Gartner, Inc. (NYSE:IT) Q3 2023 Earnings Call Transcript

Operator: And it’s from the line of Manav Patnaik with Barclays. Please proceed.

Manav Patnaik : Thank you. Good morning. Craig, just to ask the expense question a little differently. I mean, obviously, the seasonal tick-up going into 4Q, but if you look at the full year thus far, like has that expense base been more normal or are there any other puts and takes we need to consider as we go into next year?

Craig Safian : Yes. Good morning, Manav. I think it is — I would characterize it as roughly normal. I do think that as we pivot into next year we are likely to get back to a little bit faster headcount and territory growth. And so, we need to model that in. But that’s probably the biggest lever on that operating expense base. Other than the timing of conferences and things like that. It is just — as Jean mentioned earlier, we grew a lot, particularly in 2022. And so, this year we have been, we are sort of operationalizing maturing, and digesting a lot of that growth. And so there has not been a huge amount of net headcount growth baked into the 2023 numbers. There is some, but not, as much as we have had historically. I think we get back to a more normal level of that next year. So that would have to be modeled in our normal wage inflation and merit increase, and things like that. But the other stuff is generally normal course.

Manav Patnaik : Got it. Okay. And then my second question just around the new sales environment. Obviously, fourth quarter is the big quarter. Any color on that plus, just I think the new sales numbers you gave for GTS and GBS were positive mid to high single-digits. Like, how much of that was comps versus and just talk about the momentum there, I guess.

Gene Hall: So, in terms of the selling environment, again, I think it is unchanged. We see the same selling grind sort of Q2, Q3, and we are expecting the same environment in Q4 in terms of comp outlook. Craig?

Craig Safian: Correct. And, I mean, I think you are referring to the headcount numbers. And so, I mean, GBS headcount was up 10% year-over-year. GTS up 4.5%. Again, we are constantly, as we have talked about, you are probably tired of hearing me say recalibrating those numbers around a variety of different scenarios for the end of the year. Obviously, there is only another two months left in the year. But we expect to end the year, sort of aligned from an account perspective and CV perspective. So that we roll into next year with the right size salesforce. And then we will continue to grow that salesforce moving forward to go after that huge market opportunity.

Manav Patnaik : Apologies, Craig. I was referring to the new business number, but I appreciate the headcount color as well.

Craig Safian: Okay. Great. Sorry about that. So, on the new business side, I think it is a combination of a little bit easier comps, and the maturation of the sales force, coming up tenure curve.

Manav Patnaik : Okay. Thank you so much.

Operator: One moment for the next question, please. And it comes from the line of George Tong with Goldman Sachs. Please proceed.

George Tong: Hi. Thanks. Good morning. Going back to tech vendor trends, you mentioned that, research non-subscription revenues were similar in terms of performance to 2Q, and tech vendor CV growth was in the low single-digits. Can you elaborate a little bit more on what you are seeing with tech vendors? And if you are updated 2023 guide, assumes stabilization or improvement in performance.

Gene Hall: So, I would say for Q3, we didn’t see any change in the tech vendor environment, just the same as we have seen in Q2. In terms of the guidance, I will let Craig talk.