On May 8th, Gartner, Inc. (NYSE: IT) reported results for first quarter 2008 and reiterated its financial outlook for full year 2008. In addition, the company announced a change in the leadership of its Events business. The teleconference replay is available via the Internet, as of this posting.

Contract value, a key leading indicator for Gartner's Research segment, increased 17% year-over-year to a record level of $778.4 million, reflecting the successful execution of the Company's strategy to accelerate the growth of its Research business. Total revenue for first quarter 2008 grew 10% year-over-year to $290.1 million, principally driven by strong, double-digit growth in the Company's Research segment. Excluding the impact of foreign exchange, research contract value and total revenue increased 13% and 5%, respectively.

For first quarter 2008, GAAP EPS from continuing operations increased 56% year-over-year to $0.14, net income increased 163% year-over-year to $21.5 million and Normalized EBITDA increased 26% year-over-year to $40.1 million. These results were driven by the Company's strong revenue growth and operating leverage, coupled with the postponement of certain expenses and investments to later in the year. GAAP EPS from continuing operations and Normalized EBITDA exclude the results of the Company's former Vision Events business, which was sold in February 2008 and is now reported as a discontinued operation, and the $7.3 million gain-on-sale resulting from the divestiture, which is included in net income. See "Non-GAAP Financial Measures" for a discussion of Normalized EBITDA.

Gene Hall, Gartner's chief executive officer, commented, "Our strong start to 2008 was driven by the continued successful execution of our strategy to penetrate the untapped market opportunity in IT research. The robust demand for our services reflects the critical role we play in ensuring the efficient operation of our clients' IT programs, which remains an important priority in any economic environment."

Business Segment Highlights

Research: Revenue for first quarter 2008 increased 19% year-over-year to $189.5 million and gross contribution margin improved 3 percentage points to 66%. At March 31, 2008, research contract value was a record $778.4 million, up 17% year-over-year. Client and wallet retention rates for first quarter 2008 were 82% and 100%.

Consulting: Revenue for first quarter 2008 increased 2% year-over-year to $78.1 million and gross contribution margin improved 3 percentage points to 40%. First quarter utilization increased 5 percentage points year-over-year to 72% and backlog increased 10% year-over-year to $116.8 million at March 31, 2008. Billable headcount was 470 as of March 31, 2008, versus 516 last year, reflecting the exiting of consulting operations in Asia Pacific during 2007.

Events: Revenue for first quarter 2008 was $20.6 million, as compared to $26.9 million in first quarter 2007, and gross contribution margin was 44%. As expected, year-over-year comparisons were impacted by the timing and mix of events. The Company held 12 events with 5,256 attendees, as compared to 12 events with 7,392 attendees in first quarter 2007. However, four large events that were held in first quarter 2007 were shifted into second quarter 2008 and were replaced by three newly launched events and one smaller event that was shifted from the second quarter into the first quarter. As expected, this resulted in approximately $8 million of revenue shifting from the first quarter into the second quarter.

Alwyn Dawkins to Lead Events

Separately, Gartner announced that Alister Christopher has submitted his resignation as senior vice president and leader of Gartner's global Events business for personal reasons. Alwyn Dawkins, presently Gartner's head of sales for its Asia Pacific region and formerly head of sales for the Events business, will succeed Christopher. The transition will occur on or about July 1, 2008.

Dawkins has a distinguished track record at Gartner and within the Events business. Prior to his current role leading the highest performing sales region in the Company, Dawkins was a member of Gartner's Events leadership team, guiding the sales team during a period of consistent double-digit growth.

Gene Hall, Gartner's chief executive officer commented: "Alister has been a valued member of the Gartner community for 15 years and has led our Events business since 2003. The travel demands of his job kept him away from his home in the UK for extended periods and led to his decision. We are sorry to see him go and wish him the very best in the future. I would like to congratulate Alwyn on his upcoming promotion and look forward to working with him on my leadership team."

Complete financial release, teleconference replay

Follow the link below for the complete financial results release, and information on the financial results teleconference replay available via the Internet. The replay of the webcast will be available for 90 days commencing May 8, 2008.

» Story on Analyst Firm Website

» Comments   Digg this    del.icio.us