Gartner's Stock Plummets Despite Q2 Earnings Beat and AI Tool Launch

Gartner Shares Plunge Over 27% Despite Beating Q2 Estimates, Raising Buyback Authorization - Gartner (NYSE:IT)

Gartner Inc. IT shares are trading lower Tuesday despite the company reporting better-than-expected second-quarter 2025 results. Check IT share price action here. What To Know: The sharp decline comes as investors react to slowing contract value growth and broader concerns about future demand, overshadowing the company's strong headline numbers and expanded share repurchase plan. For the quarter, Gartner posted revenue of $1.7 billion, up 5.7% year-over-year, or 4.6% on a foreign exchange-neutral basis. Net income came in at $241 million, and adjusted EBITDA rose 6.6% to $443 million. Diluted earnings per share were $3.11, while adjusted EPS came in at $3.53, up nearly 10% from the prior year. Free cash flow reached $347 million, and the company repurchased 700,000 shares for $274 million during the quarter. In July, Gartner's board increased its repurchase authorization by $700 million. The company also announced the rollout of its new AI tool, AskGartner, which aims to improve the client experience by delivering faster access to its research and insights. CEO Gene Hall said the company is seeing strong momentum in its core metrics and expects continued value creation as the AI platform expands. Trending Investment OpportunitiesAdvertisementArrivedBuy shares of homes and vacation rentals for as little as $100. Get StartedWiserAdvisorGet matched with a trusted, local financial advisor for free.Get StartedPoint.comTap into your home's equity to consolidate debt or fund a renovation.Get StartedRobinhoodMove your 401k to Robinhood and get a 3% match on deposits.Get Started Still, investors appear to be focusing on the slowing pace of contract value growth, which increased just 4.9% year-over-year on a constant currency basis, a deceleration from previous quarters. Despite beating expectations across major financial metrics, the modest contract growth may be viewed as an early signal of weakening enterprise spending or demand for Gartner's services. The market's reaction suggests that strong earnings alone aren't enough to offset concerns about future topline momentum. While the company is returning significant capital to shareholders and integrating new AI features, the steep selloff reflects heightened sensitivity to forward-looking indicators in the current market environment. IT Price Action: Gartner shares were down 27.55% at $243.93 at publication on Tuesday, according to Benzinga Pro. Read Next: Stocks Drop As Trump Tariffs Fuel Inflation, Palantir Hits $400 Billion Value: What's Moving Market Tuesday? Image Via Shutterstock. ITGartner Inc$243.69-27.6%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum11.79Growth93.82Quality90.30Value23.48Price TrendShortMediumLongOverview This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs

Why Gartner Stock Cratered 27.6% Today

Shares of Gartner (IT -27.47%) fell on Tuesday, finishing the day down 27.6%. The drop came as the S&P 500 and Nasdaq Composite lost 0.5% and 0.7%, respectively. Gartner, an IT and tech-focused business insights company, reported its second-quarter earnings. Though it beat expectations on many of the more high-profile figures, investors were underwhelmed by the slowing growth in its contracts. Gartner beats on sales and EPS The company's top- and bottom-line numbers were solid, posting earnings per share (EPS) of $3.11 on $1.7 billion in sales, and it repurchased $274 million worth of company stock. However, investors were disappointed in the pace of its contract growth and what it means for the future. The company's total contract value rose just 4.9% year over year, showing a slowdown in its growth trajectory. In the age of artificial intelligence (AI), investors expect robust growth consistently, and deceleration is punished. Gartner rolls out an AI tool Hoping to reverse the trend, the company announced its new "AskGartner" tool, an AI-powered research aid designed to empower clients and reduce friction. It could be too little too late. It is a tough time for the company as it competes with AI-native companies and internal tools that can be built using AI provided by OpenAI or Anthropic. While the company's stock trades at one of its lowest multiples in decades, it's for good reason. Trends in AI and the broader market are severely eating Gartner's very model.

