UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

GARTNER, INC.

(Exact name of registrant as specified in its charter)

DELAWARE		1-14443		04-3099750
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification No.)

P.O. Box 10212
56 Top Gallant Road
Stamford, CT 06902-7747
(Address of Principal Executive Offices, including Zip Code)

(203) 316-1111
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On July 30, 2008, Gartner, Inc. (the “Company”) announced financial results for the three and six months ended June 30, 2008. A copy of the Company’s press release is furnished as Exhibit 99.1.

In accordance with General Instruction B.2 of Form 8-K, the information in this Item 2.02 and in Exhibit 99.1 of this Current Report on Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

     (d) Exhibits

EXHIBIT NO.		DESCRIPTION
99.1		Press Release issued July 30, 2008 with respect to financial results for Gartner, Inc. for the three and six months ended June 30, 2008.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

EXHIBIT INDEX

EXHIBIT NO.		DESCRIPTION
99.1		Press Release issued July 30, 2008 with respect to financial results for Gartner, Inc. for the three and six months ended June 30, 2008.

Exhibit 99.1

Gartner		Press Release

CONTACT:
Henry A. Diamond
Group Vice President
Investor Relations and Corporate Finance
+1 203 316 3399
henry.diamond@gartner.com

STAMFORD, Conn., July 30, 2008 — Gartner, Inc. (NYSE: IT), the leading provider of research and analysis on the global information technology industry, today reported results for second quarter 2008.

Contract value, a key leading indicator for Gartner’s Research segment, increased 16% year-over-year to a record level of $794.2 million, reflecting the successful execution of the Company’s strategy to accelerate the growth of its Research business. Total revenue for second quarter 2008 grew 17% year-over-year to $343.9 million, driven by double-digit growth in each of Gartner’s three business segments. Excluding the impact of foreign exchange, research contract value and total revenue each increased 13% year-over-year.

For second quarter 2008, diluted EPS from continuing operations increased 173% year-over-year to $0.30, net income increased 113% year-over-year to $29.9 million and Normalized EBITDA increased 37% year-over-year to $60.7 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. See “Non-GAAP Financial Measures” for a discussion of Normalized EBITDA and a reconciliation to net income.

Gene Hall, Gartner’s chief executive officer, commented, “During the second quarter we continued to experience solid demand for our services. The performance of our Research and Events businesses was in-line with our expectations while our Consulting business grew ahead of expectations. Given our vast market opportunity and high-value products, we are well-positioned to meet our growth targets for the remainder of the year and beyond.”

Research – Revenue for second quarter 2008 increased 20% year-over-year to $195.8 million and gross contribution margin improved 2 percentage points to 65%. At June 30, 2008, research contract value was a record $794.2 million, up 16% year-over-year. Client and wallet retention rates for second quarter 2008 were 81% and 101%, respectively.

Consulting – Revenue for second quarter 2008 increased 13% year-over-year to $94.6 million and gross contribution margin improved 2 percentage points to 43%. Second quarter utilization increased 2

-more-

percentage points year-over-year to 75% and backlog increased 2% year-over-year to $111.3 million at June 30, 2008. Billable headcount was 478 as of June 30, 2008, versus 487 last year, reflecting the exiting of consulting operations in Asia Pacific during 2007.

Events – Revenue for second quarter 2008 increased 20% to $51.0 million and gross contribution margin was 44%. The Company held 25 events with 13,873 attendees, as compared to 20 events with 12,842 attendees in second quarter 2007. As previously announced, four large events that were held in first quarter 2007 were shifted into second quarter 2008, which positively impacted revenue in the second quarter.

Cash Flow and Balance Sheet Highlights

During second quarter 2008, Gartner generated cash provided by operating activities of $67.6 million, up 54% versus last year, and had capital expenditures of $5.5 million. The Company deployed its cash principally to repurchase 3.9 million shares of its common stock at a cost of $84.7 million. As of June 30, 2008, the Company had total debt of $469.8 million and cash of $136.9 million.

Financial Outlook for 2008

Gartner updated its most recent financial outlook for 2008. The Company increased its projection for Research revenue and total revenue and reiterated its guidance for all other financial metrics. The increase in outlook for Research revenue was primarily due to higher foreign exchange benefits.

For the full year, the Company is now targeting total revenue of $1.288 to $1.313 billion, an increase of 10% to 12% versus 2007. By segment, the Company is now targeting Research revenue of $780 to $790 million, an increase of 16% to 17% versus 2007, and is continuing to target Consulting revenue of $335 to $345 million, an increase of 3% to 6% versus 2007, Events revenue of $168 to $172 million, an increase of 5% to 7% versus 2007, and other revenue of $5 to $6 million.

