IT Research and Advisory · Subscriptions · Enterprise IT · Events · Thesis updated August 5, 2026

Early signs of stabilization as government contract values recover

Contract value growth accelerated 70 basis points from Q1 to 2% year-over-year in Q2 2026.
The previously struggling government segment returned to positive contract value growth in Q2.
Wallet retention improved sequentially across both GTS and GBS as downsell stabilized.
Management maintains a target of more than 12% adjusted EPS CAGR over the next three years.
Conferences revenue increased 15% in Q2 2026, while Consulting revenue decreased 9%.

01 Running thesis

Recovery starts to show up

Gartner is in a prove-it period. Q2 2026 showed early signs of stabilization. Contract value growth accelerated 70 basis points from Q1 to 2% year-over-year. Importantly, the government segment returned to positive contract value growth.

The bull case rests on continued contract value acceleration. Management says growth should speed up through 2026 as the company laps the federal headwind. It also gave a medium-term target of more than 12% adjusted EPS CAGR.

The bear case remains focused on wallet retention and macro pressure. Wallet retention improved sequentially across GTS and GBS as downsell stabilized, but GTS is still at 97%. Extended sales cycles and budget scrutiny continue to drag on new business.

The next few quarters carry the test. Q3 and Q4 must show evidence of continued contract value growth acceleration and further improvement in wallet retention. If contract value stalls, the recovery story loses support.

Aug 2026▲Q2 2026 contract value growth accelerated to 2% year-over-year, and the government segment returned to positive growth. Wallet retention improved sequentially.

May 2026→Q1 2026 contract value grew only 1%, but management said growth should accelerate through the rest of 2026. Wallet retention stabilized at low levels rather than getting worse.

May 2026▼The Q1 2026 Form 10-Q showed GTS wallet retention of 97% and GBS wallet retention of 98%, both below the prior year. Consulting revenue also fell 15% and backlog fell 9%.

Feb 2026▼The FY2025 Form 10-K showed only 1% contract value growth for the year and added a specific generative AI risk. The filing also confirmed lower spending from existing clients.

Feb 2026→Q4 2025 results quantified the U.S. federal drag, with total contract value growth of 1% versus 4% outside the U.S. federal government. Management also framed 2026 as a transition year for the Insights business.

Nov 2025▲Management said the selling environment had improved modestly and that the pipeline was up double digits. The bull case gained a path to faster 2026 contract value growth.

Nov 2025▼The Q3 2025 Form 10-Q showed federal contract value retention below 50% year to date. It also noted a $150 million goodwill impairment in Digital Markets.

Aug 2025→Management named U.S. federal spending cuts and tariff-related customer caution as the main growth headwinds. AskGartner was rolled out to all users, adding a possible product catalyst.

02 Business model

Paid before the advice arrives

Gartner mostly sells subscriptions to research, tools, and analyst access. Many Insights customers pay in advance. That gives Gartner cash before all the service is delivered, which is why the model can produce strong operating cash flow.

The best part of the model is scale. Once Gartner pays for analysts, data, salespeople, and tools, selling more access can carry strong incremental profit.

The weak point is renewal behavior. If clients renew at smaller dollar amounts, contract value slows. That is what the recent wallet retention figures are warning about. The company can keep many clients but make less money per client.

Conferences and Consulting add other ways to sell Gartner knowledge. Conferences depend on event demand and exhibitor spending. Consulting is more project-based, so it can swing faster when clients delay work.

03 Product portfolio

Research, access, rooms, and projects

Cash cow

Business and Technology Insights

This is Gartner's main subscription engine. It gives executives research, benchmarks, tools, and access to experts for key decisions.

Steady

Global Technology Sales

GTS sells Insights to technology users and technology providers. Wallet retention improved sequentially in Q2 2026 but remains at 97%.

Growth engine

Global Business Sales

GBS sells Insights to non-technology functions and leaders. Wallet retention improved to 99% in Q2 2026.

Option

AskGartner

AskGartner is the generative AI tool available to all users. It could make research easier to use, but raises quality and trust risks.

Steady

Conferences

Gartner runs events such as Symposium/Xpo. Q2 2026 Conferences revenue increased 15%.

Option

Consulting

Consulting provides custom analysis and on-the-ground support. Q2 2026 revenue fell 9%.

04 Business segments

Insights still dominates

Insights86%flat

Conferences5%modest

Consulting8%declining

Other1%declining

Segment mix uses Q1 2026 revenue from Gartner's Form 10-Q. Other revenue came from Digital Markets, which Gartner sold in February 2026.

05 Risk factors

What can break the rebound

Contract value acceleration stalls

High impact · Medium odds

While Q2 2026 contract value accelerated slightly to 2%, the recovery remains fragile. If macro and geopolitical uncertainty continues to drag on new business, the guided acceleration could stall.

We watchQ3 and Q4 2026 total contract value growth.

Wallet retention stays below historical norms

High impact · Medium odds

GTS wallet retention sits at 97% and GBS wallet retention stabilized at 99% in Q2 2026. These figures are still below historical norms. If management cannot lift these metrics, overall growth will remain muted.

We watchGTS and GBS wallet retention rates in upcoming quarters.

Enterprise budget caution limits new sales

Medium impact · Medium odds

Management cited persistent macro and geopolitical headwinds causing budget scrutiny and delayed decision-making. Extended sales cycles can continue to drag on new business growth.

We watchManagement commentary on sales cycles and new enterprise business.

AI weakens the value of Gartner research

Medium impact · Medium odds

Gartner's FY2025 10-K added a specific generative AI risk. Third-party AI could reduce demand for Gartner products, and clients could put proprietary Gartner content into large language models.

We watchClient usage of AskGartner and signs that customers replace paid research with outside AI tools.

Consulting segment stays soft

Medium impact · High odds

Consulting revenue fell 9% in Q2 2026. This segment continues to face headwinds. While smaller than Insights, prolonged weakness can still hurt reported overall growth and margins.

We watchConsulting revenue and backlog trends.

06 Quick answers

In one breath

What does Gartner actually sell?

Gartner sells research, tools, expert access, events, and consulting to executives. Its largest business is Insights, a subscription service for business and technology decision makers.

Why is contract value important for Gartner?

Contract value is the annual value of active subscription contracts. It is a key health signal because it points to future recurring revenue in the Insights business.

Why are investors worried about Gartner right now?

Growth has slowed, partly because of U.S. federal government spending cuts. Investors are also watching wallet retention, since existing clients are spending less than they did last year.

How could AI affect Gartner?

AI could help Gartner by making its research easier to access through tools like AskGartner. It could also hurt Gartner if clients use outside AI tools instead of paid research, or if Gartner's AI gives bad answers.