Gartner Q2 2026: revenue fell 0.6% to $1.68B after the Digital Markets sale (+2.8% excluding it), but diluted EPS rose 33% to $4.14 on cost cuts and a 14% smaller share count; contract value grew 1.7% while wallet retention fell.
Revenue
$1.7B
-0.6% YoY
Net income
$276M
+14.4% YoY
Diluted EPS
$4.14
+33.1% YoY
Operating margin
22.6%
Overview: cost cuts and a smaller share count carried EPS; demand is growing slowly
Gartner sells research subscriptions, conferences and consulting to executives. In the second quarter of 2026 (April–June), reported revenue slipped 0.6% to $1,675.9 million. That drop comes from a sale: Gartner sold its Digital Markets business in February 2026, and that business contributed $55.9 million of revenue a year earlier. Leaving it out, the earnings release (8-K Exhibit 99.1) puts "adjusted revenues" up 2.8%, or 1.8% at constant currency (that is, with exchange-rate swings removed).
Profits grew much faster than revenue. Operating income rose 16% to $378.5 million. Net income rose 14.4% to $275.5 million. Diluted EPS (profit per share) rose 33.1% to $4.14. Most of that EPS gain came from two things, not from customer demand:
Lower costs. Headcount fell 8% to 19,285. Cost of services fell $44.8 million, split evenly between the divested business ($22.8M) and lower personnel costs ($22.8M). SG&A (selling, general and administrative costs) fell $12.3 million, which the 10-Q attributes "primarily" to "reduced severance expenses".
Fewer shares. The diluted share count fell 14%, from 77.4 million to 66.6 million, after heavy buybacks.
Key metrics — Q2 2026 (quarter ended June 30, 2026)
Metric
Q2 2026
Q2 2025
YoY Change
Revenue
$1,675.9M
$1,686.5M
-0.6%
Adjusted revenue (excl. divested Digital Markets)¹
$1,676M
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¹ From the earnings release (8-K Exhibit 99.1, Aug 4, 2026); non-GAAP measures. All other figures are from the 10-Q.
First half (six months to June 30): revenue was $3,187.0M (-1.0%). Operating income was $694.6M (+15%), for an operating margin of 21.8% versus 18.8%. Net income was $497.8M (+10.2%) and diluted EPS $7.29 versus $5.82 (+25.3%).
Takeaway: Most of the 33% EPS gain came from cost cuts and buybacks. The subscription business itself grew about 2%, and existing clients are spending less: wallet retention fell in both sales channels. Profits look strong, but the demand underneath them is barely growing.
The subscription engine: contract value and retention
The key figure for Gartner is contract value (CV). CV is the annualized value of all subscription contracts in force at a point in time, so it shows the recurring business that future revenue will come from. CV reached $5.28 billion, up 2% at constant currency. The earnings release puts it at +1.7% year over year and +0.3% from the previous quarter, and the CEO said CV growth "accelerated again".
Global Technology Sales (GTS), sold to IT leaders and technology vendors: CV was $3,999.3M, +1%. The 10-Q says the gain was "primarily due to business from new clients". The earnings release describes it as roughly flat from the previous quarter.
Global Business Sales (GBS), sold to non-IT functional leaders such as finance, HR and supply chain: CV was $1,283.3M, +3%, also "primarily driven by business from new clients".
Wallet retention is the share of last year's contract value that the same clients still pay for today, so it captures both clients who stay and whether they spend more or less. It fell to 97% in GTS (from 99%) and 99% in GBS (from 104%). The 10-Q gives the reason plainly: "lower levels of spending by existing clients." Client retention, which counts clients rather than dollars, held roughly steady (GTS 85% vs 84%; GBS 86% vs 87%). So Gartner is keeping about as many clients as before, but those clients are buying fewer seats or cheaper products. That makes growth depend on winning new clients, while the quota-bearing sales force shrank 3% (GTS 3,581; GBS 1,293).
US federal government
The 10-Q says banking and energy led CV growth. That was "partially offset by a mid single-digit decrease in public sector, primarily related to the U.S. federal government." Public-sector CV fell by mid single digits in GTS and low single digits in GBS. The 10-Q gives only a qualitative breakdown by sector. The filing gives no figure for CV growth excluding the federal business.
