Gartner exceeded revenue predictions for Q1 2025 and reaffirmed its position as the leading analyst firm despite market volatility. Gartner continues to invest for growth, expanding its sales team headcount while managing operational costs. Technology and business leaders are making critical decisions under extreme uncertainty. Gartner’s strategic advice and leadership are still sought by these leaders.
What You Need to Know
- Gartner has the ear of executives, and volatility is not changing that. AR pros should note Gartner’s success during dynamic market conditions.
- Gartner keeps growing. All three revenue segments, Research, Consulting, and Conferences, grew 4% compared to Q1 2024. Total revenue was also up 4%.
- Gartner lost contracts with the U.S. federal government in Q1, a trend that will probably continue. But Gartner’s offerings and client mix are highly diversified, and this is far from a critical blow.
Q1 2025 Metrics
- Total Revenue: $1.8B; up 4% YoY
- Contract value: $5.1B; up 7% YoY
- Research Revenue: $1.32B; up 4% YoY
- Consulting Revenue: $1.39B; up 4% YoY
- Conference Revenue: $72 million; up 4% YoY
- Operating cash flow: $314 million, up 66% YoY. The increase is largely due to the improved timing of collections.
- Sales headcount: Headcount in the sales function grew 4% YoY.
- Overall headcount: 21,107; up 4% YoY
Spotlight Take on Gartner Q1 2025 Earnings
- Research remains a driver:
- Research constituted 74% of revenue in Q1, matching Q1 2024. The Research, Consulting, and Conferences segments each grew by 4% YoY.
- Lowered revenue expectation:
- Gartner previously estimated 2025 revenue to be at least $6.56 billion, but has adjusted that estimate down to $6.54 billion. Lower contract value growth due to challenges with U.S. federal government contracts is the key reason why.
- Falling federal contracts:
- Contracts with the U.S. federal government represented about 4% of Gartner’s total contract value, and they’re at risk. Gartner’s research contract value with the U.S. federal government fell from $275 million in Q4 2024 to $225 million in Q1 2025. Slightly less than half of the U.S. federal government contract value that was eligible for renewal in the first quarter of 2025 was retained.
- AI:
- AI is as important to Gartner as it is to the market. Gartner is positioned to shepherd adoption as “one of the world’s leading experts in AI,” with knowledge of thousands of end-user “best uses and business cases for AI.”
- Consulting growth:
- Consulting services experienced strong growth. Consulting revenue increased 5%, and the consulting backlog grew by 16%. Hall described consulting as “an important complement to our IT research business.”
