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What changed in Gartner's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Gartner's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+211 added−222 removedSource: 10-K (2024-02-15) vs 10-K (2023-02-16)

Top changes in Gartner's 2023 10-K

211 paragraphs added · 222 removed · 169 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeWe are a trusted advisor and an objective resource for more than 15,000 enterprises in approximately 90 countries and territories— across all major functions, in every industry and enterprise size. Gartner delivers its products and services globally through three business segments – Research, Conferences and Consulting, as described below.
Biggest changeITEM 1. BUSINESS. GENERAL Gartner, Inc. (NYSE: IT) delivers actionable, objective insight that drives smarter decisions and stronger performance on an organization’s mission-critical priorities. We are a trusted advisor and an objective resource for close to 15,000 enterprises in approximately 90 countries and territories— across all major functions, in every industry and enterprise size.
In addition to salaries, these programs (which vary by country/region) include annual bonuses, stock awards, an employee stock purchase plan, 401(k) matching, healthcare and insurance benefits, tax savings programs, such as health and dependent care flexible spending accounts, health savings account and pretax commuter benefits, generous paid time off, paid parental leave, life and disability insurance, business travel accident insurance, charity matching, employee assistance programs, tuition assistance and on-site services, such as health centers and fitness centers, among others.
In addition to salaries, these programs (which vary by country/region) include annual bonuses, stock awards, an employee stock purchase plan, 401(k) matching, healthcare and insurance benefits, tax savings programs, such as health and dependent care flexible spending accounts, health savings account and pretax commuter benefits, generous paid time off, paid parental leave, life and disability insurance, business travel accident insurance, charity matching, employee assistance programs, tuition assistance and on-site services, such as fitness centers, among others.
Our DEI Executive Council, composed of our CEO, Chief Human Resources Officer, CFO, General Counsel, head of DEI, and other selected leaders, drives diversity, equity and inclusion as an imperative at all levels of the organization. In addition, the DEI Center of Excellence operationalizes strategy and establishes goals against key metrics to drive greater transparency and accountability.
Our DEI 5 Executive Council, composed of our CEO, Chief Human Resources Officer, CFO, General Counsel, head of DEI, and other selected leaders, drives diversity, equity and inclusion as an imperative at all levels of the organization. In addition, the DEI Center of Excellence operationalizes strategy and establishes goals against key metrics to drive greater transparency and accountability.
Through custom analysis and on-the-ground support we enable optimized technology investments and stronger performance on our clients’ mission critical priorities. The fiscal year of Gartner is the twelve-month period from January 1 through December 31. All references to 2022, 2021 and 2020 herein refer to the fiscal year unless otherwise indicated.
Through custom analysis and on-the-ground support we enable optimized technology investments and stronger performance on our clients’ mission critical priorities. The fiscal year of Gartner is the twelve-month period from January 1 through December 31. All references to 2023, 2022 and 2021 herein refer to the fiscal year unless otherwise indicated.
Gartner delivers independent, objective advice to leaders across an enterprise through subscription services that include on-demand access to published research content, data and benchmarks, and direct access to a network of approximately 2,500 research experts located around the globe. Gartner research is the fundamental building block for all Gartner products and services.
Gartner delivers independent, objective insight to leaders across an enterprise through subscription services that include on-demand access to published research content, data and benchmarks, and direct access to a network of approximately 2,500 research experts located around the globe. Gartner research is the fundamental building block for all Gartner products and services.
A substantial portion of our revenue is derived from sales outside of the United States. • Insight that creates connections - Our global community of experts, analysts and peers help provide the deep relationships that help clients stay ahead of the curve. • Experienced management team - Our management team is comprised of research veterans and experienced industry executives with long tenure at Gartner. • Substantial operating leverage in our business model - We can distribute our intellectual property and expertise across multiple platforms, including research and advisory subscription and membership programs, conferences and consulting engagements, to derive incremental revenue and profitability. • Vast network of research experts and consultants - As of December 31, 2022, we had approximately 2,500 research experts and 880 experienced consultants located around the world.
A substantial portion of our revenue is derived from sales outside of the United States. • Insight that creates connections - Our global community of experts, analysts and peers help provide the deep relationships that help clients stay ahead of the curve. • Experienced management team - Our management team is comprised of research veterans and experienced industry executives with long tenure at Gartner. • Substantial operating leverage in our business model - We can distribute our intellectual property and expertise across multiple platforms, including research and advisory subscription and membership programs, conferences and consulting engagements, to derive incremental revenue and profitability. • Vast network of research experts and consultants - As of December 31, 2023, we had approximately 2,500 research experts and 950 experienced consultants located around the world.
Since our Sales and Research & Advisory teams make up approximately 50% of total employees worldwide, we also have formal, dedicated programs to help train and onboard new hires as well as more experienced managers and leaders within Sales and Research & Advisory.
Since our Sales and Research & Advisory teams make up approximately 45% of total employees worldwide, we also have formal, dedicated programs to help train and onboard new hires as well as more experienced managers and leaders within Sales and Research & Advisory.
HUMAN CAPITAL MANAGEMENT We believe our people are our most valuable asset, enabling our long track record of global growth. From attracting diverse talent through our recruitment process, to cultivating that talent with learning and development opportunities and rewards for strong performers, to supporting overall wellness with meaningful benefits and engagement, we strive to put our people first.
HUMAN CAPITAL MANAGEMENT We believe our people are our most valuable asset, enabling our sustained track record of growth. From attracting diverse talent through our recruitment process, to cultivating that talent with learning and development opportunities and rewards for strong performers, to supporting overall wellness with meaningful benefits and engagement, we strive to put our people first.
We typically have a minimum contract period of twelve months for our research and advisory subscription contracts and, at December 31, 2022, over 70% of our contracts were multi-year. • CONFERENCES.
We typically have a minimum contract period of twelve months for our research and advisory subscription contracts and, at December 31, 2023, over 70% of our contracts were multi-year. • CONFERENCES.
Our research agenda is defined by clients’ needs, focusing on the critical issues, opportunities and challenges they face every day. We are in steady contact with more than 15,000 distinct client enterprises worldwide. We publish tens of thousands of pages of original research annually, and our research experts had more than 460,000 direct client interactions in 2022.
Our research agenda is defined by clients’ needs, focusing on the critical issues, opportunities and challenges they face every day. We are in steady contact with close to 15,000 distinct client enterprises worldwide. We publish tens of thousands of pages of original research annually, and our research experts had more than 490,000 direct client interactions in 2023.
In addition, during 2022 we hosted 350+ peer networking meetings, and through the Evanta brand we hosted 350+ exclusive C-level meetings with close to 200 in-person. • CONSULTING. Through its experienced consultants, Gartner Consulting serves chief information officers and other senior executives who are driving technology-related strategic initiatives to optimize technology investments and drive business impact.
In addition, during 2023 we hosted 300+ peer networking meetings, and through the Evanta brand we hosted 350+ exclusive C-level meetings with more than 200 in-person. • CONSULTING. Through its experienced consultants, Gartner Consulting serves chief information officers and other senior executives who are driving technology-related strategic initiatives to optimize technology investments and drive business impact.
In addition to helping employees unlock their full potential through mechanisms like continuous feedback and performance appraisals, we have dedicated programs designed to develop effective leaders. We also offer rotational programs and an online learning experience platform for employees called GartnerYou. In 2022, GartnerYou offered more than 46,000 learning resources, with over 400,000 completions globally.
In addition to helping employees unlock their full potential through mechanisms like continuous feedback and performance appraisals, we have dedicated programs designed to develop effective leaders. We also offer rotational programs and an online learning experience platform for employees called GartnerYou. In 2023, GartnerYou offered approximately 39,000 learning resources, with over 375,000 completions globally.
We believe the greatest catalyst to engagement comes from leadership — particularly their efforts to set direction, allocate resources, and build individual and organizational capability. We embed our associate survey efforts within our business units so that the insight we glean can help leaders understand the opportunities for effecting organizational growth.
We believe the greatest catalyst to engagement comes from leadership — particularly their efforts to set direction, allocate resources, and build individual and organizational capability. We embed our associate survey efforts across the enterprise so that the insight we glean can help leaders at various levels understand the opportunities for effecting organizational growth.
In 2022, we expanded the program, and more than 3,100 sales associates participated. Through these programs, we believe our teams develop role-specific knowledge and skills, increase productivity and improve performance. We also strive to develop an inclusive and engaging environment that makes Gartner a vibrant, exciting place to work.
In 2023 more than 6,500 sales associates participated. Through these programs, we believe our teams develop role-specific knowledge and skills, increase productivity and improve performance. We also strive to develop an inclusive and engaging environment that makes Gartner a vibrant, exciting place to work.
In addition to role-specific summits and workshop-style seminars, Gartner hosts the Gartner Symposium/Xpo series, including its unique, flagship IT Symposium/Xpo ® , which is held at several locations worldwide annually. During 2022, Gartner successfully held 25 in-person and 16 virtual conferences with more than 60,000 attendees, including eight Symposiums/Xpos.
In addition to role-specific summits and workshop-style seminars, Gartner hosts the Gartner Symposium/Xpo series, including its unique, flagship IT Symposium/Xpo ® , which is held at several locations worldwide annually. During 2023, Gartner successfully held 47 in-person conferences with more than 75,500 attendees, including eight Symposiums/Xpos.
We also provide a number of free mental and behavioral health resources, including access to the Employee Assistance Program for employees and their dependents. Talent Development, Retention and Training Gartner aims to foster a culture of lifelong learning, getting feedback and evolving.
We also provide a number of free mental and behavioral health resources, including access to the Employee Assistance Program for employees and their dependents. We believe our total rewards programs facilitate associate retention and also encourage high performance. Talent Development, Retention and Training Gartner aims to foster a culture of lifelong learning, getting feedback and evolving.
Research equips executives and their teams from every function and across all industries with actionable, objective insight, guidance and tools. Our experienced experts deliver all this value informed by a combination of practitioner-sourced and data-driven research to help our clients address their mission critical priorities. Conferences provides executives and teams across an organization the opportunity to learn, share and network.
Our experienced experts deliver all this value informed by a combination of practitioner-sourced and data-driven research to help our clients address their mission critical priorities. Conferences provides executives and teams across an organization the opportunity to learn, share and network.
In 2021, Gartner transformed how we onboard new sales hires so they more quickly develop the core competencies tied to sales success. Rooted in learning and development best practices, the reimagined program operates in a scalable model that provides new sales hires in their first year with access to as many as 2,100 well-paced, just-in-time learning assets.
In 2023, Gartner continued to transform and refine how we onboard new sales associates, so they more quickly develop the core competencies tied to sales success. Rooted in learning and development best practices, the refined training program operates in a scalable model that provides new sales associates in their first year with access to approximately 2,800 well-paced, just-in-time learning assets.
At December 31, 2022, we had approximately 19,500 employees globally, approximately 9,110 of which were outside of the U.S., and the overwhelming majority of our employees were full time. Gartner is committed to providing equal employment opportunities to all applicants and employees without regard to any legally protected status.
At December 31, 2023, we had 20,237 employees globally, 9,514 of which were outside of the U.S., and the overwhelming majority of our employees were full time. Gartner is committed to providing equal employment opportunities to all applicants and employees without regard to any legally protected status. This commitment is formalized in our global and U.S. equal employment opportunity policies.
We encourage you to review our Corporate Responsibility Report located on our website at gartner.com , under the “Corporate Responsibilities” link in the “About” tab for more detailed information regarding our Human Capital programs and initiatives.
Additionally, we introduced a sustainability training module available to all associates interested in learning more about Gartner’s sustainability efforts. We encourage you to review our Corporate Responsibility Report located on our website at gartner.com , under the “Corporate Responsibility” link in the “About” tab for more detailed information regarding our Human Capital programs and initiatives.
While we experienced a decrease in associate turnover in 2022, our average employee tenure decreased from 5.1 years in 2021 to 4.5 years in 2022, primarily due to increased new hires in 2022. 6 Our Communities and the Environment Our associates have a long history of individual and team volunteering. Gartner facilitates a charity match program.
Our average tenure increased slightly from 4.5 years 6 in 2022 to 5.0 years, primarily due to a decrease in associate turnover and a heavy focus on growth through Gartner internal mobility initiatives. Our Communities and the Environment Our associates have a long history of individual and team volunteering. Gartner facilitates a charity match program.
We emphasize the importance of inclusion to leaders and managers and the value of fostering a sense of belonging within their teams. We also continue to invest in learning opportunities to develop DEI at Gartner.
We emphasize the importance of inclusion to leaders and managers and the value of fostering a sense of belonging within their teams. We continue to invest in learning opportunities to develop DEI at Gartner through training modules on important topics such as bias, empathy, equity, equality and individual identity.
As of December 31, 2022, approximately 47% of our employees worldwide identified as female and 24% of employees in the U.S. identified as racially or ethnically diverse. On a worldwide basis, our employees were represented by more than 85 self-identified nationalities working in 38 different countries and territories.
As of December 31, 2023, approximately 47% of our employees worldwide identified as female and 24% of employees in the U.S. identified as racially or ethnically diverse. Our employees work in 39 different countries and territories. As we continue to invest in employee self-identification and reporting efforts, we determined our employees were represented by more than 130 self-identified nationalities.