Based on the above revenue outlook, coupled with the Company’s expectation that it will increase investments in its businesses during the second half of the year, Gartner is continuing to target Normalized EBITDA for the full year 2008 of $209 to $219 million, an increase of 10% to 15% versus 2007, Diluted EPS from continuing operations of $0.88 to $0.98, an increase of 33% to 48% versus 2007, cash flow from operations of $155 to $170 million and capital expenditures of $25 to $27 million. Normalized EBITDA excludes a projected $26 to $28 million of pre-tax expense related to SFAS 123R.

Gartner’s 2008 outlook excludes the results of its former Vision Events business, which was sold in February 2008 and is now reported as a discontinued operation, and the $7.1 million gain-on-sale resulting from the divestiture.

Ken Davis to Lead EUP, Robin Kranich to Lead Human Resources, Michael Yoo to Lead HTTP

Separately, Gartner announced that Ken Davis, senior vice president and formerly leader of Gartner’s High Tech and Telecom Programs (HTTP), will now lead Gartner’s End User Programs (EUP) and Robin Kranich, senior vice president and formerly leader of EUP, will now lead Gartner’s global human resources organization. Michael Yoo, formerly head of product development and strategy for Gartner Executive Programs, has been promoted to senior vice president and will succeed Davis as leader of HTTP. Yoo joined the Company in 2006 as the head of product development for HTTP. During this time, he oversaw the development and launch of the Gartner for Business Leaders suite. In 2007, he led

Gartner, Inc.		page 2

product development and strategy for the Executive Programs team, where he oversaw the development and launch of the Gartner for IT Executives product line for CIOs.

Conference Call Information

Gartner has scheduled a conference call at 10:00 a.m. ET today, Wednesday, July 30, 2008, to discuss the Company’s financial results. The conference call will be available via the Internet by accessing the Company’s web site at http://investor.gartner.com. A replay of the webcast will be available for 90 days following the call.

About Gartner

Gartner, Inc. (NYSE: IT) is the world’s leading information technology research and advisory company. We deliver the technology-related insight necessary for our clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, we are the indispensable partner to 60,000 clients in 10,000 distinct organizations. Through the resources of Gartner Research, Gartner Executive Programs, Gartner Consulting and Gartner Events, we work with every client to research, analyze and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, U.S.A., and has 4,000 associates, including 1,200 research analysts and consultants in 80 countries. For more information, visit www.gartner.com.

Non-GAAP Financial Measures

Investors are cautioned that normalized EBITDA contained in this press release is not a financial measure under generally accepted accounting principles. In addition, it should not be construed as an alternative to any other measures of performance determined in accordance with generally accepted accounting principles. This non-GAAP financial measure is provided to enhance the user’s overall understanding of the Company’s current financial performance and the Company’s prospects for the future. We believe normalized EBITDA is an important measure of our recurring operations as it excludes items that may not be indicative of our core operating results. Normalized EBITDA is based on operating income, excluding depreciation, accretion on obligations related to excess facilities, amortization, META integration charges, SFAS 123 (R), goodwill impairments, and other charges.

Safe Harbor Statement

Statements contained in this press release regarding the growth and prospects of the business, the Company’s 2008 financial results and all other statements in this release other than recitation of historical facts are forward-looking statements (as defined in the Private Securities Litigation Reform Act of 1995). Such forward-looking statements include risks and uncertainties; consequently, actual results may differ materially from those expressed or implied thereby. Factors that could cause actual results to differ materially include, but are not limited to ability to expand or even retain the Company’s customer base; ability to grow or even sustain revenue from individual customers; ability to attract and retain professional staff of research analysts and consultants upon whom the Company is dependent; ability to achieve and effectively manage growth; ability to pay the Company’s debt obligations; ability to achieve continued customer renewals and achieve new contract value, backlog and deferred revenue growth in light of

Gartner, Inc.		page 3

competitive pressures; ability to carry out the Company’s strategic initiatives and manage associated costs; substantial competition from existing competitors and potential new competitors; additional risks associated with international operations including foreign currency fluctuations; the impact of restructuring and other charges on the Company’s businesses and operations; general economic conditions; and other risks listed from time to time in the Company’s reports filed with the Securities and Exchange Commission. These filings can be found on Gartner’s Web site at www.gartner.com/investors and the SEC’s Web site at www.sec.gov. Forward-looking statements included herein speak only as of the date hereof and the Company disclaims any obligation to revise or update such statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events or circumstances.

