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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
 
For the quarterly period ended June 30, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
Commission File Number 1-14443
Gartner, Inc.
(Exact name of Registrant as specified in its charter)
Delaware04-3099750
(State or other jurisdiction of(I.R.S. Employer
incorporation or organization)Identification Number)
  
P.O. Box 1021206902-7700
56 Top Gallant Road(Zip Code)
Stamford, 
Connecticut
(Address of principal executive offices) 
Registrant’s telephone number, including area code: (203) 316-1111
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, $.0005 par value per shareITNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer Accelerated filerNon-accelerated filer
Smaller reporting company Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of July 29, 2022, 79,093,899 shares of the registrant’s common shares were outstanding.
1


Table of Contents

 Page
 
 
PART II. OTHER INFORMATION
 

2


PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

GARTNER, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited; in thousands, except share data)
 June 30,December 31,
20222021
Assets  
Current assets:  
Cash and cash equivalents$360,473 $756,493 
Fees receivable, net of allowances of $9,500 and $6,500, respectively
1,171,996 1,365,180 
Deferred commissions312,048 380,569 
Prepaid expenses and other current assets136,765 117,838 
Total current assets1,981,282 2,620,080 
Property, equipment and leasehold improvements, net250,315 273,562 
Operating lease right-of-use assets481,551 548,258 
Goodwill2,943,257 2,951,317 
Intangible assets, net645,368 714,418 
Other assets288,821 308,689 
Total Assets$6,590,594 $7,416,324 
Liabilities and Stockholders’ (Deficit) Equity   
Current liabilities:  
Accounts payable and accrued liabilities$775,371 $1,134,814 
Deferred revenues2,396,143 2,238,035 
Current portion of long-term debt6,868 5,931 
Total current liabilities3,178,382 3,378,780 
Long-term debt, net of deferred financing fees 2,455,506 2,456,833 
Operating lease liabilities646,677 697,766 
Other liabilities452,896 511,887 
Total Liabilities6,733,461 7,045,266 
Stockholders’ (Deficit) Equity   
Preferred stock, $0.01 par value, 5,000,000 shares authorized; none issued or outstanding
  
Common stock, $0.0005 par value, 250,000,000 shares authorized; 163,602,067 shares issued for both periods
82 82 
Additional paid-in capital2,136,684 2,074,896 
Accumulated other comprehensive loss, net(104,516)(81,431)
Accumulated earnings3,426,467 3,049,027 
Treasury stock, at cost, 84,107,724 and 81,205,504 common shares, respectively
(5,601,584)(4,671,516)
Total Stockholders’ (Deficit) Equity (142,867)371,058 
Total Liabilities and Stockholders’ (Deficit) Equity $6,590,594 $7,416,324 
 

See the accompanying notes to Condensed Consolidated Financial Statements.
3


GARTNER, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited; in thousands, except per share data)
Three Months EndedSix Months Ended
 June 30,June 30,
 2022202120222021
Revenues:
Research$1,142,329 $1,003,238 $2,278,709 $1,982,970 
Conferences113,525 58,179 123,879 82,981 
Consulting120,667 105,902 236,673 205,406 
Total revenues1,376,521 1,167,319 2,639,261 2,271,357 
Costs and expenses:
Cost of services and product development424,535 350,802 801,568 685,269 
Selling, general and administrative604,911 488,496 1,222,815 975,751 
Depreciation22,910 25,851 46,111 51,601 
Amortization of intangibles24,754 26,154 49,902 56,668 
Acquisition and integration charges2,289 1,302 4,496 1,942 
Total costs and expenses1,079,399 892,605 2,124,892 1,771,231 
Operating income 297,122 274,714 514,369 500,126 
Interest expense, net(29,719)(27,390)(61,113)(53,539)
Gain on event cancellation insurance claims 135,545  135,545 
Other income (expense), net8,548 (3,682)37,754 11,808 
Income before income taxes275,951 379,187 491,010 593,940 
Provision for income taxes71,026 107,951 113,570 158,604 
Net income $204,925 $271,236 $377,440 $435,336 
Net income per share: 
Basic$2.55 $3.16 $4.65 $5.00 
Diluted$2.53 $3.13 $4.60 $4.95 
Weighted average shares outstanding:
Basic80,271 85,712 81,145 87,032 
Diluted80,974 86,589 82,011 87,921 