Our human capital management strategies are developed by executive management and overseen by the Compensation Committee of our Board of Directors. Diversity, Equity and Inclusion Gartner is committed to creating a culture of inclusion - which is critical to the objectivity and independence we provide our clients. We celebrate diversity of thought and we welcome and encourage diverse perspectives.
Diversity, Equity and Inclusion Gartner is committed to creating a culture of inclusion - which is critical to the objectivity and independence we provide our clients. We celebrate diversity of thought and we welcome and encourage diverse perspectives. We embed Diversity, Equity and Inclusion (“DEI”) concepts into our culture and our critical people processes.
In 2022, over 5,300 Gartner associates were members of at least one ERG. Health, Safety and Compensation We seek to invest in meaningful, innovative and inclusive compensation and benefit programs that support physical, financial and emotional well-being of our employees.
Total Rewards We seek to invest in meaningful, innovative and inclusive compensation and benefit programs that support physical, financial and emotional well-being of our employees.
This commitment is formalized in our global and U.S. equal employment opportunity policies. We continually renew this commitment by seeking to optimize our recruitment and professional development processes, create networking and educational opportunities, celebrate heritage and history, celebrate community service, and create safe spaces for all employees.
We continually renew this commitment by seeking to optimize our recruitment and professional development processes, create networking and educational opportunities, celebrate heritage and history, celebrate community service, and create safe spaces for all employees. Our human capital management strategies are developed by executive management and overseen by the Compensation Committee of our Board of Directors.
In 2022, over 19% of associates made matched donations to more than 3,600 nonprofits, amounting to over $7.1 million donated by Gartner and its associates. In 2022, Gartner associates also logged approximately 24,300 hours supporting over 580 nonprofit organizations around the world.
In 2023, over 17% of associates made matched donations to more than 4,100 nonprofits, amounting to over $7.6 million donated by Gartner and its associates. In 2023, Gartner associates also logged approximately 15,000 volunteer hours supporting communities around the world. Finally, in 2023, the Science Based Targets initiative validated our near-term emissions targets.
The Company supports a number of employee-driven Employee Resource Groups (“ERGs”) that bring employees together to foster a diverse, inclusive and supportive workplace. Gartner currently has six formal ERGs supporting underrepresented racial, ethnic and multicultural backgrounds, women, the LGBTQ+ community, veterans and employees with disabilities. Participation in ERGs is voluntary and open to all employees.
Gartner currently has seven formal ERGs supporting underrepresented racial, ethnic and multicultural backgrounds, women, the LGBTQ+ community, veterans, and people with disabilities. Participation in ERGs is voluntary and open to all employees. In 2023, over 6,000 Gartner associates were members of at least one ERG.
Business-unit-specific survey results are used for a number of leader-specific interventions, from individualized coaching to team-based skill-building to business-unit-wide initiatives targeting key areas of engagement.
Survey results are used for a number of enterprise-wide and business-unit-specific initiatives targeting key areas of engagement and retention, such as leadership effectiveness, career development, business process improvement, and more. In 2023, associate turnover continued to decrease as compared with the prior year.
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ITEM 1. BUSINESS. GENERAL 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.
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Gartner delivers its products and services globally through three business segments – Research, Conferences and Consulting, as described below. Research equips executives and their teams from every function and across all industries with actionable, objective insight, guidance and tools.
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We embed Diversity, Equity and Inclusion (“DEI”) concepts into our culture and our critical people processes. Our DEI efforts are all about building the confidence and conviction in all of our associates – but particularly in our leaders - to do the right things and building a 5 language of inclusion to foster this.
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Our vision is to help build a high-performing organization with a culture of equity and inclusion, enabling Gartner to guide the leaders who shape the world.
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For example, in addition to our popular Embracing Diversity & Being Inclusive training module, which covers the importance of diversity and inclusion at Gartner and the role of unconscious bias, we added a new module this year called Equity vs. Equality, which focuses on fostering a more equitable workplace.
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Our learning resources provide Gartner associates with awareness and clarity of expectations, equip managers with knowledge and skills to lead inclusively and support team effectiveness, inclusion and belonging. The Company supports a number of employee-driven Employee Resource Groups (“ERGs”) that bring employees together to foster a diverse, inclusive and supportive workplace.
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We believe that our equity grants facilitate retention as well as encourage performance of key personnel. We operate under a hybrid virtual-first working arrangement, which provides additional flexibility to employees, enabling most of our employees to work remotely a substantial portion of the time.
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Gartner's commitment is to achieve net-zero greenhouse gas emissions by 2035 in accordance with the Science Based Targets initiative’s Net-Zero Standard. We provide associates an opportunity to engage on environmental sustainability topics and help advance our Net-Zero strategy through the Gartner Green Team, a voluntary, associate-driven group. In 2023, the Green Team had over 750 members.
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Finally, in 2022, we announced our commitment to achieve net-zero greenhouse gas emissions by 2035 in accordance with Science Based Target initiative’s (SBTi) Net-Zero Standard.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeConducting business in certain foreign jurisdictions may require accepting compromised protections or yielding of rights to technology, data or intellectual property rights in order to access those markets. Accordingly, we may not be able to protect our intellectual property against unauthorized or undesired third-party copying or use, which could adversely affect our competitive position.
Biggest changeAccordingly, we may not be able to protect our intellectual property against unauthorized or undesired third-party copying or use, which could adversely affect our competitive position. From time to time third parties have asserted, and may continue to assert, intellectual property claims that our products infringe the rights of others.
In addition to the effects of the global economic and geopolitical climate on our business and operations discussed in Item 7 of this Form 10-K and in the risk factors below, additional or unforeseen effects from the global economic and geopolitical climate may give rise to or amplify many of these risks discussed below.
In addition to the effects of the global economic and geopolitical climate on our business and operations discussed in Item 7 of this Form 10-K and in the risk factors below, additional or unforeseen effects from the global economic and geopolitical climate may give 7 rise to or amplify many of these risks discussed below.
Additionally, the security compliance landscape continues to evolve, requiring us to stay apprised of changes in cybersecurity laws, regulations, and security requirements required by our clients, such as the European Union General Data Protection Regulation (GDPR), the California Consumer Privacy Act (CCPA) and California Privacy Rights Act (CPRA), the Brazilian General Data Protection Law (LGPD), the Chinese Cybersecurity, Data Security and Personal Information Protection laws (and other new and proposed data protection laws), International Organization for Standardization (ISO), and National Institute of Standards and Technology (NIST).
Additionally, the security compliance landscape continues to evolve, requiring us to stay apprised of changes in cybersecurity and data privacy laws, regulations, and security requirements required by our clients, such as the European Union General Data Protection Regulation (GDPR), the California Consumer Privacy Act (CCPA) and California Privacy Rights Act (CPRA), the Brazilian General Data Protection Law (LGPD), the Chinese Cybersecurity, Data Security and Personal Information Protection laws (and other new and proposed data protection laws), International Organization for Standardization (ISO), and National Institute of Standards and Technology (NIST).
Moreover, while terminations by governments for lack of funding have not been significant historically, should appropriations for the various governments and agencies that contract with us be curtailed, or should our government contracts be terminated for convenience, we may experience a significant loss of revenues. We may not be able to maintain the equity in our brand name.
Moreover, while terminations by governments for lack of funding have not been significant historically, should appropriations for the various governments and agencies that contract with us be curtailed, or should our government contracts be terminated for convenience, we may experience a significant loss of revenues. 12 We may not be able to maintain the equity in our brand name.
Disruptive technologies, including in areas of artificial intelligence and machine learning, are rapidly changing the environment in which we, our clients, and our competitors operate and could affect the nature of how we generate revenue. We will need to continue to respond to and anticipate these changes by enhancing our product and service offerings to maintain our competitive position.
Disruptive technologies, including in areas of artificial intelligence (“AI”) and machine learning, are rapidly changing the environment in which we, our clients, and our competitors operate and could affect the nature of how we generate revenue. We will need to continue to respond to and anticipate these changes by enhancing our product and service offerings to maintain our competitive position.
Nonetheless, to maintain our competitive position, we must continue to anticipate the needs of our clients, develop, enhance and improve our existing products, as well as new products and services to address those needs, deliver all products and services in a timely, user-friendly and state of the art manner, and appropriately position and price new products and services relative to the marketplace and our costs of developing them.
Nonetheless, to maintain our competitive position, we must continue to anticipate the needs of our clients, develop, enhance, protect, and improve our existing products, as well as new products and services to address those needs, deliver all products and services in a timely, user-friendly and state of the art manner, and appropriately position and price new products and services relative to the marketplace and our costs of developing them.
Strategic and Operational Risks 7 We may not be able to maintain the quality of our existing products and services. We operate in a rapidly evolving market, and our success depends on our ability to deliver high quality and timely research and analysis to our clients.
Strategic and Operational Risks We may not be able to maintain the quality of our existing products and services. We operate in a rapidly evolving market, and our success depends on our ability to deliver high quality and timely research and analysis to our clients.
To date, none have resulted in any material adverse impact to our business, operations, products, services or customers. We have implemented various security controls to both meet our security obligations, while also defending against constantly evolving security threats.
To date, none have resulted in any material adverse impact to our business, operations, products, services or customers. We have implemented various security controls to meet our security obligations, while also defending against constantly evolving security threats.
Privacy concerns could damage our reputation and deter current and potential clients from using our products and services or attending our conferences. Concerns relating to global data privacy have the potential to damage our reputation and deter current and prospective clients from using our products and services or attending our conferences.
Concerns relating to global data privacy have the potential to damage our reputation and deter current and prospective clients from using our products and services or attending our conferences.
We rely on a combination of copyright, trademark, trade secret, patent, confidentiality, non-compete and other contractual provisions to protect our intellectual property rights. Despite our efforts to protect our intellectual property rights, unauthorized third parties may obtain and use technology or other information that we regard as proprietary.
We rely on a combination of copyright, trademark, trade secret, patent, confidentiality, non-compete and other contractual provisions to protect our intellectual property rights. Despite our efforts to protect our intellectual property rights, third parties may obtain unauthorized access to our intellectual property, technology or other information that we regard as proprietary.
In addition, acts of civil unrest, failure of critical infrastructure, terrorism, armed conflict, war (including the war in Ukraine), and abrupt political change, as well as responses by various governments and the international community to such acts, can have a negative effect on our business.
In addition, acts of civil unrest, failure of critical infrastructure, terrorism, armed conflict (including in the Middle East), war (including the war in Ukraine), and abrupt political change, as well as responses by various governments and the international community to such acts, can have a negative effect on our business.
Our failure to achieve them or continue practices that meet evolving stakeholder expectations in ESG could harm our reputation, adversely affect our ability to attract and retain employees or clients and expose us to increased scrutiny from investors and regulatory authorities.
Our failure to achieve them or continue practices that meet evolving, and sometimes conflicting, stakeholder expectations in ESG could harm our reputation, adversely affect our ability to attract and retain employees or clients and expose us to increased scrutiny from investors and regulatory authorities.
An inability to retain key personnel or to hire and train additional qualified personnel could materially adversely affect the quality of our products and services, as well as our future business and operating results or stock price.
An inability to retain key personnel or to hire and train additional qualified personnel could materially adversely affect the quality of our products and services, as well as our future business and operating results.
Any failure to continue to provide credible and reliable information and advice that is useful to our clients could have a material adverse effect on future business and operating results.
Any failure to continue to provide credible and reliable information and insight that is useful to our clients could have a material adverse effect on future business and operating results.
The risks involved in each acquisition or investment include the possibility of paying more than the value we derive from the acquisition, dilution of the interests of our current stockholders should we issue stock in the acquisition, decreased working capital, increased indebtedness, the assumption of undisclosed liabilities and unknown and unforeseen risks, the ability to retain key personnel of the acquired company, the inability to integrate the business of the acquired company, increase revenue or fully realize anticipated synergies, 11 the time to train the sales force to market and sell the products of the acquired business, the potential disruption of our ongoing business and the distraction of management from our day to day business.
The risks involved in each acquisition or investment include the possibility of paying more than the value we derive from the acquisition, dilution of the interests of our current stockholders should we issue stock in the acquisition, decreased working capital, increased indebtedness, the assumption of undisclosed liabilities and unknown and unforeseen risks, the ability to retain key personnel of the acquired company, the inability to complete the transaction due to regulatory review, the inability to integrate the business of the acquired company, increase revenue or fully realize anticipated synergies, the time to train the sales force to market and sell the products of the acquired business, the potential disruption of our ongoing business and the distraction of management from our day to day business.
In addition, continuously evolving data protection laws and regulations, such as the European Union General Data Protection Regulation (GDPR) and the decision in the Schrems II case, the California Consumer Privacy Act (CCPA) and California Privacy Rights Act (CPRA), the Brazilian General Data Protection Law (LGPD), the Chinese Cybersecurity, Data Security and Personal Information laws and other new and proposed data protection laws, pose increasingly complex compliance challenges.
In addition, continuously evolving data protection laws and regulations, such as the European Union General Data Protection Regulation (GDPR), the California Consumer Privacy Act (CCPA) and California Privacy Rights Act (CPRA), the Brazilian General Data Protection Law (LGPD), the Chinese Cybersecurity, Data Security and Personal Information laws and other new and proposed data protection laws, pose increasingly complex compliance challenges.