# # #

Gartner, Inc.		page 4

GARTNER, INC.
Condensed Consolidated Statements of Operations
(Unaudited; in thousands, except per share amounts)

		Three Months Ended												Six Months Ended
		June 30,												June 30,
		2008				2007								2008				2007
Revenues:
Research		$	195,798			$	163,753				20	%		$	385,339			$	322,553				19	%
Consulting			94,607				83,555				13	%			172,725				159,822				8	%
Events			50,970				42,362				20	%			71,544				69,289				3	%
Other			2,564				3,178				-19	%			4,430				5,381				-18	%
Total revenues			343,939				292,848				17	%			634,038				557,045				14	%
Costs and expenses:
Cost of services and product development			152,153				136,842				11	%			278,113				260,198				7	%
Selling, general and administrative			137,746				119,874				15	%			268,632				234,982				14	%
Depreciation			6,064				6,012				1	%			12,573				11,747				7	%
Amortization of intangibles			401				596				-33	%			815				1,125				F
Other charges			—				9,084				-100	%			—				9,084				-100	%
Total costs and expenses			296,364				272,408				9	%			560,133				517,136				8	%
Operating income			47,575				20,440				F				73,905				39,909				85	%
Interest expense, net			(4,960	)			(5,398	)			8	%			(9,675	)			(11,661	)			17	%
Other (expense) income , net			(150	)			1,814				U				373				1,776				U
Income before income taxes			42,465				16,856				F				64,603				30,024				F
Provision for income taxes			12,337				4,877				U				19,882				9,068				U
Income from continuing operations			30,128				11,979				F				44,721				20,956				F
(Loss) income from discontinued operations, net of taxes (a)			(228	)			2,069				F				6,723				1,284				F
Net income		$	29,900			$	14,048				F			$	51,444			$	22,240				F
Income per common share:
Basic:
Income from continuing operations		$	0.32			$	0.11				F			$	0.46			$	0.20				F
Income from discontinued operations			—				0.02				U				0.07				0.01				F
Income per share		$	0.32			$	0.13				F			$	0.53			$	0.21				F
Diluted:
Income from continuing operations		$	0.30			$	0.11				F			$	0.44			$	0.19				F
Income from discontinued operations			—				0.02				U				0.07				0.01				F
Income per share		$	0.30			$	0.13				F			$	0.51			$	0.20				F
Weighted average shares outstanding:
Basic			94,845				104,259				-9	%			96,317				103,890				-7	%
Diluted			98,895				109,571				-10	%			100,252				108,941				-8	%

BUSINESS SEGMENT DATA (a)
(Dollars in thousands)

						Direct				Gross				Contrib.
		Revenue				Expense				Contribution				Margin
Three Months Ended 6/30/08
Research		$	195,798			$	67,896			$	127,902				65	%
Consulting			94,607				54,072				40,535				43	%
Events			50,970				28,331				22,639				44	%
Other			2,564				555				2,009				78	%
TOTAL		$	343,939			$	150,854			$	193,085				56	%
Three Months Ended 6/30/07
Research		$	163,753			$	61,179			$	102,574				63	%
Consulting			83,555				49,245				34,310				41	%
Events			42,362				23,023				19,339				46	%
Other			3,178				773				2,405				76	%
TOTAL		$	292,848			$	134,220			$	158,628				54	%
Six Months Ended 6/30/08
Research		$	385,339			$	132,417			$	252,922				66	%
Consulting			172,725				100,853				71,872				42	%
Events			71,544				39,926				31,618				44	%
Other			4,430				940				3,490				79	%
TOTAL		$	634,038			$	274,136			$	359,902				57	%
Six Months Ended 6/30/07
Research		$	322,553			$	120,677			$	201,876				63	%
Consulting			159,822				97,477				62,345				39	%
Events			69,289				35,422				33,867				49	%
Other			5,381				1,325				4,056				75	%
TOTAL		$	557,045			$	254,901			$	302,144				54	%

SELECTED STATISTICAL DATA (a)

		June 30,				June 30,
		2008				2007
Research contract value		$	794,153	(b)		$	682,987	(b)
Research client retention			81	%			82	%
Research wallet retention			101	%			103	%
Research client organizations			10,207				9,571
Consulting backlog		$	111,300	(b)		$	108,826	(b)
Consulting—quarterly utilization			75	%			73	%
Consulting billable headcount			478				487
Consulting—average annualized revenue per billable headcount		$	489	(b)		$	450	(b)
Events—number of events for the quarter			25				20
Events—attendees for the quarter			13,873				12,842

SUPPLEMENTAL INFORMATION
GAAP to Normalized EBITDA Reconciliation
(in thousands)

Reconciliation — GAAP to Normalized EBITDA (1):

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2008				2007				2008				2007
Net income		$	29,900			$	14,048			$	51,444			$	22,240
Interest expense, net			4,960				5,398				9,675				11,661
Other expense (income), net			150				(1,814	)			(373	)			(1,776	)
Loss (income) from discontinued operations (2)			228				(2,069	)			(6,723	)			(1,284	)
Tax provision			12,337				4,877				19,882				9,068
Operating income		$	47,575			$	20,440			$	73,905			$	39,909
Normalizing adjustments:
Depreciation, accretion, and amortization			6,706				6,979				13,883				13,681
Other charges (3)			—				9,084				—				9,084
SFAS No. 123(R) stock compensation expense (4)			6,424				7,840				13,056				13,407
Normalized EBITDA		$	60,705			$	44,343			$	100,844			$	76,081

Footnotes