See the accompanying notes to Condensed Consolidated Financial Statements.
4


GARTNER, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Income
(Unaudited; in thousands)
Three Months EndedSix Months Ended
 June 30,June 30,
 2022202120222021
Net income $204,925 $271,236 $377,440 $435,336 
Other comprehensive (loss) income, net of tax: 
Foreign currency translation adjustments(25,431)4,639 (32,229)5,316 
Interest rate swaps – net change in deferred gain or loss3,869 5,457 9,239 10,727 
Pension plans – net change in deferred actuarial loss(143)104 (95)207 
Other comprehensive (loss) income, net of tax(21,705)10,200 (23,085)16,250 
Comprehensive income$183,220 $281,436 $354,355 $451,586 

See the accompanying notes to Condensed Consolidated Financial Statements.
5


GARTNER, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Changes in Stockholders’ (Deficit) Equity
(Unaudited; in thousands)


Three and Six Months Ended June 30, 2022
Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive Loss, NetAccumulated EarningsTreasury StockTotal
Balance at December 31, 2021$82 $2,074,896 $(81,431)$3,049,027 $(4,671,516)$371,058 
Net income— — — 172,515 — 172,515 
Other comprehensive loss— — (1,380)— — (1,380)
Issuances under stock plans— 579 — — 6,385 6,964 
Common share repurchases— — — — (463,125)(463,125)
Stock-based compensation expense — 32,121 — — — 32,121 
Balance at March 31, 2022$82 $2,107,596 $(82,811)$3,221,542 $(5,128,256)$118,153 
Net income— — — 204,925 — 204,925 
Other comprehensive loss— — (21,705)— — (21,705)
Issuances under stock plans— 4,634 — — 427 5,061 
Common share repurchases— — — — (473,755)(473,755)
Stock-based compensation expense— 24,454 — — — 24,454 
Balance at June 30, 2022$82 $2,136,684 $(104,516)$3,426,467 $(5,601,584)$(142,867)

Three and Six Months Ended June 30, 2021
Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive Loss, NetAccumulated EarningsTreasury StockTotal
Balance at December 31, 2020$82 $1,968,930 $(99,228)$2,255,467 $(3,034,823)$1,090,428 
Net income— — — 164,100 — 164,100 
Other comprehensive income— — 6,050 — — 6,050 
Issuances under stock plans— (1,543)— — 6,923 5,380 
Common share repurchases— — — — (410,450)(410,450)
Stock-based compensation expense — 36,086 — — — 36,086 
Balance at March 31, 2021$82 $2,003,473 $(93,178)$2,419,567 $(3,438,350)$891,594 
Net income— — — 271,236 — 271,236 
Other comprehensive income— — 10,200 — — 10,200 
Issuances under stock plans— 2,063 — — 2,017 4,080 
Common share repurchases— — — — (675,662)(675,662)
Stock-based compensation expense— 26,190 — — — 26,190 
Balance at June 30, 2021$82 $2,031,726 $(82,978)$2,690,803 $(4,111,995)$527,638 