Any systems failure or compromise of our security that results in the disclosure of our users’ personal data could seriously limit the consumption of our products and services and the attendance at our conferences, as well as harm our reputation and brand and, therefore, our business. 10 We are exposed to risks related to cybersecurity.
Any system or process failure, or compromise of our security that results in the disclosure of our users’ personal data, could seriously limit the consumption of our products and services and the attendance at our conferences, as well as harm our reputation and brand and, therefore, our business. We are exposed to risks related to cybersecurity.
As of December 31, 2022, the Company had outstanding debt of $282 million under its 2020 term loan and revolving credit facility (the “2020 Credit Agreement”), $800 million of Senior Notes due 2028 (the “2028 Notes”), $600 million of Senior Notes due 2029 (the “2029 Notes”) and $800 million of Senior Notes due 2030 (the “2030 Notes”).
As of December 31, 2023, the Company had outstanding debt of $274 million under its 2020 term loan and revolving credit facility (the “2020 Credit Agreement”), $800 million of Senior Notes due 2028 (the “2028 Notes”), $600 million of Senior Notes due 2029 (the “2029 Notes”) and $800 million of Senior Notes due 2030 (the “2030 Notes”).
Moreover, increasing wage inflation may affect our profit margin as we strive to provide compensation packages that are competitive. We face risks related to global labor shortages, and competitive markets have increased attrition throughout our sector. Additionally, some of the personnel that we attempt to hire are subject to non-compete agreements that could impede our short-term recruitment efforts.
Moreover, increasing wage inflation may affect our profit margin as we strive to provide compensation packages that are competitive. We face risks related to global and industry-specific labor shortages, and competitive markets can increase attrition throughout our sector. Additionally, some of the personnel that we attempt to hire are subject to non-compete agreements that could impede our short-term recruitment efforts.
However, we may not be successful in responding to these forces and enhancing our product and service offerings on a timely basis, and any enhancements we develop may not adequately address the changing needs of our clients.
However, we may not be successful in responding to these forces and enhancing our product and service offerings on a timely basis or in a cost-efficient manner, and any enhancements we develop may not adequately address the changing needs of our clients.
The insurer has contested our right to reinstate the limits and to use reinstated limits to cover losses resulting from conferences cancelled due to COVID-19.
However, the insurer has contested our right to reinstate the limits and use the reinstated limits to cover additional losses resulting from 2020 conferences cancelled due to COVID-19.
A large portion of our success depends on our ability to generate renewals of our subscription-based research products and services and new sales of such products and services, both to new clients and existing clients. These products and services constituted approximately 76% and 79% of total revenues from our on-going operations for 2022 and 2021, respectively.
A large portion of our success depends on our ability to generate renewals of our subscription-based research products and services and new sales of such products and services, both to new clients and existing clients. These products and services constituted approximately 76% of total revenues from our operations for both 2023 and 2022.
Risks in this section are grouped in the following categories: (1) strategic and operational risks; (2) macroeconomic and industry risks; (3) legal and regulatory risks; and (4) risks related to our Common Stock. Many risks affect more than one category, and the risks are not in order of significance or probability of occurrence because they have been grouped by categories.
Risks in this section are grouped in the following categories: (1) strategic and operational risks; (2) macroeconomic and industry risks; and (3) legal and regulatory risks. Many risks affect more than one category, and the risks are not in order of significance or probability of occurrence because they have been grouped by categories.
While our Research client retention rate was 86% for both 2022 and 2021, there can be no guarantee that we will continue to maintain this rate of client renewals. The profitability and success of our conferences and other meetings are subject to external factors beyond our control.
While our Research client retention rate was 84% and 86.3% for 2023 and 2022, respectively, there can be no guarantee that we will continue to maintain this rate of client renewals. The profitability and success of our conferences and other meetings are subject to external factors beyond our control.
At December 31, 2022 and 2021, approximately $932 million and $790 million, respectively, of our outstanding revenue contracts were attributable to government entities. Our U.S. government contracts are subject to the approval of appropriations by the U.S. Congress to fund the agencies contracting for our services.
At December 31, 2023 and 2022, approximately $1.0 billion and $932 million, respectively, of our outstanding revenue contracts were attributable to government entities. Our U.S. government contracts are subject to the approval of appropriations by the U.S. Congress to fund the agencies contracting for our services.
Additionally, any material breaches of cybersecurity or other technology-related catastrophe, or media reports of perceived security vulnerabilities to our systems or those of our third parties, even if no breach has been attempted or occurred, could cause us to experience reputational harm, loss of customers and revenue, fines, regulatory actions and scrutiny, sanctions or other statutory penalties, litigation, liability for failure to safeguard our customers’ information, or financial losses that are either not insured against or not fully covered through any insurance maintained by us.
Additionally, any material breaches of cybersecurity or other technology-related catastrophe, or media reports of perceived security vulnerabilities to our systems or those of our third parties, even if no breach has been attempted or occurred, could cause us to experience reputational harm, loss of customers and revenue, fines, regulatory actions and scrutiny, sanctions or other statutory penalties, litigation, liability for failure to safeguard our customers’ information, or financial losses that are either not insured against or not fully covered through any insurance maintained by us. 11 Any of the foregoing may have a material adverse effect on our business, operating results and financial condition.
However, any inefficiencies or operational failures could diminish the quality of our products, services, and user experience, resulting in damage to our reputation and loss of current and potential users, subscribers, and advertisers, potentially harming our financial condition and operating results. We have grown, and may continue to grow, through acquisitions and strategic investments, which could involve substantial risks.
However, any inefficiencies or operational failures could diminish the quality of our products, services, and user experience, resulting in damage to our reputation and loss of current and potential users, subscribers, and advertisers, potentially harming our financial condition and operating results. Our acquisitions, dispositions, and strategic investments, involve substantial risks.
Changing market dynamics, global policy developments, and the increasing frequency and impact of extreme weather events on critical infrastructure in the U.S. and elsewhere have the potential to disrupt our business, the business of our vendors, and the business clients, and may cause us to experience higher attrition, losses and additional costs to maintain or resume operations. 14 Failure to achieve ESG commitments or meet stakeholder expectations in ESG could harm our reputation .
Changing market dynamics, global policy developments, and the increasing frequency and impact of extreme weather events on critical infrastructure in the U.S. and elsewhere have the potential to disrupt our business, the business of our vendors, and the business clients, and may cause us to experience higher attrition, losses and additional costs to maintain or resume operations.
Additionally, tariffs, trade barriers and restrictions, and other acts by governments to protect domestic markets or to retaliate against the trade tariffs and restrictions of other nations could negatively affect our business operations.
Additionally, tariffs, trade barriers 13 and restrictions, and other acts by governments to protect domestic markets or to retaliate against the trade tariffs and restrictions of other nations could negatively affect our business operations. Our operating results could be negatively impacted by global economic conditions.
Gartner is also seeking $150 million in initial limits for events cancelled in 2021 and to reinstate those limits up to an additional $150 million. In 2022, Gartner also commenced litigation against the insurance broker who negotiated and procured our event cancellation insurance.
Gartner is also seeking $150 million in initial limits for events cancelled in 2021 and to reinstate those limits up to an additional $150 million. We are also the plaintiff in litigation with the insurance broker that negotiated and procured our event cancellation insurance.
The outstanding debt may limit the 12 amount of cash or additional credit available to us, which could restrain our ability to expand or enhance products and services, respond to competitive pressures or pursue future business opportunities requiring substantial investments of additional capital.
The outstanding debt may limit the amount of cash or additional credit available to us, which could restrain our ability to expand or enhance products and services, respond to competitive pressures or pursue future business opportunities requiring substantial investments of additional capital. We may require additional cash resources which may not be available on favorable terms or at all.
Furthermore, we will not be successful if we cannot compete effectively on quality of research and analysis, timely delivery of information, customer service, the ability to offer products to meet changing market needs for information and analysis, or price.
Furthermore, we will not be successful if we cannot compete effectively on quality of research and analysis, timely delivery of information, customer service, the ability to offer products to meet changing market needs for information and analysis, or price. We are exposed to volatility in foreign currency exchange rates from our international operations.
Corporate tax reform, base-erosion efforts and tax transparency continue to be high priorities in many countries. Tax reform legislation is being proposed or enacted in a number of jurisdictions where we do business. The Organization for Economic Co-operation and Development (“the OECD”) has issued various proposals that would change long-standing global tax principles.
Corporate tax reform, base-erosion efforts and tax transparency continue to be high priorities in many countries. The Organization for Economic Co-operation and Development (“the OECD”) has issued various proposals that would change long-standing global tax principles.
Our ability to replace consulting engagements is subject to numerous factors, including the following: • delivering consistent, high-quality consulting services to our clients; • tailoring our consulting services to the changing needs of our clients; and • our ability to match the skills and competencies of our consulting staff to the skills required for the fulfillment of existing or potential consulting engagements. 9 A material decline in our ability to replace consulting engagements will have an adverse impact on our revenues and our financial condition.
Our ability to replace consulting engagements is subject to numerous factors, including the following: • delivering consistent, high-quality consulting services to our clients; • tailoring our consulting services to the changing needs of our clients; and • our ability to match the skills and competencies of our consulting staff to the skills required for the fulfillment of existing or potential consulting engagements.
Gartner's two-year event cancellation policy also covered events that were planned for 2021 but cancelled, with limits of $150 million with the right to reinstate up to that amount one time if the initial limits are inadequate. The insurer has contested all coverage for events cancelled in 2021 due to COVID-19.
Gartner's two-year event cancellation policy also covered events that were planned for 2021 but cancelled, with limits of $150 million with the right to reinstate up to that amount if the initial limits are inadequate to cover the loss.
These proposals include a two-pillar approach to global taxation (BEPS 2.0/ Pillar Two), focusing on global profit allocation and a global minimum tax rate. On December 12, 2022, the European Union member states agreed to implement the OECD’s global corporate minimum tax rate of 15%, to be effective as of January 2024.
These proposals include a two-pillar approach to global taxation (BEPS 2.0/ Pillar Two), focusing on global profit allocation and a 15% global corporate minimum tax rate. In December 2022, the European Union adopted a directive requiring member states to incorporate similar provisions into their domestic laws, to be effective as of January 2024 and January 2025.
If our existing financial resources are insufficient to satisfy our requirements, we may seek additional borrowings or issue debt. Prevailing credit and debt market conditions may negatively affect debt availability and cost, and, as a result, financing may not be available in amounts or on terms acceptable to us, if at all.
Prevailing credit and debt market conditions may negatively affect debt availability and cost, and, as a result, financing may not be available in amounts or on terms acceptable to us, if at all.
Any of the foregoing may have a material adverse effect on our business, operating results and financial condition. We may experience outages and disruptions of our online services if we fail to maintain an adequate operations infrastructure. Our increasing user traffic and complexity of our products and services demand more computing power.
We may experience outages and disruptions of our online services if we fail to maintain an adequate operations infrastructure. Our increasing user traffic and complexity of our products and services demand more computing power.
The market for highly skilled workers and leaders in our industry is extremely competitive. We face competition for qualified professionals from, among others, technology companies, market research firms, consulting firms, financial services companies and electronic and print media companies, some of which have a greater ability to attract and compensate these professionals.
We face competition for qualified professionals from, among others, technology companies, market research firms, consulting firms, financial services companies and electronic and print media companies, some of which have significant financial resources and a willingness to deploy those resources to attract and compensate these professionals.
We may require additional cash resources which may not be available on favorable terms or at all. We may require additional cash resources due to changed business conditions, implementation of our strategy and stock repurchase program, to repay indebtedness or to pursue future business opportunities requiring substantial investments of additional capital, including acquisitions.
We may require additional cash resources due to changed business conditions, implementation of our strategy and stock repurchase program, to repay indebtedness or to pursue future business opportunities requiring substantial investments of additional capital, including acquisitions. If our existing financial resources are insufficient to satisfy our requirements, we may seek additional borrowings or issue debt.
Our ability to maintain contract renewals is subject to numerous factors, including the following: • delivering high-quality and timely analysis and advice to our clients; • understanding and anticipating market trends and the changing needs of our clients; and • providing products and services of the quality and timeliness necessary to withstand competition. 8 Additionally, as we continue to adjust our products and service offerings to meet our clients’ continuing needs, we may shift the type and pricing of our products which may impact client renewal rates.
Our ability to maintain contract renewals is subject to numerous factors, including the following: • delivering high-quality and timely analysis and insight to our clients; • understanding and anticipating market trends and the changing needs of our clients; and • providing products and services of the quality and timeliness necessary to withstand competition.
A downturn in growth could negatively and materially affect future demand for our products and services in general, in certain geographic regions, in particular countries, or industry sectors, or could reduce demand for our in-person conferences.
The World Bank notes that the expected growth rates for 2024 and 2025 would be far below the 3.1% average of the 2010s. A downturn in growth could negatively and materially affect future demand for our products and services in general, in certain geographic regions, in particular countries, or industry sectors, or could reduce demand for our in-person conferences.
We have large offices in Connecticut, Florida, India, the United Kingdom, Spain and Australia, and other locations that are vulnerable to climate change effects.
