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Gartner at William Blair 2019 · The Company’s SEC filings can be found on Gartner’s website at...

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© 2019 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. This presentation, including all supporting materials, is proprietary to Gartner, Inc. and/or its affiliates and is for the sole internal use of the intended recipients. Because this presentation may contain information that is confidential, proprietary or otherwise legally protected, it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates. Craig Safian, CFO Gartner at William Blair 2019
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Page 1: Gartner at William Blair 2019 · The Company’s SEC filings can be found on Gartner’s website at investor.gartner.com and on the SEC’s website at . Forward looking statements

© 2019 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. This presentation, including all supporting materials,

is proprietary to Gartner, Inc. and/or its affiliates and is for the sole internal use of the intended recipients. Because this presentation may contain information that is confidential,

proprietary or otherwise legally protected, it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.

Craig Safian, CFO

Gartner at William Blair 2019

Page 2: Gartner at William Blair 2019 · The Company’s SEC filings can be found on Gartner’s website at investor.gartner.com and on the SEC’s website at . Forward looking statements

2 © 2019 Gartner, Inc. and/or its affiliates. All rights reserved.

Forward Looking Statement and Explanatory Note

Statements contained in this presentation regarding the growth and prospects of the business, the Company’s projected 2019 financial results, long-term objectives and all other statements in this

presentation other than recitation of historical facts are forward looking statements (as defined in the Private Securities Litigation Reform Act of 1995). Such forward looking statements involve known

and unknown risks, uncertainties and other factors; consequently, actual results may differ materially from those expressed or implied thereby.

Factors that could cause actual results to differ materially include, but are not limited to, the ability to achieve and effectively manage growth, including the ability to integrate our acquisitions, and

consummate and integrate future acquisitions; the ability to pay Gartner’s debt obligations, the ability to maintain and expand Gartner’s products and services; the ability to expand or retain Gartner’s

customer base; the ability to grow or sustain revenue from individual customers; the ability to attract and retain a professional staff of research analysts and consultants as well as experienced sales

personnel upon whom Gartner is dependent; the ability to achieve continued customer renewals and achieve new contract value, backlog and deferred revenue growth in light of competitive

pressures; the ability to carry out Gartner’s strategic initiatives and manage associated costs; the ability to successfully compete with existing competitors and potential new competitors; the ability to

enforce and protect our intellectual property rights; additional risks associated with international operations including foreign currency fluctuations; the impact of restructuring and other charges on

Gartner’s businesses and operations; cybersecurity incidents; general economic conditions; risks associated with the credit worthiness, budget cuts and shutdown of governments and agencies; the

impact of the U.S. Tax Cut and Jobs Act of 2017; changes to laws and regulations; and other risks listed from time to time in Gartner’s reports filed with the Securities and Exchange Commission,

including Gartner’s most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

Non-GAAP financial measures such as Adj. Revenue, Adj. Contribution, Adj. Contribution Margin, Adj. EBITDA, Adj. Net Income, Adj. EPS and Free Cash Flow, as included in this presentation, are

supplemental measures that are not calculated in accordance with U.S. GAAP. Definitions of these measures and reconciliations to the most-directly comparable GAAP measures can be found on

Gartner’s website at investor.gartner.com.

In this presentation, we include “combined” numbers that, for periods prior to our acquisition of CEB (unless expressly noted otherwise), reflect numerical addition of the results of Gartner and CEB

for each line item and do not include all the adjustments required with respect to the presentation of pro forma financial information under GAAP and the rules and regulations of the SEC.

Accordingly, these “combined” numbers are non-GAAP, but are provided because Gartner believes they are useful in comparing performance of Gartner following the CEB acquisition with

performance of Gartner and CEB independently prior to Gartner’s acquisition of CEB. These combined numbers should be read together with the historical financial statements of Gartner and CEB

included in their respective quarterly reports on Form 10-Q and annual reports on Form 10-K, and the pro forma financial statements included in Exhibit 99.1 to Gartner’s Current Report on Form 8-K

filed with the SEC on April 6, 2017 and footnote 2 to the consolidated financial statements in Gartner’s Annual Report on Form 10-K for the year ended December 31, 2018.