AI: opportunity or threat?
The 10-Q does not quantify any effect from AI. It lists keeping pace with AI developments as a forward-looking risk and reports no material change to its risk factors. The bear case is that clients may replace paid research with AI tools. Nothing in this filing proves or disproves it, but the falling wallet retention is the metric to watch for it.
Segment performance
Segment
Q2 2026 revenue
YoY (reported)
YoY (FX-neutral)
Gross contribution margin
Insights (research subscriptions)
$1,289.9M
+2%
+1%
77% (vs 76%)
Conferences
$244.2M
+15%
+14%
59% (vs 57%)
Consulting
$141.9M
-9%
-9%
38% (vs 40%)
Other (Digital Markets, sold)
$0
-100%
—
—
Gross contribution margin is Gartner's segment profit measure: revenue minus the segment's direct costs, before corporate overhead, depreciation and amortization.
Insights (formerly "Research") grew 2%, or 1% at constant currency, so a weaker dollar supplied about half the reported growth. For the half-year it was about flat at constant currency. Its margin improved to 77% as headcount fell.
Conferences was the fastest grower, +15%, "primarily due to higher exhibitor revenue, as well as an increase in attendee revenue". That happened with fewer events (18 vs 19) and slightly fewer attendees (28,057 vs 28,295), so the gain came from higher prices and more exhibitor spending per event, not more people attending.
Consulting fell 9%. Labor-based consulting fell 13%, while contract optimization (helping clients renegotiate IT vendor contracts) rose 1%. The weakness was in Japan and EMEA (Europe, Middle East and Africa). Billable headcount fell 11% to 842. Backlog (signed work not yet delivered) rose 9% to $213.8M, which may support revenue in coming quarters.
Below the operating line
Interest expense, net almost doubled to $22.3M from $11.8M. Gartner earned less interest because it held less cash, and it paid interest on notes issued in November 2025.
The effective tax rate fell to 22.3% from 24.2%, which the 10-Q attributes to a more favorable geographic mix of earnings.
GAAP vs adjusted EPS: the gap narrowed to $0.23 ($4.14 vs $4.37) from $0.42 a year ago. That is because workforce-reduction and other one-off charges dropped from $23M to $1M. Adjusted EPS also excludes $20M of amortization of acquired intangibles. Adjusted EPS grew 23.8%, slower than GAAP EPS, because last year's GAAP figure was pulled down by severance.
Buybacks and the balance sheet
Gartner bought back 3.63 million shares for $547.1 million in the quarter, at an average price of $148.93. For the half-year it bought 6.94 million shares for $1.08 billion. For comparison, it paid an average of $417.99 per share in Q2 2025. That gap reflects how far the share price has fallen, and it is why the same cash now retires far more shares. The board added $500 million of buyback authorization on July 30, 2026. About $640 million remained under the prior authorization at the end of July.
These buybacks are larger than the cash the business generates. First-half operating cash flow was $789.3M, while $1.1B went to buybacks. As a result, cash fell to $1.49B from $1.72B at year-end, and stockholders' equity turned negative (-$167.3M). Accumulated buybacks now exceed the company's book value, although principal debt is unchanged at about $3.0 billion. Quarterly free cash flow (operating cash flow minus capital spending) was $378M, +8.9%, according to the earnings release.
Outlook
The earnings release (8-K Exhibit 99.1) says Gartner raised its full-year 2026 targets for adjusted EBITDA, adjusted EPS and free cash flow "even with the stronger dollar". This review uses only the SEC filings, so the guidance ranges themselves are not quoted here. This is a low-growth, high-margin, buyback-driven year.
Our read: Gartner's earnings are being carried by cost discipline and a much smaller share count, while core demand grows slowly. The recovery in CV growth is real but small. Falling wallet retention shows existing clients spending less, and new-client wins are covering for it. Two things would signal a real turnaround: wallet retention stabilizing back near 100%, and GTS CV growth rising above low single digits. Until then, EPS growth will depend heavily on buybacks, and the negative equity balance leaves less room to keep them at this pace without more borrowing.