We have large offices in Connecticut, Florida, India, the United Kingdom, Spain and Australia, and other locations that are vulnerable to climate change effects. Additionally, scarcity of fuel and/or rising green energy costs may increase our operations costs or affect client travel to our Conferences.
Additionally, the long-term impact of responses to COVID-19 on leased office space availability and rental costs of leased office space is not yet known. To accommodate our growth going forward, we have moved to a global hoteling model to better manage our footprint and operating expenses, and will secure new space when the opportunities and need arise.
To accommodate our growth going forward, we have moved to a global hoteling model to better manage our footprint and operating expenses, and will secure new space when the opportunities and needs arise.
When the period expires relating to their particular restrictions, former employees may compete against us. If a former employee violates the provisions of the restrictive covenant agreement, we seek to enforce the restrictions but there is no assurance that we will be successful in our efforts.
If a former employee violates the provisions of the restrictive covenant agreement, we seek to enforce the restrictions but there is no assurance that we will be successful in our efforts, and enforceability of certain restrictive covenants may decrease significantly 10 due to recent regulatory scrutiny in the U.S.
Consulting segment revenues constituted approximately 9% of total revenues from our on-going operations in both 2022 and 2021. Consulting engagements typically are project-based and non-recurring. In addition, revenue from our contract optimization business can fluctuate significantly from period to period and is not predictable.
Our Consulting business depends on non-recurring engagements and our failure to secure new engagements could lead to a decrease in our revenues. Consulting segment revenues constituted approximately 9% of total revenues from our on-going operations in both 2023 and 2022. Consulting engagements typically are project-based and non-recurring.
In parallel, we commenced an internal investigation regarding this matter. We voluntarily disclosed the matter to the SEC and Department of Justice (DOJ) in November 2018. Since that time, we have cooperated fully with their review, and we are working toward a resolution.
In parallel, we commenced an internal investigation regarding this matter. We voluntarily disclosed the matter to the SEC and Department of Justice (DOJ) in November 2018 and cooperated fully with their review. In May 2023, Gartner entered into a settlement agreement with the SEC, without admitting or denying the SEC’s allegations, which fully resolved this matter.
In Arlington, we have consolidated all our businesses into a single building and have sublet substantially all of the excess space in our other properties. Through our real estate consolidations and other related activities, we seek to secure quality subtenants with appropriate sublease terms.
Through our real estate consolidations and other related activities, we seek to secure quality subtenants with appropriate sublease terms.
Our intellectual property rights may not survive a legal challenge to their validity or provide significant protection for us. The laws and enforcement mechanisms of certain countries, particularly in emerging markets, do not protect our proprietary rights to the same extent as the laws of the United States.
Further, the laws and enforcement mechanisms of certain countries, particularly in emerging markets, do not protect our proprietary rights to the same extent as the laws of the United States. Conducting business in certain foreign jurisdictions may require accepting compromised protections or yielding of rights to technology, data or intellectual property in order to access those markets.
We may not be able to attract and retain qualified personnel which could jeopardize the quality of our products and services and our future growth plans. Our success is based on attracting and retaining talented employees and we depend heavily upon the quality of our senior management, research analysts, consultants, sales and other key personnel.
Our success is based on attracting and retaining talented employees and we depend heavily upon the quality of our senior management, research analysts, consultants, sales and other key personnel. The market for highly skilled workers and leaders in our industry is extremely competitive.
Additionally, there can be no assurance that another party will not assert that we have infringed its intellectual property rights. Our employees are subject to restrictive covenant agreements (which include provisions related to employees’ ability to compete and solicit customers and employees) and assignment of invention agreements, to the extent permitted under applicable law.
Additionally, our employees are subject to restrictive covenant agreements (which include provisions related to employees’ ability to compete and solicit customers and employees) and assignment of invention agreements, to the extent permitted under applicable law. When the period expires relating to their particular restrictions, former employees may compete against us.
In addition, effective succession planning is important to our long-term success, and failure to ensure effective transfer of knowledge and smooth transitions involving key employees could hinder our strategic planning and execution. Additionally, as a result of the COVID-19 pandemic, the vast majority of our employees transitioned to working from home.
In addition, effective succession planning is important to our long-term success, and failure to ensure effective transfer of knowledge and smooth transitions involving key employees could hinder our strategic planning and execution. If we are unable to enforce and protect our intellectual property rights, our competitive position may be harmed.
As a result of transitioning to a virtual-first hybrid, remote-work environment, most of our employees are working remotely, which magnifies the importance of the integrity of our remote access security measures.
As a result of operating in a hybrid work environment, most of our employees are working virtually for a period of time, which magnifies the importance of the integrity of our remote access security measures. Cyber criminals use artificial intelligence tools to increase the effectiveness, speed and complexity of attacks, requiring increased vigilance and threat defense.
Our event cancellation insurance, including a two-year policy covering destination conferences during 2020 and 2021 and a policy covering Evanta conferences during 2020, provided up to $170 million in coverage for 2020 cancellations with the right to reinstate the policy limits one time if those limits are utilized.
Our event cancellation insurance included a two-year policy covering destination conferences during 2020 and 2021 and a policy covering Evanta conferences during 2020.
We have committed to achieve net-zero greenhouse gas emissions by 2035 in accordance with the SBTi's Net-Zero Standard. Our ability to achieve this and other ESG goals is subject to numerous risks outside of our control.
Failure to achieve ESG commitments or meet stakeholder expectations in ESG could harm our reputation . We have committed to achieve net-zero greenhouse gas emissions by 2035 in accordance with the SBTi's Net-Zero Standard. The SBTi has 14 approved Gartner’s near-term science-based emissions reductions targets.
The realization of any of these risks could adversely affect our business. Additionally, we face competition in identifying acquisition targets and consummating acquisitions. We face risks related to leased office space. We assumed a significant amount of leased office space, in particular in Arlington, Virginia, in connection with the acquisition of CEB Inc. in 2017.
The realization of any of these risks could adversely affect our business. We face risks related to leased office space. We lease all the properties used for our ongoing business operations. In several locations, we have consolidated our operations and sublet substantially all the excess space.
In its lawsuit against the insurer, Gartner is seeking to reinstate and recover up to an additional $20 million for cancelled 2020 Evanta meetings and to reinstate and recover up to an additional $150 million in losses from cancelled 2020 destination conferences.
We are the plaintiff in litigation with the insurer and are seeking to reinstate the policy limits pursuant to the policies’ reinstatements of limits clause and recover up to an additional $170 million for events cancelled in 2020.
Removed
Our Conferences business constituted approximately 7% and 5% of total revenues from our on-going operations in 2022 and 2021, respectively. As a result of the COVID-19 pandemic, we cancelled in-person conferences scheduled for 2020 beginning in late February/early March 2020. We began holding virtual conferences during the second half of 2020.
Added
Similarly, some of our content is exposed to the datasets leveraged by AI chatbots, and these chatbots may provide substantive content, either with or without contribution, in query responses to users which could reduce the need to enter our websites.
Removed
These virtual conferences resulted in significantly less revenue and gross contribution, but we believe aided in client retention and engagement. We had planned in-person conferences for 2021, but cancelled those conferences due to the ongoing pandemic.
Added
Uncertainty in the development, deployment, and use of AI in our platform and products and by our customers and competitors may result in harm to our business and reputation. We use, and may expand our use of, machine learning and AI technologies in some of our products, services, and processes.
Removed
We re-launched in-person destination conferences during the second quarter of 2022 and expect to focus on in-person destination conferences in future periods as conditions permit.
Added
Developing, testing, and deploying AI systems will require additional investment and increase our costs. If we fail to keep pace with rapidly evolving AI technological developments, our competitive position and business results may be negatively impacted.
Removed
Although we have returned to offering some in-person conferences, our Conferences revenues may continue to be negatively impacted if in-person conferences are not permitted to be held in the jurisdictions of the conference venues, if client policies prohibit or restrict business travel or if there are public health concerns for attendees, exhibitors or our employees.
Added
Moreover, the development, adoption, and use of generative AI technologies are still in their early stages, and ineffective or inadequate AI development or deployment practices by Gartner or third-party developers or vendors could result in unintended consequences. For example, AI algorithms that we use may be flawed or may be based on datasets that are biased or insufficient.
Removed
We are in litigation with the insurer on these issues. In 2021, we received $166.9 million of insurance proceeds related to 2020 event cancellation claims and recorded a gain of $152.3 million . We received an additional $3.1 million related to 2020 event cancellation insurance claims in February 2023.
Added
Third parties may also be able to use AI to create technology that could reduce demand for our products. Although prohibited, clients or others may load our proprietary information into large language models, which could reduce the value of our offerings.
Removed
It is difficult to predict how long it will take to resolve these lawsuits and the resolution could affect our financial results. Our insurance coverage for 2022 (and likely beyond) excludes coverage for cancellations due to communicable diseases. Our Consulting business depends on non-recurring engagements and our failure to secure new engagements could lead to a decrease in our revenues.
Added
In addition, the introduction of AI technologies, particularly generative AI, into new or existing offerings may result in new or expanded risks and liabilities, due to enhanced 8 governmental or regulatory scrutiny, litigation, compliance issues, ethical concerns, confidentiality, data privacy or security risks, as well as other factors that could adversely affect our business, reputation, and financial results.
Removed
In early 2022, we began to operate under a hybrid virtual-first working environment, meaning that most of our employees have the option to work remotely at least some of the time for the foreseeable future.
Added
Additionally, as we continue to adjust our products and service offerings to meet our clients’ continuing needs, we may shift the type and pricing of our products which may impact client renewal rates.
Removed
The hybrid working environment may impair our ability to maintain our culture of collaboration and continuous improvement, and may cause disruptions among our employees, including lost productivity, communication challenges and, potentially, employee dissatisfaction and attrition. If we are unable to enforce and protect our intellectual property rights, our competitive position may be harmed.
Added
This insurance included coverage for cancellations due to communicable diseases and enabled us to receive an amount up to the lost contribution margin per conference plus incurred expenses, as more specifically set forth in the policies’ provisions for calculating the amount of recoverable loss, and subject to the policies’ limits of liability.
Removed
In addition, variable-rate borrowings under our 2020 Credit Agreement typically use LIBOR as a benchmark based on market participant judgments for establishing the rate of interest. We expect LIBOR to disappear entirely after June 2023 for rates applicable to the 2020 Credit Agreement and our existing derivatives contracts.
Added
These policies provided up to $170 million in coverage for 2020 cancellations with the right to reinstate the policy limits for the payment of additional premium if those limits are utilized, for a maximum recovery of $340 million. The insurer has accepted and paid claims on the initial $170 million of 2020 coverage.
Removed
The Alternative Reference Rates Committee (ARRC), which was convened by the Federal Reserve Board and the New York Fed, has identified the Secured Overnight Financing Rate (SOFR) as the recommended risk-free alternative rate for USD LIBOR.
Added
The insurer has contested all coverage for events that were planned for 2021 but were cancelled due to COVID-19, as well as Gartner’s right to reinstate the policy limits. Our insurance coverage for 2023 (and likely beyond) excludes coverage for cancellations due to communicable diseases.
Removed
The future consequences of a transition away from LIBOR on our variable-rate borrowings, including the possible transition to rates based on observable transactions, such as SOFR, cannot be predicted at this time, but could include an increase in the cost of our variable-rate indebtedness and volatility in our earnings.
Added
Although document discovery in our cases against the insurer and insurance broker is continuing, we cannot predict how long it will take to resolve these lawsuits, whether we will be successful or the impact the resolution could have on our financial results.
Removed
In addition, the withdrawal of nations from existing common markets or trading blocs, such as the exit of the United Kingdom (UK) from the European Union (the EU), commonly referred to as Brexit, could be disruptive and negatively impact the business of our clients.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe also maintain an important presence in: Fort Myers, Florida; Arlington, Virginia; Egham, the United Kingdom; Gurgaon, India; Irving, Texas; and Barcelona, Spain. The Company does not own any real property. Our Stamford corporate headquarters is comprised of leased office space in two buildings located on the same campus.
Biggest changeWe also maintain an important presence in: Fort Myers, Florida; Arlington, Virginia; Egham, the United Kingdom; London, the United Kingdom; Gurgaon, India; Irving, Texas; and Barcelona, Spain. The Company does not own any real property. Our Stamford corporate headquarters is comprised of leased office space in two buildings located on the same campus.
Our lease for the Stamford headquarters facility expires in 2027 and contains three five-year renewal options at fair value. In early 2022, we began to operate under a hybrid virtual-first working environment, meaning that most of our employees have the option to work remotely at least some of the time for the foreseeable future.
Our lease for the Stamford headquarters facility expires in 2027 and contains three five-year renewal options at fair value. In early 2022, we began to operate under a hybrid working environment, meaning that most of our employees have the option to work remotely at least some of the time for the foreseeable future.
ITEM 2. PROPERTIES. As of December 31, 2022, we leased approximately 20 domestic and 65 international office properties for our ongoing business operations. These offices, which exclude certain properties that we sublease to others, support our executive and administrative activities, research and consulting, sales, systems support, operations, and other functions. Our corporate office is based in Stamford, Connecticut.