The Company’s SEC filings can be found on Gartner’s website at investor.gartner.com and on the SEC’s website at www.sec.gov. Forward looking statements included herein speak only as of May

7, 2019 and the Company disclaims any obligation to revise or update such statements to reflect events or circumstances after this date or to reflect the occurrence of unanticipated events or

circumstances, except as required by applicable law or regulation.

Page 3: Gartner at William Blair 2019 · The Company’s SEC filings can be found on Gartner’s website at investor.gartner.com and on the SEC’s website at . Forward looking statements

3 © 2019 Gartner, Inc. and/or its affiliates. All rights reserved.

Provides functional leaders

indispensable insight and

advice.

Provides the foundation for

sustained, double-digit

contract value growth.

Drives sustained, double-

digit growth in revenue,

earnings and free cash flow.

Gartner: Long-term, sustained, double-digit growth

Value Proposition Gartner Formula Business Model

IT

Service

Legal

Sales

Marketing

Finance

Human Resources

Supply Chain

Page 4: Gartner at William Blair 2019 · The Company’s SEC filings can be found on Gartner’s website at investor.gartner.com and on the SEC’s website at . Forward looking statements

4 © 2019 Gartner, Inc. and/or its affiliates. All rights reserved.

A Great Place to Work – Awards & Recognition

Gartner at a glance

15,600 Client

Enterprises

100

Countries

15,000

Associates

$4B

Revenues

Gartner equips senior leaders across the enterprise with the indispensable insight, advice and tools they

need to achieve their mission-critical priorities.

Fortune Forbes LinkedIn Glassdoor

Human Rights Campaign Corporate

Equality Index

World’s Most Admired Companies

2016, 2017, 2018, 2019

America's Best Employers 2018;

Best Management Consulting Firms

2017, 2018; America's Best Midsize

Employers 2016, 2017; and Best

Employers for Diversity 2019

Top 50 Companies For 2017 Gartner‘s U.K. office has been

recognized among Glassdoor’s

annual Employee Choice Award

winners as one of the Best Places to

Work U.K. 2018, 2019

Best Places to Work for LGBTQ

Equality 2018, 2019

Page 5: Gartner at William Blair 2019 · The Company’s SEC filings can be found on Gartner’s website at investor.gartner.com and on the SEC’s website at . Forward looking statements

5 © 2019 Gartner, Inc. and/or its affiliates. All rights reserved.

Long-term track record of delivering value

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Current CEO Gene

Hall joins Gartner

Acquisition of AMR

Research to create

new market

opportunity in Supply

Chain

Gartner founded to

provide technology

research

Organically created new market

opportunity in Marketing

Series of tuck-in acquisitions

focused on serving small

businesses

Acquisition of CEB creating

new market opportunities

across the entire enterprise

Gartner goes public

NYSE:IT

1993 20041979 2009 2012 2014 2015 2017

Source: CapitalIQ

Stock Price

$170

$10

Page 6: Gartner at William Blair 2019 · The Company’s SEC filings can be found on Gartner’s website at investor.gartner.com and on the SEC’s website at . Forward looking statements

6 © 2019 Gartner, Inc. and/or its affiliates. All rights reserved.

Vast market opportunity

Total Market

Opportunity

Technology

55

23

2514

24

38

19 198

Supply Chain Marketing Human

Resources

Finance Sales Legal

& Other

Gartner CV

$3B

($ billions)

Source: Internal Gartner estimates.

Detailed bottom-up market opportunity estimate shows

Gartner has a very long runway for growth.

Page 7: Gartner at William Blair 2019 · The Company’s SEC filings can be found on Gartner’s website at investor.gartner.com and on the SEC’s website at . Forward looking statements

7 © 2019 Gartner, Inc. and/or its affiliates. All rights reserved.

Gartner is a growth company

715 780 898 1,021 1,155 1,300 1,4871,691

1,923

2,7703,086

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

160 147192 214 237

280312 316

347

265

468

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Free Cash Flow $ millions

Contract Value $ millions @ ’19 rates 16% CAGR

11% CAGR

Note: 2016 and prior is Gartner stand-alone. 2017 and 2018 are on a combined basis.