See the accompanying notes to Condensed Consolidated Financial Statements.
6


GARTNER, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited; in thousands)
Six Months Ended
 June 30,
 20222021
Operating activities:  
Net income $377,440 $435,336 
Adjustments to reconcile net income to cash provided by operating activities:  
Depreciation and amortization 96,013 108,269 
Stock-based compensation expense56,575 62,276 
Deferred taxes3,256 2,294 
Loss on impairment of lease related assets35,501  
Reduction in the carrying amount of operating lease right-of-use assets35,366 37,261 
Amortization and write-off of deferred financing fees2,273 1,914 
Gain on de-designated swaps(40,547)(11,751)
Changes in assets and liabilities:  
Fees receivable, net159,098 132,650 
Deferred commissions60,156 10,494 
Prepaid expenses and other current assets(20,248)(822)
Other assets11,317 (23,769)
Deferred revenues212,083 190,814 
Accounts payable and accrued and other liabilities(404,891)(212,321)
Cash provided by operating activities583,392 732,645 
Investing activities:  
Additions to property, equipment and leasehold improvements(38,385)(24,479)
Acquisitions - cash paid (net of cash acquired) (22,774)
Cash used in investing activities(38,385)(47,253)
Financing activities:  
Proceeds from employee stock purchase plan11,995 9,414 
Proceeds from borrowings  600,000 
Payments of deferred financing fees (6,045)
Payments on revolving credit facility (5,000)
Payments on borrowings(2,663)(105,256)
Purchases of treasury stock(929,880)(1,083,350)
Cash used in financing activities(920,548)(590,237)
Net (decrease) increase in cash and cash equivalents and restricted cash(375,541)95,155 
Effects of exchange rates on cash and cash equivalents(20,479)(7,281)
Cash and cash equivalents and restricted cash, beginning of period 760,602 712,583 
Cash and cash equivalents and restricted cash, end of period $364,582 $800,457 

See the accompanying notes to Condensed Consolidated Financial Statements.
7


GARTNER, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
 
Note 1 — Business and Basis of Presentation

Business. Gartner, Inc. (NYSE: IT) delivers actionable, objective insight to executives and their teams. Our expert guidance and tools enable faster, smarter decisions and stronger performance on an organization’s mission critical priorities.

Segments. Gartner delivers its products and services globally through three business segments: Research, Conferences and Consulting. Revenues and other financial information for the Company’s segments are discussed in Note 7 — Segment Information.

Basis of presentation. The accompanying interim Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”), as defined in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 270 for interim financial information and with the applicable instructions of U.S. Securities and Exchange Commission (“SEC”) Rule 10-01 of Regulation S-X on Form 10-Q, and should be read in conjunction with the consolidated financial statements and related notes of the Company in its Annual Report on Form 10-K for the year ended December 31, 2021.

The fiscal year of Gartner is the twelve-month period from January 1 through December 31. In the opinion of management, all normal recurring accruals and adjustments considered necessary for a fair presentation of financial position, results of operations and cash flows at the dates and for the periods presented herein have been included. The results of operations for the three and six months ended June 30, 2022 may not be indicative of the results of operations for the remainder of 2022 or beyond. When used in these notes, the terms “Gartner,” the “Company,” “we,” “us,” or “our” refer to Gartner, Inc. and its consolidated subsidiaries.

Principles of consolidation. The accompanying interim Condensed Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated.

Use of estimates. The preparation of the accompanying interim Condensed Consolidated Financial Statements requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. Such estimates include the valuation of fees receivable, goodwill, intangible assets and other long-lived assets, as well as tax accruals and other liabilities. In addition, estimates are used in revenue recognition, income tax expense or benefit, performance-based compensation charges, depreciation and amortization. Management believes its use of estimates in these interim Condensed Consolidated Financial Statements to be reasonable.

Management continually evaluates and revises its estimates using historical experience and other factors, including the general economic environment and actions it may take in the future. Management adjusts these estimates when facts and circumstances dictate. However, these estimates may involve significant uncertainties and judgments and cannot be determined with precision. In addition, these estimates are based on management’s best judgment at a point in time. As a result, differences between estimates and actual results could be material and would be reflected in the Company’s consolidated financial statements in future periods.