ITEM 2. PROPERTIES. As of December 31, 2023, we leased approximately 15 domestic and 60 international office properties for our ongoing business operations. These offices, which exclude certain properties that we sublease to others, support our executive and administrative activities, research and consulting, sales, systems support, operations, and other functions. Our corporate office is based in Stamford, Connecticut.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe believe that the potential liability, if any, in excess of amounts already accrued from all proceedings, claims and litigation will not have a material effect on our financial position, cash flows or results of operations when resolved in a future period. ITEM 4. MINE SAFETY DISCLOSURES. 16 Not applicable. 17 PART II
Biggest changeWe believe that the potential liability, if any, in excess of amounts already accrued from all proceedings, claims and litigation will not have a material effect on our financial position, cash flows or results of operations when resolved in a future period. ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. 17 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Our common stock is listed on the New York Stock Exchange under the symbol “IT”. As of February 3, 2023, there were 969 holders of record of our common stock. Our 2023 Annual Meeting of Stockholders will be held virtually on June 1, 2023.
Biggest changeITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Our common stock is listed on the New York Stock Exchange under the symbol “IT”. As of February 2, 2024, there were 923 holders of record of our common stock.
Repurchases may also be made from time-to-time in connection with the settlement of the Company’s stock-based compensation awards. The table below summarizes the repurchases of our common stock during the three months ended December 31, 2022 pursuant to our share repurchase program and the settlement of stock-based compensation awards.
Repurchases may also be made from time-to-time in connection with the settlement of the Company’s stock-based compensation awards. The table below summarizes the repurchases of our common stock during the three months ended December 31, 2023 pursuant to our share repurchase program and the settlement of stock-based compensation awards.
SHARE REPURCHASES In May 2015, our Board of Directors (the “Board”) authorized a share repurchase program to repurchase up to $1.2 billion of our common stock. The Board authorized incremental share repurchases of up to an additional $1.6 billion and $1.0 billion of the Company’s common stock during 2021 and 2022, respectively.
SHARE REPURCHASES In May 2015, our Board of Directors (the “Board”) authorized a share repurchase program to repurchase up to $1.2 billion of our common stock. The Board authorized incremental share repurchases of up to an additional $1.6 billion, $1.0 billion and $0.9 billion of the Company’s common stock during 2021, 2022 and 2023, respectively.
Removed
On February 2, 2023, the Company's Board of Directors authorized incremental share repurchases of up to an additional $400 million of Gartner's common stock.
Added
The Company adopted its Share Repurchase Plan with the goal of returning excess capital to shareholders in accordance with its capital allocation policy.
Removed
Period Total Number of Shares Purchased (#) Average Price Paid Per Share ($) Total Number of Shares Purchased Under Announced Programs (#) Maximum Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (in thousands) October 1, 2022 to October 31, 2022 24,587 $ 279.60 24,196 $ 606,007 November 1, 2022 to November 30, 2022 9,392 320.65 — 606,007 December 1, 2022 to December 31, 2022 4,189 344.30 — $ 606,007 Total for the quarter (1) 38,168 $ 296.80 24,196 (1) The repurchased shares during the three months ended December 31, 2022 included purchases for both the settlement of stock-based compensation awards and open market purchases.
Added
Period Total Number of Shares Purchased (#) Average Price Paid Per Share ($) Total Number of Shares Purchased Under Announced Programs (#) Maximum Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (in thousands) October 1, 2023 to October 31, 2023 (1) 298,097 $ 338.40 297,247 $ 1,010,159 November 1, 2023 to November 30, 2023 107,493 370.36 65,148 987,098 December 1, 2023 to December 31, 2023 6,039 457.60 — $ 987,098 Total for the quarter (2) 411,629 $ 348.49 362,395 (1) On October 31, 2023, the Company's Board of Directors authorized incremental share repurchases of up to an additional $500.0 million of Gartner's common stock.
Added
(2) The repurchased shares during the three months ended December 31, 2023 included purchases for both the settlement of stock-based compensation awards and open market purchases. All amounts presented are exclusive of the excise tax accrual. ITEM 6. [RESERVED]

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeYear Ended December 31, 2022 Year Ended December 31, 2021 Increase (Decrease) Percentage Increase (Decrease) Total revenues $ 5,475,846 $ 4,733,962 $ 741,884 16 % Costs and expenses: Cost of services and product development 1,693,771 1,444,093 249,678 17 Selling, general and administrative 2,480,944 2,155,658 325,286 15 Depreciation 93,410 102,802 (9,392) (9) Amortization of intangibles 98,536 109,603 (11,067) (10) Acquisition and integration charges 9,079 6,055 3,024 50 Operating income 1,100,106 915,751 184,355 20 Interest expense, net (121,323) (116,620) 4,703 4 Gain on event cancellation insurance claims — 152,310 (152,310) nm Other income, net 48,412 18,429 29,983 163 Less: Provision for income taxes 219,396 176,310 43,086 24 Net income $ 807,799 $ 793,560 $ 14,239 2 % nm = not meaningful Total revenues for 2022 were $5.5 billion, an increase of $741.9 million compared to 2021, or 16% on a reported basis and 20% excluding the foreign currency impact.
Biggest changeYear Ended December 31, 2023 Year Ended December 31, 2022 Increase (Decrease) Percentage Increase (Decrease) Total revenues $ 5,906,956 $ 5,475,846 $ 431,110 8 % Costs and expenses: Cost of services and product development 1,903,240 1,693,771 209,469 12 Selling, general and administrative 2,701,542 2,480,944 220,598 9 Depreciation 98,645 93,410 5,235 6 Amortization of intangibles 92,458 98,536 (6,078) (6) Acquisition and integration charges 9,587 9,079 508 6 Gain from sale of divested operation (135,410) — (135,410) nm Operating income 1,236,894 1,100,106 136,788 12 Interest expense, net (94,246) (121,323) (27,077) (22) Gain on event cancellation insurance claims 3,077 — 3,077 nm Other income, net 1,404 48,412 (47,008) (97) Less: Provision for income taxes 264,663 219,396 45,267 21 Net income $ 882,466 $ 807,799 $ 74,667 9 % nm = not meaningful Total revenues for 2023 were $5.9 billion, an increase of $431.1 million compared to 2022, or 8% on both a reported basis and excluding the foreign currency impact.
Note 10 — Stock-Based Compensation in the Notes to Consolidated Financial Statements provides additional information regarding stock-based compensation. Determining the appropriate fair value model and calculating the fair value of stock-based compensation awards requires the use of certain subjective assumptions, including the expected life of a stock-based compensation award and the Company’s common stock price volatility.
Note 10 — Stock-Based Compensation in the Notes to Consolidated Financial Statements provides additional information regarding stock-based compensation. Determining the appropriate fair value model and calculating the fair value of stock-based compensation awards requires the use of certain subjective assumptions, including the expected life of a stock-based compensation award and our common stock price volatility.
(2) Global Technology Sales includes sales to users and providers of technology. Global Business Sales includes sales to all other functional leaders. (3) Contract values are on a foreign exchange neutral basis. Contract values as of December 31, 2021 have been calculated using the same foreign currency rates as 2022.
(2) Global Technology Sales includes sales to users and providers of technology. Global Business Sales includes sales to all other functional leaders. (3) Contract values are on a foreign exchange neutral basis. Contract values as of December 31, 2022 have been calculated using the same foreign currency rates as 2023.
Interest payments were based on the effective interest rates as of December 31, 2022. Commitment fees were based on unused balances and commitment rates as of December 31, 2022. Note 6 — Debt in the Notes to Consolidated Financial Statements provides information regarding the Company’s debt obligations and interest rate swap contracts.
Interest payments were based on the effective interest rates as of December 31, 2023. Commitment fees were based on unused balances and commitment rates as of December 31, 2023. Note 6 — Debt in the Notes to Consolidated Financial Statements provides information regarding the Company’s debt obligations and interest rate swap contracts.
RECENTLY ISSUED ACCOUNTING STANDARDS The FASB has issued accounting standards that had not yet become effective as of December 31, 2022 and may impact the Company’s consolidated financial statements or its disclosures in future periods. Note 1 — Business and Significant Accounting Policies in the Notes to Consolidated Financial Statements provides information regarding those accounting standards. 29
RECENTLY ISSUED ACCOUNTING STANDARDS The FASB has issued accounting standards that had not yet become effective as of December 31, 2023 and may impact the Company’s consolidated financial statements or its disclosures in future periods. Note 1 — Business and Significant Accounting Policies in the Notes to Consolidated Financial Statements provides information regarding those accounting standards.
Cash flow generation has also benefited from our ongoing efforts to improve the operating efficiencies of our businesses as well as a focus on the optimal management of our working capital as we increase sales. Our cash and cash equivalents are held in numerous locations throughout the world with 30% held overseas at December 31, 2022.
Cash flow generation has also benefited from our ongoing efforts to improve the operating efficiencies of our businesses as well as a focus on the optimal management of our working capital as we increase sales. Our cash and cash equivalents are held in numerous locations throughout the world with 55% held overseas at December 31, 2023.
The Company uses estimates in determining the amount of unrecognized tax benefits associated with uncertain tax positions. Significant judgment is required in evaluating tax law and measuring the benefits likely to be realized. Uncertain tax positions are periodically re-evaluated and adjusted as more information about their ultimate realization becomes available.
We use estimates in determining the amount of unrecognized tax benefits associated with uncertain tax positions. Significant judgment is required in evaluating tax law and measuring the benefits likely to be realized. Uncertain tax positions are periodically re-evaluated and adjusted as more information about their ultimate realization becomes available.
Important factors that could cause our actual results, performance and achievements, or industry results to differ materially from estimates or projections contained in our forward-looking statements include, among others, the following: the impact of general economic conditions, including inflation (and related monetary policy by governments in response to inflation), on economic activity and our operations; changes in macroeconomic and market conditions and market volatility, including interest rates and the effect on the credit markets and access to capital; the impact of global economic and geopolitical conditions, including inflation, recession and the COVID-19 pandemic; our ability to carry out our strategic initiatives and manage associated costs; our ability to recover potential claims under our event cancellation insurance; the timing of conferences and meetings, in particular our Gartner Symposium/Xpo series that normally occurs during the fourth quarter; our ability to achieve and effectively manage growth, including our ability to integrate our acquisitions and consummate and integrate future acquisitions; our ability to pay our debt obligations; our ability to maintain and expand our products and services; our ability to expand or retain our customer base; our ability to grow or sustain revenue from individual customers; our ability to attract and retain a professional staff of research analysts and consultants as well as experienced sales personnel upon whom we are dependent, especially in light of increasing labor competition; our ability to achieve continued customer renewals and achieve new contract value, backlog and deferred revenue growth in light of competitive pressures; our ability to successfully compete with existing competitors and potential new competitors; our ability to enforce and protect our intellectual property rights; additional risks associated with international operations, including foreign currency fluctuations; the impact on our business resulting from changes in international conditions, including those resulting from the war in Ukraine and current and future sanctions imposed by governments or other authorities; the impact of restructuring and other charges on our businesses and operations; cybersecurity incidents; risks associated with the creditworthiness, budget cuts, and shutdown of governments and agencies; our ability to meet ESG commitments; the impact of changes in tax policy (including the recently enacted Inflation Reduction Act of 2022) and heightened scrutiny from various taxing authorities globally; changes to laws and regulations; and other risks and uncertainties.
Important factors that could cause our actual results, performance and achievements, or industry results to differ materially from estimates or projections contained in our forward-looking statements include, among others, the following: the impact of general economic conditions, including inflation (and related monetary policy by governments in response to inflation), on economic activity and our operations; changes in macroeconomic and market conditions and market volatility, including interest rates and the effect on the credit markets and access to capital; the impact of global economic and geopolitical conditions, including inflation, and recession; our ability to carry out our strategic initiatives and manage associated costs; our ability to recover potential claims under our event cancellation insurance; the timing of conferences and meetings, in particular our Gartner Symposium/Xpo series that normally occurs during the fourth quarter; our ability to achieve and effectively manage growth, including our ability to integrate our acquisitions and consummate and integrate future acquisitions; our ability to pay our debt obligations; our ability to maintain and expand our products and services; our ability to expand or retain our customer base; our ability to grow or sustain revenue from individual customers; our ability to attract and retain a professional staff of research analysts and consultants as well as experienced sales personnel upon whom we are dependent, especially in light of labor competition; our ability to achieve continued customer renewals and achieve new contract value, backlog and deferred revenue growth in light of competitive pressures; our ability to successfully compete with existing competitors and potential new competitors; our ability to enforce and protect our intellectual property rights; our ability to keep pace with technological developments in artificial intelligence; additional risks associated with international operations, including foreign currency fluctuations; the impact on our business resulting from changes in international conditions, including those resulting from the conflict in the Middle East, the war in Ukraine and current and future sanctions imposed by governments or other authorities; the impact of restructuring and other charges on our businesses and operations; cybersecurity incidents; risks associated with the creditworthiness, budget cuts, and shutdown of governments and agencies; our ability to meet ESG commitments; the impact of changes in tax policy (including global minimum tax legislation) and heightened scrutiny from various taxing authorities globally; changes to laws and regulations; and other risks and uncertainties.