Contract Value includes both GTS and GBS values starting in 2017.

Page 8: Gartner at William Blair 2019 · The Company’s SEC filings can be found on Gartner’s website at investor.gartner.com and on the SEC’s website at . Forward looking statements

8 © 2019 Gartner, Inc. and/or its affiliates. All rights reserved.

Our value maps to five fundamental approaches for successful leaders

Benchmark to determine

what’s working — and

prioritize areas to improve

We help clients stay on top of

their game and empower their

team to do the same

We know what “great” looks

like so clients can focus on what

matters and what works

Our clients learn from a

community of true peers to

benefit from their insights

Choose the right technologies

and get the best pricing

and terms

Page 9: Gartner at William Blair 2019 · The Company’s SEC filings can be found on Gartner’s website at investor.gartner.com and on the SEC’s website at . Forward looking statements

9 © 2019 Gartner, Inc. and/or its affiliates. All rights reserved.

Research Segment

Overview

• Gartner Research provides

indispensable insights,

advice and tools to leaders

across the enterprise.

• Subscription model provides

ongoing access to research

with on-demand response

through published research

content, data and

benchmarks.

Adj. Contribution Margin

Adj. Revenue $ millions

Historical Revenue

Historical Contribution Margin

Note: 1Q17 combines heritage Gartner and heritage CEB financial metrics.

% of Revenue

651670

697

727

766 767 771

796825

1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19

69.2%

68.5%

69.1%68.9%

69.8%

69.2%69.1%

68.4%

69.7%

1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19

Page 10: Gartner at William Blair 2019 · The Company’s SEC filings can be found on Gartner’s website at investor.gartner.com and on the SEC’s website at . Forward looking statements

10 © 2019 Gartner, Inc. and/or its affiliates. All rights reserved.

Conferences Segment

Overview

• Our mission is to produce

must-attend conferences for

leaders across the enterprise.

• Conferences are aligned to

the same roles and functions

of the clients we serve in

Research.

• Combines the outstanding

value of our research with

unparalleled peer networking

and the immersive

experience of live events.

37

95

45

169

46

111

57

196

52

1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19

31.5%

56.4%

35.8%

51.2%

35.2%

57.0%

43.8%

52.3%

36.3%

1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19

Adj. Contribution Margin

Adj. Revenue $ millions

Historical Revenue

Historical Contribution Margin

% of Revenue

Note: 1Q17 combines heritage Gartner and heritage CEB financial metrics.

Page 11: Gartner at William Blair 2019 · The Company’s SEC filings can be found on Gartner’s website at investor.gartner.com and on the SEC’s website at . Forward looking statements

11 © 2019 Gartner, Inc. and/or its affiliates. All rights reserved.

Consulting Segment

Overview

• Provides clients extended

project-based work to help

them execute their most

strategic initiatives.

• Support Chief Information

Officers and their teams.

• Differentiated with our

independent and objective

insight and advice.

• Engagements are powered

by Research.

Contribution Margin

Revenue $ millions

Historical Revenue

Historical Contribution Margin

79

92

72

8583

96

79

9693

1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19

30.5%

34.3%

22.4%

25.9%

29.1%

34.9%

23.4%

27.5%

30.8%

1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19

% of Revenue

Page 12: Gartner at William Blair 2019 · The Company’s SEC filings can be found on Gartner’s website at investor.gartner.com and on the SEC’s website at . Forward looking statements

12 © 2019 Gartner, Inc. and/or its affiliates. All rights reserved.

Finance

$600M

in Contract Value

~20%

of Total CV

5,400

Enterprises

800

Quota-Bearing

Salespeople

~80%

of Total CV

13,000

Enterprises

$2.5B

in Contract Value

3,100

Quota-Bearing

Salespeople

IT Legal

Sales

Human Resources

Supply Chain

Marketing

Service

Distinct sales forces sell to leaders across the enterprise

Global Business Sales (GBS)Global Technology Sales (GTS)

As of December 31, 2018. Contract Value shown at 2019 FX rates. Note: Enterprises that are clients of both GTS and GBS appear in both counts.

