, with GTS new business -4% and GBS -2%. Crucially, they said many delayed deals closed in April, with decisions being escalated to CFO/CEO level rather than lost. Q2 will show whether that recovery held. Look for: - Sequential new-business dollar growth (it should rise seasonally through the year). - Color on tech-vendor clients: software/services were growing high-single-digits; hardware and telecom lagging. - Any commentary on the H2 selling environment and whether the macro/tariff/geopolitical overhang is stabilizing.
With CV growth stalled, buybacks are doing the heavy lifting on EPS. In Q1 IT repurchased $535M (share count down ~4%, exiting Q1 at ~68M shares vs. ~78M a year earlier). The Board refreshed authorization to ~$1.2B in April. Free cash flow is strong (Q1 FCF +29%; rolling 4-quarter ~$1.3B), leverage is <2x, and management targets ≥12% adjusted-EPS CAGR over three years (off a 2025 base) — a target that increasingly depends on the buyback given ~1% revenue growth. Watch the pace of Q2 repurchases and any further authorization refresh.
Given the ~11x multiple and low expectations, the risk/reward is skewed to the setup rather than the reported quarter itself:
In short: forget the EPS beat (highly likely) and the divestiture-muddied revenue line. The verdict rests on contract value acceleration and retention — the two metrics that tell you whether Gartner's subscription engine is merely cyclically depressed or structurally challenged by AI. This print is the first clean data point to adjudicate that debate.
Preview based on Gartner's Q1 2026 release and earnings call (May 5, 2026), the Q2 2025 release, price data through Aug 3, 2026, and Street/consensus figures from published previews. Not investment advice.