As of December 31, 2022, we had $698.0 million of cash and cash equivalents and approximately $1.0 billion of available borrowing capacity on our revolving credit facility. During 2022, we repurchased 3.8 million shares of the Company’s common stock for an aggregate purchase price of approximately $1.0 billion.
As of December 31, 2023, we had $1.3 billion of cash and cash equivalents and approximately $1.0 billion of available borrowing capacity on our revolving credit facility. During 2023, we repurchased 1.8 million shares of the Company’s common stock for an aggregate purchase price of approximately $0.6 billion.
Other income, net for the years presented herein included the net impact of foreign currency gains and losses from our hedging activities, as well as sales of certain state tax credits and the recognition of other tax incentives. During 2022 and 2021, Other income, net included a $52.3 million and a $20.2 million gain on de-designated interest rate swaps, respectively.
Other income, net for the years presented herein included the net impact of foreign currency gains and losses from our hedging activities, as well as sales of certain state tax credits and the recognition of other tax incentives. During 2023 and 2022, Other income, net included a $3.9 million and a $52.3 million gain on de-designated interest rate swaps, respectively.
Reportable Segments The sections below present the results of the Company’s three reportable business segments: Research, Conferences and Consulting.
Reportable Segments The sections below present the results of the Company’s three business segments – Research, Conferences and Consulting, as described below.
Contractual Cash Commitments The table below summarizes the Company’s future contractual cash commitments as of December 31, 2022 (in thousands).
Contractual Cash Commitments The table below summarizes the Company’s future contractual cash commitments as of December 31, 2023 (in thousands).
As a result, if circumstances change and the Company deems it necessary in the future to modify the assumptions it made or to use different assumptions, or if the quantity and nature of the Company’s stock-based compensation awards changes, then the amount of expense may need to be adjusted and future stock-based compensation expense could be materially different from what has been recorded in the current period.
As a result, if circumstances change and we deem it necessary in the future to modify the assumptions we made or to use different assumptions, or if the quantity and nature of our stock-based compensation awards changes, then the amount of expense may need to be adjusted and future stock-based compensation expense could be materially different from what has been recorded in the current period.
The majority of our Research customer contracts are paid in advance and, combined with a strong customer retention rate and high incremental margins, has resulted in continuously strong operating cash flow.
The majority of our Research customer contracts are paid in advance and, combined with a strong customer retention rate and high incremental margins, our subscription-based business model has resulted in continuously strong operating cash flow.
We are a trusted advisor and an objective resource for more than 15,000 enterprises in approximately 90 countries and territories — across all major functions, in every industry and enterprise size.
We are a trusted advisor and an objective resource for close to 15,000 enterprises in approximately 90 countries and territories — across all major functions, in every industry and enterprise size.
During the 2022 period, we used $1.0 billion of cash for share repurchases and paid a net $5.9 million in debt principal repayments.
During the 2023 period, we used $0.6 billion of cash for share repurchases and paid a net $7.8 million in debt principal repayments. During the 2022 period, we used $1.0 billion for share repurchases and paid a net $5.9 million in debt principal repayments.
Accounting for stock-based compensation — The Company accounts for stock-based compensation awards in accordance with FASB ASC Topics 505 and 718 and SEC Staff Accounting Bulletins No. 107 and No. 110. The Company recognizes stock-based compensation expense, which is based on the fair value of the award on the date of grant, over the related service period.
Accounting for stock-based compensation — We account for stock-based compensation awards in accordance with FASB ASC Topics 505 and 718 and SEC Staff Accounting Bulletins No. 107 and No. 110. We recognize stock-based compensation expense, which is based on the fair value of the award on the date of grant, over the related service period.
(2) The Company leases various facilities, automobiles, computer equipment and other assets under non-cancelable operating lease agreements expiring between 2023 and 2038. The total commitment excludes approximately $252.3 million of estimated future cash receipts from the Company’s subleasing arrangements.
(2) The Company leases various facilities, automobiles, computer equipment and other assets under non-cancelable operating lease agreements expiring between 2024 and 2038. The total commitment excludes approximately $207.6 million of estimated future cash receipts from the Company’s subleasing arrangements.
Research revenues increased to $4.6 billion in 2022, an increase of 12% compared to 2021 on a reported basis and 16% excluding the foreign currency impact. The Research gross contribution margin was 74% in both 2022 and 2021.
Research revenues increased to $4.9 billion in 2023, an increase of 6% compared to 2022 on both a reported basis and excluding the foreign currency impact. The Research gross contribution margin was 74% in both 2023 and 2022.
The increase in revenues on a reported basis was due to a 13% increase in labor-based consulting, and a 25% increase in contract optimization. Contract optimization revenue may vary significantly and, as such, 2022 revenues may not be indicative of future results. The segment gross contribution margin was 39% and 38% in 2022 and 2021, respectively.
The increase in revenues on a reported basis was due to a 6% increase in labor-based consulting, and a 10% increase in contract optimization. Contract optimization revenue may vary significantly and, as such, 2023 revenues may not be indicative of future results. The segment gross contribution margin was 35% and 39% in 2023 and 2022, respectively.
If we determine there is any additional excess property, there is no assurance that we will be able to sublease any such excess properties or that we will not incur costs in connection with such exit activities, which may be material.
We expect to continue to evaluate our real estate footprint globally. If we determine there is any additional excess property, there is no assurance that we will be able to sublease any such excess properties or that we will not incur costs in connection with such exit activities, which may be material.
The increase in Cost of services and product development was primarily due to: (i) increased compensation costs as a result of higher headcount, (ii) increased conference related expenses, due to the return to in-person destination conferences and (iii) increased research program expenses.
The increase in Cost of services and product development was primarily due to increased compensation costs as a result of higher headcount, as well as increased conference related expenses, due to the return to in-person destination conferences, partially offset by decreased research program expenses.
We estimate our income taxes in each of the jurisdictions where the Company operates. This process involves estimating our current tax expense or benefit together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included in our consolidated balance sheets.
This process involves estimating our current tax expense or benefit together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included in our consolidated balance sheets.
Note 12 — Income Taxes in the Notes to Consolidated Financial Statements provides additional information regarding the Company’s income taxes. Net income was $807.8 million and $793.6 million during 2022 and 2021, respectively. Additionally, our diluted net income per share increased by $0.75 in 2022 compared to 2021.
Note 12 — Income Taxes in the Notes to Consolidated Financial Statements provides additional information regarding the Company’s income taxes. Net income was $882.5 million and $807.8 million during 2023 and 2022, respectively. Additionally, our diluted net income per share increased by $1.12 in 2023 compared to 2022.
Except as required by law, we disclaim any obligation to review or update these forward-looking statements to reflect events or circumstances as they occur. BUSINESS OVERVIEW 19 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.
Except as required by law, we disclaim any obligation to review or update these forward-looking statements to reflect events or circumstances as they occur. BUSINESS OVERVIEW Gartner, Inc. (NYSE: IT) delivers actionable, objective insight that drives smarter decisions and stronger performance on an organization’s mission-critical priorities.
Note 1 — Business and Significant Accounting Policies and Note 9 — Revenue and Related Matters in the Notes to Consolidated Financial Statements provide additional information regarding our revenues. Accounting for income taxes — The Company uses the asset and liability method of accounting for income taxes.
Note 1 — Business and Significant Accounting Policies and Note 9 — Revenue and Related Matters in the Notes to Consolidated Financial Statements provide additional information regarding our revenues. Accounting for income taxes — We use the asset and liability method of accounting for income taxes. We estimate our income taxes in each of the jurisdictions where we operate.
We had total revenues of $5.5 billion in 2022, an increase of 16% compared to 2021 on a reported basis and 20% excluding the foreign currency impact. Net income increased to $807.8 million in 2022 from $793.6 million in 2021 and diluted earnings per share was $9.96 in 2022 compared to $9.21 in 2021.
We had total revenues of $5.9 billion in 2023, an increase of 8% compared to 2022 on both a reported basis and excluding the foreign currency impact. Net income increased to $882.5 million in 2023 from $807.8 million in 2022 and diluted earnings per share was $11.08 in 2023 compared to $9.96 in 2022.
Cost of services and product development as a percent of revenues was 31% for both 2022 and 2021, respectively. 24 Selling, general and administrative (“SG&A”) expense was $2.5 billion in 2022, an increase of $325.3 million compared to 2021, or 15% on a reported basis and 19% excluding the foreign currency impact.
Cost of services and product development as a percent of revenues was 32% and 31% for 2023 and 2022, respectively. 24 Selling, general and administrative (“SG&A”) expense was $2.7 billion in 2023, an increase of $220.6 million compared to 2022, or 9% on both a reported basis and excluding the foreign currency impact.
The Conferences gross contribution margin was 54% and 62% in 2022 and 2021, respectively. We held 25 in-person and 16 virtual conferences in 2022, and 39 virtual conferences in 2021. Consulting revenues increased to $481.8 million in 2022, an increase of 15% compared to 2021 on a reported basis and 22% excluding the foreign currency impact.
The Conferences gross contribution margin was 50% and 54% in 2023 and 2022, respectively. We held 47 in-person conferences in 2023, and 25 in-person and 16 virtual conferences in 2022. Consulting revenues increased to $514.7 million in 2023, an increase of 7% compared to 2022 on a reported basis and 8% excluding the foreign currency impact.
SG&A expense as a percent of revenues was 45% and 46% during 2022 and 2021, respectively. Depreciation decreased by 9% during 2022 compared to 2021.
SG&A expense as a percent of revenues was 46% and 45% during 2023 and 2022, respectively. Depreciation increased by 6% during 2023 compared to 2022.
Gain on event cancellation insurance claims of $152.3 million during the year ended December 31, 2021 reflected proceeds, net of expense recoveries, related to the 2020 conference cancellation insurance claims.
Gain on event cancellation insurance claims of $3.1 million during the year ended December 31, 2023 reflected proceeds related to the 2020 conference cancellation insurance claims.
The increase in interest expense, net was primarily due to an increase in debt as a result of the issuance of the 2029 Notes in June 2021 and higher interest rates on our term loan, partially offset by increased interest income, as well as lower interest expense due to the maturation of $700.0 million in fixed-for-floating interest rate swap contracts in March 2022.
The decrease in interest expense, net was primarily due to increased interest income, as well as lower interest expense due to the maturation of $700.0 million in fixed-for-floating interest rate swap contracts in March 2022, partially offset by higher interest expense on our term loan.
The Consulting gross contribution margin was 39% and 38% in 2022 and 2021, respectively. Backlog was $139.7 million at December 31, 2022. Cash provided by operating activities was $1.1 billion and $1.3 billion during 2022 and 2021, respectively.
The Consulting gross contribution margin was 35% and 39% in 2023 and 2022, respectively. Backlog was $162.1 million at December 31, 2023. Cash provided by operating activities was $1.2 billion and $1.1 billion during 2023 and 2022, respectively.
Gross contribution is defined as operating income or loss excluding certain Cost of services and product development expenses, SG&A expenses, Depreciation, Amortization of intangibles, and Acquisition and integration charges. Gross contribution margin is defined as gross contribution as a percent of revenues.
SEGMENT RESULTS We evaluate reportable segment performance and allocate resources based on gross contribution margin. Gross contribution is defined as operating income or loss excluding certain Cost of services and product development expenses, SG&A expenses, 25 Depreciation, Amortization of intangibles, and Acquisition and integration charges. Gross contribution margin is defined as gross contribution as a percent of revenues.
We have historically generated significant cash flows from our operating activities. Our operating cash flow has been continuously maintained by the leverage characteristics of our subscription-based business model in our Research segment, which is our largest business segment and historically has constituted a significant portion of our total revenues.
We have historically generated significant cash flows from our operating activities, benefiting from the favorable working capital dynamics of our subscription-based business model in our Research segment, which is our largest business segment and historically has constituted a significant portion of our total revenues.
Cost of services and product development was $1.7 billion in 2022, an increase of $249.7 million compared to 2021, or 17% on a reported basis and 21% excluding the foreign currency impact.
Cost of services and product development was $1.9 billion in 2023, an increase of $209.5 million compared to 2022, or 12% on both a reported basis and excluding the foreign currency impact.
Contract value was $4.7 billion at December 31, 2022, an increase of 12% compared to December 31, 2021 on a foreign currency neutral basis. Conferences revenues increased to $389.3 million in 2022, an increase of 82% compared to 2021 on a reported basis and 90% excluding the foreign currency impact.
Contract value was $4.8 billion at December 31, 2023, an increase of 8% compared to December 31, 2022 on a foreign currency neutral basis. Conferences revenues increased to $505.2 million in 2023, an increase of 30% compared to 2022 on a reported basis and 29% excluding the foreign currency impact.
Research revenues increased by $503.4 million during 2022 compared to 2021, or 12% on a reported basis and 16% excluding the foreign currency impact. The gross contribution margin was 74% in both 2022 and 2021. The increase in revenues during 2022 was primarily due to strong Research contract value growth in 2021 and 2022.
Research revenues increased by $282.3 million during 2023 compared to 2022, or 6% on both a reported basis and excluding the foreign currency impact. The increase in revenues during 2023 was primarily due to strong Research contract value growth in 2022.
The number of quota-bearing sales associates in Global Technology Sales increased by 18% to 3,630 and in Global Business Sales increased by 22% to 1,144, compared to December 31, 2021. On a combined basis, the total number of quota-bearing sales associates increased by 19% when compared to December 31, 2021.
