Gartner Q2 2026 Earnings: EPS Rises 33.1% as Adjusted Revenue Grows 2.8%

Gartner (NYSE: IT) reported Q2 2026 revenue of $1.676 billion, down 0.6% year over year, while GAAP diluted EPS rose 33.1% to $4.14 from $3.11. Excluding the divested Digital Markets operation, adjusted revenue increased 2.8%, and adjusted EBITDA excluding the divested operation grew 6.4%. Free cash flow rose 8.9%, while strong Conferences growth contrasted with lower Consulting revenue.

Core Earnings Data

The headline revenue decline largely reflects the divestiture of Digital Markets. The prior-year quarter included $56 million of revenue from that operation; excluding it, adjusted revenue increased from $1.631 billion to $1.676 billion. On an FX-neutral basis, adjusted revenue grew 1.8%.

Profit increased faster than revenue. GAAP net income rose 14.4%, while the decline in diluted shares outstanding amplified per-share growth and helped diluted EPS increase 33.1%.

Adjusted revenue, adjusted EPS, adjusted EBITDA, and free cash flow are non-GAAP measures. Adjusted revenue and adjusted EBITDA excluding the divested operation remove the contribution from Digital Markets to improve period-to-period comparability.

Business and Segment Performance

FX-neutral contract value reached $5.3 billion, increasing 1.7% year over year and 0.3% sequentially. Global Technology Sales contract value was $4.0 billion, up 1.1% year over year but approximately flat sequentially. Global Business Sales performed better, with contract value rising 3.3% year over year and 1.2% sequentially to $1.3 billion.

Segment performance was uneven. Conferences delivered the fastest revenue and gross contribution growth, while Consulting declined on both measures. Insights, Gartner’s largest segment, posted modest revenue growth and somewhat faster gross contribution growth.

Conferences’ gross contribution grew faster than its revenue, while Consulting’s gross contribution declined more quickly than revenue. The latter indicates that Consulting was not only a top-line drag but also faced greater pressure on segment contribution.

Profitability, Cash Flow, and Capital Allocation

GAAP operating margin improved to approximately 22.6% from 19.4%, an increase of about 3.2 percentage points. Adjusted EBITDA margin excluding the divested operation was approximately 27.8%, compared with 26.9% a year earlier.

Total reported costs and expenses fell by $62 million to $1.297 billion. Cost of services and product development declined to $487 million from $531.7 million, while selling, general and administrative expense decreased to $764.6 million from $777 million. These comparisons also reflect the divestiture and the absence of $22 million in prior-year workforce reduction and other non-recurring expenses.

Diluted weighted-average shares outstanding fell about 14% to 66.6 million from 77.4 million. That smaller share base explains why diluted EPS grew substantially faster than net income. Gartner repurchased 3.6 million shares for $547 million during the quarter, but the company did not characterize the purchases as an indication that its shares were undervalued.

Operating cash flow increased 3.8% to $398 million. Capital expenditures declined to $20 million from $36 million, helping free cash flow rise 8.9% to $378 million. Quarterly repurchase spending exceeded free cash flow by approximately $169 million, and the board added $500 million to the repurchase authorization in July 2026.

Investor Risks to Watch

• Modest contract value growth: Total FX-neutral contract value increased only 1.7% year over year, while the larger Global Technology Sales component was approximately flat sequentially. These figures are important indicators of the pace of future recurring revenue growth.
• Consulting contraction: Consulting revenue fell 8.8%, and gross contribution declined 12.6%. Continued weakness would remain a drag on consolidated growth and segment profitability.
• Currency sensitivity: Adjusted revenue grew 2.8% as reported but only 1.8% on an FX-neutral basis. Investors need to distinguish reported growth from the underlying constant-currency trend.
• Repurchases running ahead of quarterly free cash flow: The $547 million spent on buybacks exceeded Q2 free cash flow of $378 million. The pace of repurchases relative to ongoing cash generation is therefore an important capital-allocation measure to monitor.

Conclusion

Gartner’s Q2 2026 results showed modest growth in the continuing revenue base despite a reported revenue decline caused by the Digital Markets divestiture. Conferences, higher operating profitability, improved free cash flow, and a lower share count supported earnings growth, while slow Global Technology Sales contract value expansion and weaker Consulting results showed that demand remained uneven. Future results will depend on contract value trends, Consulting stabilization, FX-neutral growth, and the relationship between cash generation and repurchase activity.