Cash and cash equivalents and restricted cash. Below is a table presenting the beginning-of-period and end-of-period cash amounts from the Company’s Condensed Consolidated Balance Sheets and the total cash amounts presented in the Condensed Consolidated Statements of Cash Flows (in thousands).
June 30,December 31,
20222021
Cash and cash equivalents$360,473 $756,493 
Restricted cash classified in (1):
Prepaid expenses and other current assets4,109 4,109 
Cash and cash equivalents and restricted cash$364,582 $760,602 
(1)Restricted cash consists of escrow accounts established in connection with certain of the Company’s business acquisitions. Generally, such cash is restricted to use due to provisions contained in the underlying stock or asset purchase agreement.
8


The Company will disburse the restricted cash to the sellers of the businesses upon satisfaction of any contingencies described in such agreements (e.g., potential indemnification claims).

Revenue recognition. Revenue is recognized in accordance with the requirements of FASB ASC Topic 606, Revenue from Contracts with Customers (“ASC Topic 606”). Revenue is only recognized when all of the required criteria for revenue recognition have been met. The accompanying Condensed Consolidated Statements of Operations present revenue net of any sales or value-added taxes that we collect from customers and remit to government authorities. ASC Topic 270 requires certain disclosures in interim financial statements around the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Note 4 — Revenue and Related Matters provides additional information regarding the Company’s revenues.

Gain on event cancellation insurance claims. In May 2021, the Company received $150.0 million of proceeds related to 2020 event cancellation insurance claims, and recorded a pre-tax gain of $135.5 million. The Company does not record any gain on insurance claims in excess of expenses incurred until the receipt of the insurance proceeds is deemed to be realizable.

Adoption of new accounting standards. The Company adopted the accounting standard described below during the six months ended June 30, 2022.

Business Combinations In October 2021, the FASB issued ASU No. 2021-08, Business Combinations, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU No. 2021-08”). ASU No. 2021-08 provides guidance for a business combination on how to recognize and measure contract assets and contract liabilities from revenue contracts with customers and other contracts that apply the provisions of ASC Topic 606, Revenue from Contracts with Customers. Specifically, the proposed amendments would require that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC Topic 606. Generally, this would result in an acquirer recognizing and measuring the acquired contract assets and contract liabilities consistent with how they were recognized and measured in the acquiree’s financial statements (if the acquiree prepared financial statements in accordance with U.S. GAAP). The rule will be effective for public entities on January 1, 2023, with early adoption permitted. Gartner has elected to adopt ASU No. 2021-08 effective January 1, 2022. ASU No. 2021-08 will not impact acquired contract assets or liabilities from business combinations occurring prior to January 1, 2022, and the impact in future periods will depend on the contract assets and contract liabilities acquired in future business combinations.

Accounting standards issued but not yet adopted. The FASB has issued accounting standards that have not yet become effective and may impact the Company’s consolidated financial statements or related disclosures in future periods. Those standards and their potential impact are discussed below.

Accounting standard effective immediately upon voluntary election by Gartner

Reference Rate Reform — In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform—Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU No. 2020-04”). ASU No. 2020-04 provides that an entity can elect not to apply certain required modification accounting in U.S. GAAP to contracts where all changes to the critical terms relate to reference rate reform (e.g., the expected discontinuance of LIBOR and the transition to an alternative reference interest rate). In addition, the rule provides optional expedients and exceptions that enable entities to continue to apply hedge accounting for hedging relationships where one or more of the critical terms change due to reference rate reform. The rule became effective for all entities as of March 12, 2020 and will generally no longer be available to apply after December 31, 2022. The Company is currently evaluating the potential impact of ASU No. 2020-04 on its consolidated financial statements, including the rule’s potential impact on any debt modifications or other contractual changes in the future that may result from reference rate reform.

Accounting standard effective later in 2022

Government Assistance — In November 2021, the FASB issued ASU No. 2021-10, Government Assistance (Topic 832), Disclosures by Business Entities about Government Assistance (“ASU No. 2021-10”). ASU No. 2021-10 requires business entities to annually disclose information about certain government assistance they receive. The rule will be effective for public entities for annual periods beginning after December 15, 2021. The adoption of ASU No. 2021-10 is currently not expected to have a material impact on the Company’s financial statement disclosures.