The number of quota-bearing sales associates in Global Technology Sales increased slightly to 3,641 and in Global Business Sales increased by 8% to 1,188, compared to December 31, 2022. On a combined basis, the total number of quota-bearing sales associates increased by 2% when compared to December 31, 2022.
Global Business Sales (“GBS”) contract value increased by 19% year-over-year, also primarily driven by new business from new and existing clients. Nearly all of our GBS practices achieved double-digit growth rates, with the majority of enterprise size and sectors growing more than 15% year-over-year.
GTS contract value increased by at least mid single-digits for the majority of enterprise sizes and sectors. Global Business Sales (“GBS”) contract value increased by 13% year-over-year, also primarily driven by new business from existing clients. The majority of our GBS practices achieved double-digit growth rates, with the majority of enterprise sizes and sectors also growing double-digits year-over-year.
During 2022, we incurred charges associated with the impairment of right-of-use assets and other long-lived assets, related to certain office locations we no longer intend to use, of $54.0 million, compared to $49.5 million in 2021. The year ended December 31, 2021 also included expenses related to cancelled conferences.
During 2023, we incurred charges associated with the impairment of right-of-use assets and other long-lived assets, related to certain office locations we no longer intend to use, of $20.4 million, compared to $54.0 million in 2022.
Average annualized revenue per billable headcount represents a measure of the revenue generating ability of an average billable consultant and is calculated periodically by multiplying the average billing rate per hour times the utilization percentage times the billable hours available for one year. 21 EXECUTIVE SUMMARY OF OPERATIONS AND FINANCIAL POSITION The fundamentals of our strategy include a focus on creating actionable insights for executive leaders and their teams, delivering innovative and highly differentiated product offerings, building a strong sales capability, providing world class client service with a focus on client engagement and retention, and continuously improving our operational effectiveness.
Utilization rates are calculated for billable headcount on a percentage basis by dividing total hours billed by total hours available to bill. 21 EXECUTIVE SUMMARY OF OPERATIONS AND FINANCIAL POSITION The fundamentals of our strategy include a focus on creating actionable insights for executive leaders and their teams, delivering innovative and highly differentiated product offerings, building a strong sales capability, providing world class client service with a focus on client engagement and retention, and continuously improving our operational effectiveness.
These foreign currency neutral dollar amounts and percentages eliminate the effects of exchange rate fluctuations and thus provide a more accurate and meaningful trend in the underlying data being measured.
In addition to GAAP results, we provide foreign currency neutral dollar amounts and percentages for our revenues, certain expenses, contract values and other metrics. These foreign currency neutral dollar amounts and percentages eliminate the effects of exchange rate fluctuations and thus provide a more accurate and meaningful trend in the underlying data being measured.
In addition to the contractual cash commitments included in the above table, the Company has other payables and liabilities that may be legally enforceable but are not considered contractual commitments. Information regarding the Company’s payables and liabilities is included in Note 5 — Accounts Payable and Accrued and Other Liabilities in the Notes to Consolidated Financial Statements.
In addition to the contractual cash commitments included in the above table, the Company has other payables and liabilities that may be legally enforceable but are not considered contractual commitments.
(2) Includes both virtual and in-person conferences. Single day, local meetings are excluded. Conferences revenues increased by $174.8 million during 2022 compared to 2021, or 82% on a reported basis and 90% excluding the foreign currency impact.
(2) Includes both virtual and in-person conferences. Single day, local meetings are excluded. Conferences revenues increased by $115.9 million during 2023 compared to 2022, or 30% on a reported basis and 29% excluding the foreign currency impact. We re-launched in-person destination conferences during the second quarter of 2022.
(2) Backlog is on a foreign currency neutral basis. Backlog as of December 31, 2021 has been calculated using the same foreign currency rates as 2022. We changed our method of calculating backlog beginning in 2022 to include multi-year contracts. Consulting revenues increased 15% during 2022 compared to 2021 on a reported basis and 22% excluding the foreign currency impact.
(2) Backlog is on a foreign currency neutral basis. Backlog as of December 31, 2022 has been calculated using the same foreign currency rates as 2023. Consulting revenues increased 7% during 2023 compared to 2022 on a reported basis and 8% excluding the foreign currency impact.
Readers should not place undue reliance on these forward-looking statements, which reflect management’s opinion only as of the date on which they were made. Forward-looking statements in this Annual Report on Form 10-K speak only as of the date hereof, and forward-looking statements in documents attached that are incorporated by reference speak only as of the date of those documents.
Forward-looking statements in this Annual Report on Form 10-K speak 19 only as of the date hereof, and forward-looking statements in documents attached that are incorporated by reference speak only as of the date of those documents.
Operating income was $1.1 billion and $915.8 million during 2022 and 2021, respectively. The increase in operating income was due to increased revenue, partially offset by an increase in cost of services and product development and selling, general and administrative expenses. Interest expense, net increased by $4.7 million during 2022 compared to 2021.
The increase in operating income was primarily due to the gain from sale of divested operation, as well as increased revenue, partially offset by an increase in cost of services and product development and selling, general and administrative expenses. Interest expense, net decreased by $27.1 million during 2023 compared to 2022.
This MD&A provides an analysis of our consolidated financial results, segment results and cash flows for 2022 and 2021 under the headings “Results of Operations,” “Segment Results” and “Liquidity and Capital Resources.” For a similar detailed discussion comparing 2021 and 2020, refer to those headings under Item 7., “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the year ended December 31, 2021. 18 In addition to GAAP results, we provide foreign currency neutral dollar amounts and percentages for our revenues, certain expenses, contract values and other metrics.
References to “Gartner,” the “Company,” “we,” “our” and “us” in this MD&A are to Gartner, Inc. and its consolidated subsidiaries. 18 This MD&A provides an analysis of our consolidated financial results, segment results and cash flows for 2023 and 2022 under the headings “Results of Operations,” “Segment Results” and “Liquidity and Capital Resources.” For a similar detailed discussion comparing 2022 and 2021, refer to those headings under Item 7., “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the year ended December 31, 2022.
The increase in revenues for the year ended December 31, 2022 was primarily due the return to in-person destination conferences. The segment gross contribution margin was 54% and 62% in 2022 and 2021, respectively. The lower gross contribution margin during 2022 was primarily due to the return to in-person destination conferences.
The segment gross contribution margin was 50% and 54% in 2023 and 2022, respectively. The lower gross contribution margin during 2023 was also primarily due to the increase in in-person destination conferences.
Additionally during 2021, we paid $7.3 million in deferred financing fees related to our financing activities. See Note 6 — Debt in the Notes to Consolidated Financial Statements provides additional information regarding the Company’s financing activities in 2021. OBLIGATIONS AND COMMITMENTS 28 Debt As of December 31, 2022, the Company had $2.5 billion of principal amount of debt outstanding.
OBLIGATIONS AND COMMITMENTS Debt As of December 31, 2023, the Company had $2.5 billion of principal amount of debt outstanding. Note 6 — Debt in the Notes to Consolidated Financial Statements provides additional information regarding the Company’s outstanding debt obligations.
The decrease for the year ended December 31, 2022 was primarily due to a reduction in leasehold improvements depreciation as a result of the impairment losses recorded in the fourth quarter of 2021 and the year ended December 31, 2022.
The increase for the year ended December 31, 2023 was primarily due to increased computer equipment and software additions in 2022 and 2023, partially offset by a reduction in leasehold improvements depreciation as a result of the impairment losses recorded during 2022 and 2023.
Amortization of intangibles decreased by 10% during 2022 compared to 2021 due to certain intangible assets that became fully amortized in 2021. Acquisition and integration charges increased by $3.0 million during the year ended December 31, 2022, compared to the same period in 2021. The increase is primarily due to expenses related to the pending divestiture of our TalentNeuron business.
Amortization of intangibles decreased by 6% during 2023 compared to 2022 primarily due to intangible assets divested as part of the sale of our TalentNeuron business. Acquisition and integration charges increased by $0.5 million during the year ended December 31, 2023, compared to the same period in 2022.
GTS client retention was 86% as of both December 31, 2022 and 2021, while wallet retention was 105% and 106%, as of December 31, 2022 and 2021, respectively.
GTS client retention was 83% and 86% as of December 31, 2023 and 2022, respectively, while wallet retention was 101% and 105%, as of December 31, 2023 and 2022, respectively. GBS client retention was 87% and 89% as of December 31, 2023 and 2022, respectively, while wallet retention was 107% and 112% as of December 31, 2023 and 2022, respectively.
Global Technology Sales (“GTS”) contract value increased by 10% at December 31, 2022 when compared to December 31, 2021. The increase in GTS contract value was primarily due to new business from new and existing clients. GTS contract value increased by double-digits for the majority of sectors.
All industry sectors grew at least high single-digit rates, other than technology and media. The fastest growth was in the public, energy and manufacturing sectors. Global Technology Sales (“GTS”) contract value increased by 6% at December 31, 2023 when compared to December 31, 2022. The increase in GTS contract value was primarily due to new business from existing clients.
Year Ended December 31, Increase (Decrease) 2022 2021 Cash provided by operating activities $ 1,101,422 $ 1,312,470 $ (211,048) Cash used in investing activities (117,558) (80,467) (37,091) Cash used in financing activities (1,027,442) (1,157,609) 130,167 Net (decrease) increase in cash and cash equivalents and restricted cash (43,578) 74,394 (117,972) Effects of exchange rates (18,425) (26,375) 7,950 Beginning cash and cash equivalents and restricted cash 760,602 712,583 48,019 Ending cash and cash equivalents and restricted cash $ 698,599 $ 760,602 $ (62,003) Operating Cash provided by operating activities was $1.1 billion and $1.3 billion in 2022 and 2021, respectively.
Year Ended December 31, Increase (Decrease) 2023 2022 Cash provided by operating activities $ 1,155,737 $ 1,101,422 $ 54,315 Cash provided by (used in) investing activities 54,157 (117,558) 171,715 Cash used in financing activities (588,881) (1,027,442) 438,561 Net increase (decrease) in cash and cash equivalents and restricted cash 621,013 (43,578) 664,591 Effects of exchange rates (13) (18,425) 18,412 Beginning cash and cash equivalents and restricted cash 698,599 760,602 (62,003) Ending cash and cash equivalents and restricted cash $ 1,319,599 $ 698,599 $ 621,000 Operating Cash provided by operating activities was $1.2 billion and $1.1 billion in 2023 and 2022, respectively.
On February 2, 2023, we completed the sale of TalentNeuron for approximately $164.0 million, prior to final working capital adjustments. 20 BUSINESS MEASUREMENTS We believe that the following business measurements are important performance indicators for our business segments: BUSINESS SEGMENT BUSINESS MEASUREMENT Research Contract value represents the dollar value attributable to all of our subscription-related contracts.
We recognized a pre-tax gain of $135.4 million on the sale of TalentNeuron, which is included in Gain from sale of divested operation in the Consolidated Statement of Operations for the year ended December 31, 2023. 20 BUSINESS MEASUREMENTS We believe that the following business measurements are important performance indicators for our business segments: BUSINESS SEGMENT BUSINESS MEASUREMENT Research Contract value represents the dollar value attributable to all of our subscription-related contracts.
Research The Year Ended December 31, 2022 The Year Ended December 31, 2021 Increase (Decrease) Percentage Increase (Decrease) Financial Measurements: Revenues (1) $ 4,604,791 $ 4,101,392 $ 503,399 12 % Gross contribution (1) $ 3,414,574 $ 3,036,925 $ 377,649 12 % Gross contribution margin 74 % 74 % — point — Business Measurements: Global Technology Sales (2): Contract value (1), (3) $ 3,632,200 $ 3,300,600 $ 331,600 10 % Client retention 86 % 86 % — point — Wallet retention 105 % 106 % (1) point — Global Business Sales (2): Contract value (1), (3) $ 1,028,200 $ 864,600 $ 163,600 19 % Client retention 89 % 87 % 2 points — Wallet retention 112 % 115 % (3) points — (1) Dollars in thousands.
Research The Year Ended December 31, 2023 The Year Ended December 31, 2022 Increase (Decrease) Percentage Increase (Decrease) Financial Measurements: Revenues (1) $ 4,887,046 $ 4,604,791 $ 282,255 6 % Gross contribution (1) $ 3,600,143 $ 3,414,574 $ 185,569 5 % Gross contribution margin 74 % 74 % — point — Business Measurements: Contract Value (1), (3) $ 4,838,600 $ 4,490,700 $ 347,900 8 % Global Technology Sales (2): Contract value (1), (3) $ 3,747,600 $ 3,524,000 $ 223,600 6 % Client retention 83 % 86 % (3) points — Wallet retention 101 % 105 % (4) points — Global Business Sales (2): Contract value (1), (3) $ 1,091,000 $ 966,700 $ 124,300 13 % Client retention 87 % 89 % (2) points — Wallet retention 107 % 112 % (5) points — (1) Dollars in thousands.
The increase in SG&A during the year ended December 31, 2022, as compared to the prior fiscal year, was primarily due to higher personnel costs in the current year, including higher salary expense due to increased headcount, as well as higher commission expense, following strong contract value growth in 2021, which is amortized as the related revenue is recognized.
