>>> Gartner (NYSE: IT) is known for its research and consulting services, and the company works with businesses across 90 countries and territories around the globe. The company's Magic Quadrant report has become an industry standard for businesses in the tech space to look at competitors in a particular market and strategize their own growth approach.
Gartner makes money in several different ways. Its research segment is its largest source of revenue growth and is subscription-based. Most contracts are at least 12 months long, and roughly 70% are multiyear, giving the company predictable sources of recurring revenue. This segment delivers the research content and data-driven analysis that organizations of all sizes around the world use to align their business vision and streamline operations.
Gartner's second stream of revenue is from the conferences that it holds for information technology and business executives. Finally, Gartner makes money from consulting services provided to chief information officers and other senior executives at various companies.
Revenue from Gartner's research division is recognized over the term of the specific contract. Revenue from its conference division is recognized once the meeting or conference is completed. Consulting revenues often derive from fixed fees or are delivered as those specific services are provided.
To give readers an idea of the breakdown of Gartner's revenue sources as they translate to its overall balance sheet, in the full year 2023, the company reported just shy of $6 billion in total revenue. That was a nice 8% bump compared to the full year 2022. Of that total revenue amount, about $4.9 billion was derived from its subscription-based research segment, while conference revenue totaled $505.2 million and consulting revenue $514.7 million.
Gartner is a profitable company. Last year, the company brought in a total net income of about $883 million, up 9% from the prior 12-month period. Fast-forward to the first quarter of 2024, and the company brought in profits of $211 million on revenue of about $1.5 billion. That revenue figure was up about 5% one year ago, even though net income was down year over year.
The company is also consistently cash-flow positive. Gartner brought in an operating cash flow of $189 million in Q1 and a free cash flow of $166 million. Those two figures were up 15% and 16% from one year ago. Gartner's leadership in the technological research and consulting space has given it a considerable footprint in a vast total addressable market that management estimates is in the region of $200 billion. Shares are up about 30% from one year ago, and some investors might want to take a second look before they possibly edge higher.
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