9



Note 2 — Acquisition

On June 17, 2021, the Company acquired 100% of the outstanding capital stock of Pulse Q&A Inc. (“Pulse”), a privately-held company based in San Francisco, California, for an aggregate purchase price of $29.9 million. Pulse is a technology-enabled community platform.

During 2021, the Company paid $22.9 million in cash for Pulse after considering the cash acquired with the business, amounts held in escrow and certain other purchase price adjustments at closing. In addition to the purchase price, the Company may also be required to pay up to $4.5 million in cash based on the continuing employment of certain key employees. Such amount will be recognized as compensation expense over three years and reported in Acquisition and integration charges in the Condensed Consolidated Statements of Operations.

The Company recorded $31.0 million of goodwill and finite-lived intangible assets and $1.1 million of liabilities on a net basis for the Pulse acquisition.

Note 3 — Goodwill and Intangible Assets

Goodwill

Goodwill represents the excess of the purchase price of acquired businesses over the estimated fair values of the tangible and identifiable intangible net assets acquired. Evaluations of the recoverability of goodwill are performed in accordance with FASB ASC Topic 350, which requires an annual assessment of potential goodwill impairment at the reporting unit level and whenever events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable.

When performing the annual assessment of the recoverability of goodwill, the Company initially performs a qualitative analysis evaluating whether any events or circumstances occurred or exist that provide evidence that it is more likely than not that the fair value of any of the Company’s reporting units is less than the related carrying amount. If the Company does not believe that it is more likely than not that the fair value of any of the Company’s reporting units is less than the related carrying amount, then no quantitative impairment test is performed. However, if the results of the qualitative assessment indicate that it is more likely than not that the fair value of a reporting unit is less than its respective carrying amount, then a quantitative impairment test is performed. Evaluating the recoverability of goodwill requires judgments and assumptions regarding future trends and events. As a result, both the precision and reliability of the estimates are subject to uncertainty.

The Company’s most recent annual impairment test of goodwill was a qualitative analysis conducted during the quarter ended September 30, 2021 that indicated no impairment. Subsequent to completing the 2021 annual impairment test, there were no events or changes in circumstances noted that required an interim impairment test.

The table below presents changes to the carrying amount of goodwill by segment during the six months ended June 30, 2022 (in thousands).
 ResearchConferencesConsultingTotal
Balance at December 31, 2021 (1)$2,670,934 $184,021 $96,362 $2,951,317 
Foreign currency translation impact (6,795)(79)(1,186)(8,060)
Balance at June 30, 2022 (1)$2,664,139 $183,942 $95,176 $2,943,257 
(1)The Company does not have any accumulated goodwill impairment losses.

10


Finite-Lived Intangible Assets

The tables below present reconciliations of the carrying amounts of the Company’s finite-lived intangible assets as of the dates indicated (in thousands).
June 30, 2022Customer
Relationships
Technology-relatedOtherTotal
Gross cost at December 31, 2021$1,096,358 $61,216 $10,436 $1,168,010 
Foreign currency translation impact (31,141)(458) (31,599)
Gross cost1,065,217 60,758 10,436 1,136,411 
Accumulated amortization (1)(445,119)(40,823)(5,101)(491,043)
Balance at June 30, 2022$620,098 $19,935 $5,335 $645,368 
December 31, 2021Customer
Relationships
Technology-relatedOther Total
Gross cost $1,096,358 $61,216 $10,436 $1,168,010 
Accumulated amortization (1)(413,266)(35,727)(4,599)(453,592)
Balance at December 31, 2021$683,092 $25,489 $5,837 $714,418 
(1) Finite-lived intangible assets are amortized using the straight-line method over the following periods: Customer relationships—6 to 13 years; Technology-related—3 to 7 years; and Other—4 to 11 years.

