Gartner, Inc. IT reported better-than-expected third-quarter 2023 results.
Adjusted earnings (excluding 30 cents from non-recurring items) per share of $2.56 beat the Zacks Consensus Estimate by 37.6% and increased 6.2% from the year-ago reported figure. Revenues of $1.4 billion beat the consensus estimate by 0.7% and improved 5.8% year over year on a reported basis and 4.9% on a foreign-currency-neutral basis.
Total contract value was $4.7 billion, up 8.1% year over year on a foreign-currency-neutral basis.
Quarterly Numbers in Detail
Revenues in the Research segment increased 6.2% year over year on a reported basis and 5.3% on a foreign-currency-neutral basis to $1.22 billion and beat our estimate by a slight margin. The gross contribution margin was 73.4%, which came to $894 million in the reported quarter.
Gartner, Inc. Price, Consensus and EPS Surprise
Gartner, Inc. price-consensus-eps-surprise-chart | Gartner, Inc. Quote
Conferences’ revenues declined 25.7% year over year on a reported basis and 26% on a foreign-currency-neutral basis to $57 million and missed our estimated $70 million. The gross contribution margin was 35.8% in the reported quarter.
Revenues in the Consulting segment grew 24.1% year over year on a reported basis and 23.2% on a foreign-currency-neutral basis to $133 million, surpassing our estimate by 15.5%. The gross contribution margin was 36.5% in the reported quarter.
Adjusted EBITDA of $333 million increased 0.6% year over year on a reported basis and 0.1% on a foreign-currency-neutral basis.
Operating cash flow totaled $331 million while free cash flow was $302 million in the reported quarter. Capital expenditures totaled $28 million. The company returned $209 million to shareholders through repurchasing 0.6 million shares.
Updated 2023 Outlook
Total revenues are expected to be $5.89 billion, up from the previous guidance of $5.85 billion. The Zacks Consensus Estimate for the same is pegged at $5.88 billion, which is lower than the expected figure. Adjusted earnings per share (EPS) are now anticipated to be $10.90, raised from the previous guidance of earnings of $10.00 per share. The consensus estimate of earnings of $10.12 per share lags the guidance.
Adjusted EBITDA is projected to be $1.44 billion, raised from $1.36 billion expected earlier. Free cash flow is anticipated to be $1.025 billion, increased from the prior expectation of $975 million.
Currently, Gartner carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings Snapshot of Some Business Services Stocks
S&P Global Inc.SPGI reported impressive third-quarter results wherein earnings and revenues beat the Zacks Consensus Estimate.
SPGI’s adjusted EPS (excluding 88 cents from non-recurring items) of $3.21 rose 9.6% year over year and beat consensus estimate by 5.3%. Revenues of $3.08 billion surpassed the consensus estimate by 2% and improved 8% year over year, backed by strong performance in all divisions.
Verisk Analytics Inc. VRSK reported impressive third-quarter 2023 results wherein earnings and revenues beat the respective estimates.
VRSK’s adjusted earnings (excluding 23 cents from non-recurring items) were $1.52 per share, beating the Zacks Consensus Estimate and increasing 4.1% from the year-ago reported figure. Such a beat was supported by strong growth in underwriting data solutions, life insurance and extreme events solutions.
Fiserv, Inc.FI reported impressive third-quarter 2023 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate.
FI’s adjusted EPS (excluding 40 cents from non-recurring items) of $1.96 exceeded the consensus mark by 1% and increased 20% year over year. Adjusted revenues of $4.62 billion surpassed the consensus estimate by 0.53% and increased 8.2% year over year.
Organic revenue growth was 12% in the quarter, driven by 20% and 6% growth in the Acceptance and Payments segments, respectively.
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