Page 13: Gartner at William Blair 2019 · The Company’s SEC filings can be found on Gartner’s website at investor.gartner.com and on the SEC’s website at . Forward looking statements

13 © 2019 Gartner, Inc. and/or its affiliates. All rights reserved.

Acquisition thesis and integration timeline

CEB acquisition expanded our market

opportunity giving us the ability to address the

mission critical priorities for all major

enterprise functions including Human

Resources, Finance, Sales and Legal.

Leveraging the same playbook Gartner

employed starting in 2004 around

engagement, retention, sales productivity, and

product development, we expect double-digit

growth in 2019 for GBS.

We laid the foundation with a number of

changes to set us up for double-digit growth:• Reconfigured contract terms and conditions

• Eliminated discounting

• Introduced new suite of products,

collectively called GxL

• Hired salesforce and trained them

on new products in 1H18

GxL products deliver greater value to

clients because they are tailored to a client’s

individual needs leading to higher prices per

user and stronger retention.

April

2017

2017 –

2018

2019 2020 &

beyond

Page 14: Gartner at William Blair 2019 · The Company’s SEC filings can be found on Gartner’s website at investor.gartner.com and on the SEC’s website at . Forward looking statements

14 © 2019 Gartner, Inc. and/or its affiliates. All rights reserved.

• Generation of free cash flow allows us to reinvest in

the business, return capital to shareholders and

execute strategic value-enhancing M&A.

• Over the last decade, we deployed $1.9B on buybacks

at a weighted average price of just over $61 per share.

1.73.5 3.4 3.3 3.0 2.5 2.2 2.3 2.3

1.20.6 0.6 0.5 0.2 0.1 0.2 0.2 0.1

3.6x 5.0x 4.9x 4.8x 4.2x 3.4x 3.0x 3.2x 3.3x

1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19

Gross Debt$ billions

Cash$ billions

Gross Debt/

LTM Adj EBITDA

($ in billions)

Note: LTM Adj. EBITDA is the sum of the last four quarters of combined Adj. EBITDA and

includes divested operations in periods when owned.

4

100

212

111182

432509

59 41

261

45

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Share Repurchases $ millions

$850M+ repurchase authorization remaining

as of 3/31/2019 of $1.2B plan

Capital structure and allocation

($ billions)

Debt 3/31/2019 Rate (1)

Revolver 0.2 LIBOR + 150

TLA 1.3 LIBOR + 150

Bonds 0.8 5.13%

Total Debt 2.3 3.99%

Revolver Unused Capacity 1.0 25 bps

Interest Rate Hedges 1.4 1.84%

% Debt With Fixed Rates 95%

(1) Floating and total rates reflect LIBOR and spread as of date shown

Page 15: Gartner at William Blair 2019 · The Company’s SEC filings can be found on Gartner’s website at investor.gartner.com and on the SEC’s website at . Forward looking statements

15 © 2019 Gartner, Inc. and/or its affiliates. All rights reserved.

Reinvesting for organic growth

EBITDA grows in line with RevenueGross Margin

expansion

G&A operating

leverage

Reinvested into

the salesforce

• We designed the Gartner

Formula to drive sustained,

long-term, double-digit growth.

We sustain growth and seek

to drive acceleration by

reinvesting gross margin

expansion and G&A operating

leverage back into the

salesforce.

• In the medium term, we

expect EBITDA to grow in line

with revenue.

Page 16: Gartner at William Blair 2019 · The Company’s SEC filings can be found on Gartner’s website at investor.gartner.com and on the SEC’s website at . Forward looking statements

16 © 2019 Gartner, Inc. and/or its affiliates. All rights reserved.

Medium-Term Objectives

Growth Rate

Research GTS

GBS

12 – 16%

12 – 16%

Conferences 5 – 10%

Consulting 3 – 8%

Revenue 10 – 14%

Adjusted EBITDA 10 – 14%

Free Cash Flow 10 – 14%

Note: Growth rates are organic, FX neutral.

Page 17: Gartner at William Blair 2019 · The Company’s SEC filings can be found on Gartner’s website at investor.gartner.com and on the SEC’s website at . Forward looking statements

17 © 2019 Gartner, Inc. and/or its affiliates. All rights reserved.


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