Amortization expense related to finite-lived intangible assets was $24.8 million and $26.2 million during the three months ended June 30, 2022 and 2021, respectively, and $49.9 million and $56.7 million during the six months ended June 30, 2022 and 2021, respectively. The estimated future amortization expense by year for finite-lived intangible assets is presented in the table below (in thousands).

2022 (remaining six months)$49,113 
202398,211 
202491,066 
202580,550 
202677,876 
Thereafter248,552 
$645,368 

11


Note 4 — Revenue and Related Matters

Disaggregated Revenue — The Company’s disaggregated revenue by reportable segment is presented in the tables below for the periods indicated (in thousands).

By Primary Geographic Market (1)


Three Months Ended June 30, 2022
Primary Geographic MarketResearchConferencesConsultingTotal
United States and Canada$752,670 $87,267 $72,816 $912,753 
Europe, Middle East and Africa255,417 21,036 34,047 310,500 
Other International134,242 5,222 13,804 153,268 
Total revenues $1,142,329 $113,525 $120,667 $1,376,521 
Three Months Ended June 30, 2021
Primary Geographic MarketResearchConferencesConsultingTotal
United States and Canada$646,432 $40,328 $59,605 $746,365 
Europe, Middle East and Africa236,756 14,468 35,459 286,683 
Other International120,050 3,383 10,838 134,271 
Total revenues$1,003,238 $58,179 $105,902 $1,167,319 
Six Months Ended June 30, 2022
Primary Geographic MarketResearchConferencesConsultingTotal
United States and Canada$1,493,199 $94,919 $141,605 $1,729,723 
Europe, Middle East and Africa518,546 22,274 66,491 607,311 
Other International266,964 6,686 28,577 302,227 
Total revenues$2,278,709 $123,879 $236,673 $2,639,261 
Six Months Ended June 30, 2021
Primary Geographic MarketResearchConferencesConsultingTotal
United States and Canada$1,277,765 $59,927 $117,091 $1,454,783 
Europe, Middle East and Africa466,957 17,181 65,821 549,959 
Other International238,248 5,873 22,494 266,615 
Total revenues$1,982,970 $82,981 $205,406 $2,271,357 
(1)Revenue is reported based on where the sale is fulfilled.

The Company’s revenue is generated primarily through direct sales to clients by domestic and international sales forces and a network of independent international sales agents. Most of the Company’s products and services are provided on an integrated worldwide basis and, because of this integrated delivery approach, it is not practical to precisely separate the Company’s revenue by geographic location. Accordingly, revenue information presented in the above tables is based on internal allocations, which involve certain management estimates and judgments.


12


By Timing of Revenue Recognition

Three Months Ended June 30, 2022
Timing of Revenue RecognitionResearchConferencesConsultingTotal
Transferred over time (1)$1,037,864 $ $95,201 $1,133,065 
Transferred at a point in time (2)104,465 113,525 25,466 243,456 
Total revenues $1,142,329 $113,525 $120,667 $1,376,521 
Three Months Ended June 30, 2021
Timing of Revenue RecognitionResearchConferencesConsultingTotal
Transferred over time (1)$916,754 $ $85,989 $1,002,743 
Transferred at a point in time (2)86,484 58,179 19,913 164,576 
Total revenues$1,003,238 $58,179 $105,902 $1,167,319 
Six Months Ended June 30, 2022
Timing of Revenue RecognitionResearchConferencesConsultingTotal
Transferred over time (1)$2,063,674 $ $191,637 $2,255,311 
Transferred at a point in time (2)215,035 123,879 45,036 383,950 
Total revenues $2,278,709 $123,879 $236,673 $2,639,261 
Six Months Ended June 30, 2021
Timing of Revenue RecognitionResearchConferencesConsultingTotal
Transferred over time (1)$1,810,841 $ $170,331 $1,981,172 
Transferred at a point in time (2)172,129 82,981 35,075 290,185 
Total revenues$1,982,970 $82,981 $205,406 $2,271,357 

(1)Research revenues are recognized in connection with performance obligations that are satisfied over time using a time-elapsed output method to measure progress. Consulting revenues are recognized over time using labor hours as an input measurement basis.
(2)The revenues in this category are recognized in connection with performance obligations that are satisfied at the point in time that the contractual deliverables are provided to the customer.