Why Gartner Stock Plummeted 30.3% This Week | The Motley Fool

Gartner, an IT- and tech-focused business insights company, reported its Q2 earnings earlier this week. Though its current quarter performance met Wall Street's expectations, investors are concerned about future growth. The company posted earnings per share (EPS) of $3.11 on $1.7 billion in sales, as well as repurchasing $274 million worth of company stock. However, investors are concerned by what they see in the pace of the company's contract growth. The company's total contract value rose just 4.9% year over year, a slowdown in its growth trajectory for the critical measure of the company's health. Investors are rightfully concerned about what it means for Gartner's future. The company announced its new "AskGartner" tool, an AI-powered research aid designed to empower clients and reduce friction in an attempt to capitalize on the demand for AI. It remains to be seen how effective this tool is, but it could end up being too little too late as the business competes with AI-first intelligence companies. At the same time, companies also have powerful tools they can build internally using OpenAI or Anthropic's backends. While the company's stock trades at one of its lowest multiples in decades, it's for good reason. Trends in AI and the broader market are severely eating into Gartner's business model.

Gartner (IT) Q2 EPS Beats by 7% | The Motley Fool

Gartner (IT -28.42%), a global provider of research and advisory services for businesses, reported its second quarter 2025 earnings on August 5, 2025. The standout headline was a clear beat on both GAAP revenue and non-GAAP EPS: non-GAAP earnings per share (EPS) came in at $3.53, ahead of the $3.30 analyst consensus, while GAAP revenue was $1,686 million against an expectation of $1,674.16 million. Overall, the quarter showed positive operating momentum, but also indicated areas of softer demand, especially in the U.S. federal segment. Source: Analyst estimates for the quarter provided by FactSet. Gartner operates as a research and advisory firm, offering in-depth insights, data, and advice to help organizations make informed decisions. Its clients include nearly 14,000 enterprises across 90 countries, from corporations to government agencies. The company's offerings span three key segments: research (now called Business and Technology Insights), conferences, and consulting services that support strategic business priorities. The company's recent focus has been on expanding the breadth of its proprietary research and leveraging technology to enhance the value of client engagements. Gartner's critical success factors include continually growing its research content, strengthening its brand reputation, maintaining a diversified service model, and protecting its intellectual property. The launch of AskGartner, its new artificial intelligence (AI) solution, reflects this innovation-centric approach. The quarter showed continued financial progress across segments, though growth rates varied. GAAP revenue was up year over year, with notable outperformance in Conferences and Consulting, which helped offset a more modest increase in the core Insights business. The new AI-powered AskGartner tool was rolled out, aimed at giving clients quicker access to the company's research content. This move signals Gartner's drive to embed technology more deeply in its offerings. The Insights segment, recently renamed "Business and Technology Insights," generated $1.32 billion in GAAP revenue, which represented 4.2% year-over-year growth. Management attributed slower growth here largely to a subdued U.S. federal government market. Contribution margin in this division also expanded. Consulting revenue also improved, up 8.8% to $156 million, with margin reaching 39.6%. Contract value, an important measure of Gartner's forward revenue pipeline, came in at $5.0 billion, up 4.9% year-over-year FX neutral. However, this was a slowdown from the prior quarter's 7% contract value growth. The Global Technology Sales (GTS) contract value expanded by 3.6% year-over-year FX neutral, while Global Business Sales (GBS) contract value rose 9.2% year-over-year FX neutral. The U.S. federal government business, accounting for approximately 4% of contract value, renewed only about half of its expiring contracts during the first quarter, leading management to take a cautious approach to future outlook for this segment. Contract value grew 5%. Since the end of the first quarter, we have accelerated our stock buybacks to increase shareholder value," said CEO Gene Hall in the release. The company did, however, accelerate share repurchases, buying back 0.7 million shares for $274 million. The board increased the share repurchase authorization by $700 million in July, adding further buyback capacity for the coming quarters. Management referenced prudent cost control and "slight belt tightening" on expenses, balancing future investments with operating margin protection. Management issued updated full-year guidance, projecting consolidated GAAP revenue of at least $6.535 billion, or about 4% FX-neutral (constant currency) growth in research revenue. Segment outlooks call for at least $5.34 billion from research, $625 million from Conferences, and $575 million from Consulting. Adjusted EPS (non-GAAP) guidance was set at $11.70 or higher, with a free cash flow target of at least $1.145 billion (non-GAAP). The revised research revenue target reflects a $135 million reduction after updated views on federal contract renewals. No dividend was declared. For the remainder of the year, investors should watch the pace of contract value growth, especially in the Technology Sales segment and U.S. federal sector. Management expects share repurchases and cost discipline to play a continued role in shareholder returns.