Daily Research News Online no. 7511 - Sales Investment Pays Off for Gartner Research

Sales Investment Pays Off for Gartner Research

October 30 2007

Technology consultancy Gartner, Inc. has reported results for the third quarter, with rapid growth in its Research business segment. The segment represents almost two thirds of its revenue and in Q3 saw contract value rise 18% year-on-year to a record $704.7m, following investment in its sales force.

CEO Gene Hall says the results, including the firm's third consecutive quarter of high-teens contract value growth, reflect investment in sales capacity and research product management. 'As a result of these investments, contract value and revenue in the Research segment have grown ahead of the expectations we established in our financial roadmap'. The success means this investment will be stepped up.

Total revenue for third quarter 2007 grew 13% year-over-year to $273.1m; net Income rose 30% year-on-year to $12.5m and Normalized EBITDA 21% to $36.3m. For the same period, cash flow from operating activities was $38.8m and capital expenditures were $6.2m.

Third quarter revenue for the group's Research business segment rose 18% year-over-year to $170.2m and gross contribution margin c.3 percentage points to 65%. At September 30 Research contract value was also up 18% to a record $704.7m. In the separate Consulting segment, Q3 revenue rose 6% on the year to $73.8m, with gross contribution margin up c. one point to 38%. Gartner's third segment, Events, also enjoyed revenue growth year-over-year, up 11% to $26.7m.

Gartner is targeting total revenue for full year 2007 of $1.171 to $1.187 billion, up 10%-12% over 2006, including research revenue of $665-670m. It expects full year cash flow from operations of $135-150m, capital expenditures of c.$25m, GAAP EPS of $0.66 to $0.73 per share (up 32-46% on the year) and normalized EBITDA of $193-203m, up 24-30%.

Founded in 1979, Gartner is headquartered in Stamford, Connecticut and online at www.gartner.com.

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.