Performance Obligations — For customer contracts that are greater than one year in duration, the aggregate amount of the transaction price allocated to performance obligations that were unsatisfied (or partially unsatisfied) as of June 30, 2022 was approximately $4.7 billion. The Company expects to recognize $1.5 billion, $2.2 billion and $942.2 million of this revenue (most of which pertains to Research) during the remainder of 2022, the year ending December 31, 2023 and thereafter, respectively. The Company applies a practical expedient that is permitted under ASC Topic 606 and, accordingly, it does not disclose such performance obligation information for customer contracts that have original durations of one year or less. The Company’s performance obligations for contracts meeting this ASC Topic 606 disclosure exclusion primarily include: (i) stand-ready services under Research subscription contracts; (ii) holding conferences and meetings where attendees and exhibitors can participate; and (iii) providing customized Consulting solutions for clients under fixed fee and time and materials engagements. The remaining duration of these performance obligations is generally less than one year, which aligns with the period that the parties have enforceable rights and obligations under the affected contracts.

Customer Contract Assets and Liabilities — The timing of the recognition of revenue and the amount and timing of the Company’s billings and cash collections, including upfront customer payments, result in the recognition of both assets and liabilities on the Company’s Condensed Consolidated Balance Sheets. The table below provides information regarding certain of the Company’s balance sheet accounts that pertain to its contracts with customers (in thousands).

13


June 30,December 31,
20222021
Assets:
Fees receivable, gross (1)$1,181,496 $1,371,680 
Contract assets recorded in Prepaid expenses and other current assets (2)$26,666 $20,054 
Contract liabilities:
Deferred revenues (current liability) (3)$2,396,143 $2,238,035 
Non-current deferred revenues recorded in Other liabilities (3)35,656 48,176 
Total contract liabilities$2,431,799 $2,286,211 
(1)Fees receivable represent an unconditional right to payment from the Company’s customers and include both billed and unbilled amounts.
(2)Contract assets represent recognized revenue for which the Company does not have an unconditional right to payment as of the balance sheet date because the project may be subject to a progress billing milestone or some other billing restrictions.
(3)Deferred revenues represent amounts (i) for which the Company has received an upfront customer payment or (ii) that pertain to recognized fees receivable. Both situations occur before the completion of the Company’s performance obligation(s).

The Company recognized revenue of $956.4 million and $817.3 million during the three months ended June 30, 2022 and 2021, respectively, and $1.4 billion and $1.3 billion during the six months ended June 30, 2022 and 2021, respectively, that was attributable to deferred revenues that were recorded at the beginning of each such period. Those amounts primarily consisted of Research revenues that were recognized ratably as control of the goods or services passed to the customer during the reporting periods. During each of the three and six months ended June 30, 2022 and 2021, the Company did not record any material impairments related to its contract assets.

Note 5 — Computation of Earnings Per Share

Basic earnings per share (“EPS”) is computed by dividing net income by the weighted average number of shares of Common Stock outstanding during the period. Diluted EPS reflects the potential dilution of securities that could share in earnings. Potential shares of common stock are excluded from the computation of diluted earnings per share when their effect would be anti-dilutive.

The table below sets forth the calculation of basic and diluted income per share for the periods indicated (in thousands, except per share data).
Three Months EndedSix Months Ended
 June 30,June 30,
 2022202120222021
Numerator:    
Net income used for calculating basic and diluted income per share$204,925 $271,236 $377,440 $435,336 
Denominator:    
Weighted average common shares used in the calculation of basic income per share 80,271 85,712 81,14587,032
Dilutive effect of outstanding awards associated with stock-based compensation plans (1)703 877 866889
Shares used in the calculation of diluted income per share 80,974 86,589 82,01187,921
Basic income per share$2.55 $3.16 $