The increase in SG&A during the year ended December 31, 2023, as compared to the prior fiscal year, was primarily due to higher personnel costs in the current year, including higher salary expense due to increased headcount. These increases were partially offset by a reduction in facilities expense, related to a reduction of our real estate footprint.
At December 31, 2022, we had $698.0 million of cash and cash equivalents and approximately $1.0 billion of available borrowing capacity on the revolving credit facility under our 2020 Credit Agreement. We believe that the Company has adequate liquidity and access to capital markets to meet its currently anticipated needs for both the next twelve months and the foreseeable future.
We believe that the Company has adequate liquidity and access to capital markets to meet its currently anticipated needs for both the next twelve months and the foreseeable future.
Primary Geographic Market Year Ended December 31, 2022 Year Ended December 31, 2021 Increase Percentage Increase United States and Canada $ 3,619,382 $ 3,048,902 $ 570,480 19 % Europe, Middle East and Africa 1,234,659 1,130,979 103,680 9 Other International 621,805 554,081 67,724 12 Total revenues $ 5,475,846 $ 4,733,962 $ 741,884 16 % Segment Year Ended December 31, 2022 Year Ended December 31, 2021 Increase Percentage Increase Research $ 4,604,791 $ 4,101,392 $ 503,399 12 % Conferences 389,273 214,449 174,824 82 Consulting 481,782 418,121 63,661 15 Total revenues $ 5,475,846 $ 4,733,962 $ 741,884 16 % Refer to the section of this MD&A below entitled “Segment Results” for a discussion of revenues and results by segment.
Primary Geographic Market Year Ended December 31, 2023 Year Ended December 31, 2022 Increase Percentage Increase United States and Canada $ 3,911,042 $ 3,619,382 $ 291,660 8 % Europe, Middle East and Africa 1,332,070 1,234,659 97,411 8 Other International 663,844 621,805 42,039 7 Total revenues $ 5,906,956 $ 5,475,846 $ 431,110 8 % Segment Year Ended December 31, 2023 Year Ended December 31, 2022 Increase Percentage Increase Research $ 4,887,046 $ 4,604,791 $ 282,255 6 % Conferences 505,164 389,273 115,891 30 Consulting 514,746 481,782 32,964 7 Total revenues $ 5,906,956 $ 5,475,846 $ 431,110 8 % Refer to the section of this MD&A below entitled “Segment Results” for a discussion of revenues and results by segment.
Consulting As Of And For The Year Ended December 31, 2022 As Of And For The Year Ended December 31, 2021 Increase (Decrease) Percentage Increase (Decrease) Financial Measurements: Revenues (1) $ 481,782 $ 418,121 $ 63,661 15 % Gross contribution (1) $ 189,834 $ 158,843 $ 30,991 20 % Gross contribution margin 39 % 38 % 1 point — Business Measurements: Backlog (1), (2) $ 139,700 $ 113,000 $ 26,700 24 % Average billable headcount 827 749 78 10 % Consultant utilization 70 % 68 % 2 points — (1) Dollars in thousands.
Consulting As Of And For The Year Ended December 31, 2023 As Of And For The Year Ended December 31, 2022 Increase (Decrease) Percentage Increase (Decrease) Financial Measurements: Revenues (1) $ 514,746 $ 481,782 $ 32,964 7 % Gross contribution (1) $ 181,501 $ 189,834 $ (8,333) (4) % Gross contribution margin 35 % 39 % (4) points — Business Measurements: Backlog (1), (2) $ 162,100 $ 134,500 $ 27,600 21 % Average billable headcount 934 827 107 13 % Consultant utilization 65 % 70 % (5) points — (1) Dollars in thousands.
We re-launched in-person destination conferences during the second quarter of 2022 and expect to hold in-person destination conferences in future periods as conditions permit. We held 25 in-person destination conferences and 16 virtual conferences during the year ended December 31, 2022. We held 39 virtual conferences during the year ended December 31, 2021.
We held 47 in-person destination conferences during the year ended December 31, 2023. We held 25 in-person conferences and 16 virtual conferences during the year ended December 31, 2022. The increase in revenues for the year ended December 31, 2023 was primarily due the increase in in-person destination conferences.
GBS client retention was 89% and 87% as of December 31, 2022 and 2021, respectively, while wallet retention was 112% and 115% as of December 31, 2022 and 2021, respectively. 26 Conferences The Year Ended December 31, 2022 The Year Ended December 31, 2021 Increase (Decrease) Percentage Increase (Decrease) Financial Measurements: Revenues (1) $ 389,273 $ 214,449 $ 174,824 82 % Gross contribution (1) $ 210,726 $ 133,748 $ 76,978 58 % Gross contribution margin 54 % 62 % (8) points — Business Measurements: Number of destination conferences (2) 41 39 2 5 % Number of destination conferences attendees (2) 60,104 57,145 2,959 5 % (1) Dollars in thousands.
The decrease in GTS and GBS wallet retention was largely due to lower levels of incremental spending by existing clients compared to the same period in 2022. 26 Conferences The Year Ended December 31, 2023 The Year Ended December 31, 2022 Increase (Decrease) Percentage Increase (Decrease) Financial Measurements: Revenues (1) $ 505,164 $ 389,273 $ 115,891 30 % Gross contribution (1) $ 253,739 $ 210,726 $ 43,013 20 % Gross contribution margin 50 % 54 % (4) points — Business Measurements: Number of destination conferences (2) 47 41 6 15 % Number of destination conferences attendees (2) 75,569 60,104 15,465 26 % (1) Dollars in thousands.
The increase in gross contribution margin during 2022 was primarily due to the increase in revenue. Backlog increased by $26.7 million, or 24%, from December 31, 2021 to December 31, 2022.
The decrease in gross contribution margin during 2023 was primarily due to increased personnel expense related to higher headcount, partially offset by the increase in revenue. Backlog increased by $27.6 million, or 21%, from December 31, 2022 to December 31, 2023. LIQUIDITY AND CAPITAL RESOURCES 27 We finance our operations through cash generated from our operating activities and borrowings.
Provision for income taxes was $219.4 million and $176.3 million during 2022 and 2021, respectively, with an effective income tax rate of 21.4% and 18.2% for 2022 and 2021, respectively. The 2021 effective tax rate includes a benefit of approximately $54.1 million from intercompany sales of certain intellectual property, while no such benefit occurred in 2022.
Provision for income taxes was $264.7 million and $219.4 million during 2023 and 2022, respectively, with an effective income tax rate of 23.1% and 21.4% for 2023 and 2022, respectively. The increase in the effective income tax rate in 2023 was primarily the result of changes in unrecognized tax benefits year over year.
The increase from 2021 to 2022 was the result of increased capital expenditures primarily due to higher capitalized software and computer equipment additions, partially offset by lower spending on acquisitions. Financing Cash used in financing activities was $1.0 billion and $1.2 billion in 2022 and 2021, respectively.
Investing Cash provided by (used in) investing activities was $54.2 million and $(117.6) million in 2023 and 2022, respectively. The increase from 2022 to 2023 was primarily the result of the proceeds received from the sale of our TalentNeuron business in February 2023. Financing Cash used in financing activities was $0.6 billion and $1.0 billion in 2023 and 2022, respectively.
Note 6 — Debt in the Notes to Consolidated Financial Statements provides additional information regarding the Company’s outstanding debt obligations. Off-Balance Sheet Arrangements Through December 31, 2022, the Company has not entered into any material off-balance sheet arrangements or transactions with unconsolidated entities or other persons.
Such transactions, if any, depend on prevailing market conditions, our liquidity and capital requirements, contractual restrictions, and other factors, and may involve material amounts. Off-Balance Sheet Arrangements Through December 31, 2023, the Company has not entered into any material off-balance sheet arrangements or transactions with unconsolidated entities or other persons.
Through custom analysis and on-the-ground support we enable optimized technology investments and stronger performance on our clients’ mission critical priorities. Recent Events The invasion of Ukraine by Russia and the sanctions and other measures being imposed in response to this conflict have increased the level of economic and political uncertainty.
Through custom analysis and on-the-ground support we enable optimized technology investments and stronger performance on our clients’ mission critical priorities. Recent Event In February 2023, we completed the sale of a non-core business, TalentNeuron, for approximately $161.1 million after considerations of post-close adjustments.
Contract value increased to $4.7 billion at December 31, 2022, or 12% compared to December 31, 2021 on a foreign currency neutral basis. All industry sectors grew at double-digit rates, other than technology and media, which grew at high single digit rates. The fastest growth was in the transportation, retail and manufacturing sectors.
The gross contribution margin was 74% in both 2023 and 2022, as the increase in revenue and decreased research program expenses were offset by an increase in personnel expenses to support future growth. Contract value increased to $4.8 billion at December 31, 2023, or 8% compared to December 31, 2022 on a foreign currency neutral basis.
Removed
References to “Gartner,” the “Company,” “we,” “our” and “us” in this MD&A are to Gartner, Inc. and its consolidated subsidiaries.
Added
In addition, historical, current and forward-looking sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future.
Removed
In March 2022, we began winding down our business in Russia. Russia has not composed a material portion of our consolidated revenues, net income, net assets or workforce. We do not have a business in Ukraine.
Added
Readers should not place undue reliance on these forward-looking statements, which reflect management’s opinion only as of the date on which they were made.
Removed
Other impacts due to this evolving situation are currently unknown and could subject our business to materially adverse consequences should the situation escalate or cause an expansion of economic disruption beyond its current scope to the rest of Europe, where a material portion of our business is carried out.
Added
TalentNeuron was included in the Company’s Research segment. $161.1 million cash was received from the sale during the year ended December 31, 2023.
Removed
A prolonged disruption may adversely affect our business operations, financial performance and results of operations. Inflation rates, particularly in North America and Europe, have increased significantly in the past year. Inflation has not had a material effect on our business operations, financial performance and results of operations, other than its impact on the general economy.
Added
Gain from sale of divested operation was attributable to the sale of our TalentNeuron business in February 2023. We recognized a pre-tax gain of $135.4 million during the year ended December 31, 2023. Operating income was $1.2 billion and $1.1 billion during 2023 and 2022, respectively.
Removed
However, if our costs, in particular personnel-related costs, were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases in future periods. Our inability or failure to realize these offsets could adversely affect our business operations, financial performance and results of operations.
Added
The increase in net income during 2023 was primarily the result of the gain from sale of divested operations, as well as increased revenue and interest income, partially offset by increased operating expenses, a lower gain from de-designated interest rate swaps and higher income tax expense.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeA measure of the potential impact of foreign currency translation can be determined through a sensitivity analysis of our cash and cash equivalents. At December 31, 2022, we had $698.0 million of cash and cash equivalents, with a substantial portion denominated in foreign currencies.
Biggest changeA measure of the potential impact of foreign currency translation can be determined through a sensitivity analysis of our cash and cash equivalents. At December 31, 2023, we had $1.3 billion of cash and cash equivalents, with a substantial portion denominated in foreign currencies.
Our outstanding foreign currency forward exchange contracts as of December 31, 2022 had an immaterial net unrealized gain. CREDIT RISK Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of short-term, highly liquid investments classified as cash equivalents, fees receivable, interest rate swap contracts and foreign currency forward exchange contracts.
Our outstanding foreign currency forward exchange contracts as of December 31, 2023 had an immaterial net unrealized gain. CREDIT RISK Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of short-term, highly liquid investments classified as cash equivalents, fees receivable, interest rate swap contracts and foreign currency forward exchange contracts.
However, we reduce our overall exposure to interest rate increases through our interest rate swap contract, which effectively convert the floating base interest rates on all of our variable rate borrowings to fixed rates. FOREIGN CURRENCY RISK A significant portion of our revenues are typically derived from sales outside of the United States.
However, we reduce our overall exposure to interest rate increases through our interest rate swap contract, which effectively converts the floating base interest rates on all of our variable rate borrowings to fixed rates. FOREIGN CURRENCY RISK A significant portion of our revenues are typically derived from sales outside of the United States.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. INTEREST RATE RISK As of December 31, 2022, the Company had $2.5 billion in total debt principal outstanding. Note 6 — Debt in the Notes to Consolidated Financial Statements provides additional information regarding the Company’s outstanding debt obligations.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. 29 INTEREST RATE RISK As of December 31, 2023, the Company had $2.5 billion in total debt principal outstanding. Note 6 — Debt in the Notes to Consolidated Financial Statements provides additional information regarding the Company’s outstanding debt obligations.
Approximately $282.0 million of the Company’s total debt outstanding as of December 31, 2022 was based on a floating base rate of interest, which potentially exposes the Company to increases in interest rates.
Approximately $274.0 million of the Company’s total debt outstanding as of December 31, 2023 was based on a floating base rate of interest, which potentially exposes the Company to increases in interest rates.
If the exchange rates of the foreign currencies we hold all changed in comparison to the U.S. dollar by 10%, the amount of cash and cash equivalents we would have reported on December 31, 2022 could have increased or decreased by approximately $42.9 million.
If the exchange rates of the foreign currencies we hold all changed in comparison to the U.S. dollar by 10%, the amount of cash and cash equivalents we would have reported on December 31, 2023 could have increased or decreased by approximately $79.3 million.

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