Gartner's Q3 Net Income Plunges 91% on $150M Goodwill Impairment

TL;DR

Gartner's Q3 earnings are a disaster, with a massive goodwill impairment wiping out profits and signaling potential trouble ahead; sell now.

AI Summary

Gartner Inc. (IT) reported a significant decline in net income for the three and nine months ended September 30, 2025, primarily due to a substantial goodwill impairment charge. Net income for the three months plummeted to $35.357 million from $415.049 million in the prior year, a decrease of 91.5%. For the nine months, net income fell to $487.079 million from $855.142 million, a 43.0% reduction. This was largely driven by a $150 million goodwill impairment recognized in the third quarter of 2025. Total revenues saw a modest increase, rising 2.7% to $1.524 billion for the three months and 4.2% to $4.744 billion for the nine months, primarily from its 'Insights' segment, which grew 5.1% to $1.270 billion for the quarter. However, 'Other' revenues decreased by 22.7% to $55.221 million for the quarter. The company also saw a significant increase in treasury stock purchases, totaling $1.492 billion for the nine months ended September 30, 2025, compared to $633.377 million in the prior year, leading to a substantial reduction in total stockholders' equity from $1.359 billion to $556.552 million. Cash and cash equivalents decreased by $562.964 million during the nine-month period.

Why It Matters

This filing reveals a sharp decline in Gartner's profitability, largely due to a significant goodwill impairment, which could signal underlying issues with the valuation of past acquisitions or a tougher market outlook for certain business segments. For investors, the drastic reduction in net income and stockholders' equity, coupled with aggressive share repurchases, raises questions about capital allocation efficiency and future earnings stability. Employees might face increased scrutiny on performance, especially in underperforming segments like 'Other' which saw a revenue decline. Competitors in the business and technology insights space could view this as an opportunity to gain market share if Gartner's strategic investments are faltering.

Risk Assessment

Risk Level: high — The risk level is high due to the $150 million goodwill impairment charge in Q3 2025, which directly led to a 91.5% drop in net income for the quarter. This impairment suggests a significant re-evaluation of asset values, potentially indicating a deterioration in the expected future cash flows of acquired businesses. Additionally, the substantial decrease in total stockholders' equity from $1.359 billion to $556.552 million, partly driven by $1.492 billion in treasury stock purchases, indicates aggressive capital deployment that has not translated into improved financial performance, increasing financial leverage and reducing the equity cushion.

Analyst Insight

Investors should consider reducing their exposure to Gartner (IT) given the significant goodwill impairment and sharp decline in net income. Re-evaluate the company's long-term growth prospects and the sustainability of its current capital allocation strategy, especially the aggressive share repurchases amidst declining profitability.

Financial Highlights

debt To Equity

12.02

revenue

$1.524B

operating Margin

5.67%

total Assets

$7.249B

total Debt

$2.462B

net Income

$35.357M

eps

$0.47

gross Margin

68.43%

cash Position

$1.430B

revenue Growth

+2.7%

Revenue Breakdown

Key Numbers

• $35.357M — Net Income (Q3 2025) (Decreased 91.5% from $415.049M in Q3 2024)
• $150M — Goodwill Impairment (Recognized in Q3 2025, a significant new expense)
• $1.524B — Total Revenues (Q3 2025) (Increased 2.7% from $1.484B in Q3 2024)
• $1.270B — Insights Revenue (Q3 2025) (Increased 5.1% from $1.209B in Q3 2024)
• $55.221M — Other Revenues (Q3 2025) (Decreased 22.7% from $71.384M in Q3 2024)
• $1.492B — Treasury Stock Purchases (9M 2025) (Increased from $633.377M in 9M 2024, significantly reducing equity)
• $556.552M — Total Stockholders' Equity (Sep 30, 2025) (Decreased from $1.359B at Dec 31, 2024)
• $1.430B — Cash and Cash Equivalents (Sep 30, 2025) (Decreased from $1.933B at Dec 31, 2024)
• $0.47 — Diluted EPS (Q3 2025) (Significantly down from $5.32 in Q3 2024)
• 74,987 — Diluted Weighted Average Shares Outstanding (Q3 2025) (Decreased from 77,968 in Q3 2024 due to repurchases)

Key Players & Entities

• Gartner, Inc. (company) — Registrant
• New York Stock Exchange (regulator) — Exchange where Common Stock is registered
• SEC (regulator) — U.S. Securities and Exchange Commission
• $150,000 (dollar_amount) — Goodwill impairment for the three and nine months ended September 30, 2025
• $35,357 (dollar_amount) — Net income for the three months ended September 30, 2025
• $415,049 (dollar_amount) — Net income for the three months ended September 30, 2024
• $1,524,072 (dollar_amount) — Total revenues for the three months ended September 30, 2025
• $1,484,306 (dollar_amount) — Total revenues for the three months ended September 30, 2024
• $1,492,678 (dollar_amount) — Purchases of treasury stock for the nine months ended September 30, 2025
• $556,552 (dollar_amount) — Total Stockholders' Equity at September 30, 2025

FAQ

Risk Factors

• Goodwill Impairment [high — financial]: The company recognized a $150 million goodwill impairment charge in Q3 2025. This significantly impacted net income and reflects a decline in the value of acquired assets.
• Reduced Stockholders' Equity [high — financial]: Aggressive treasury stock purchases totaling $1.492 billion in 9M 2025, compared to $633.377 million in 9M 2024, have drastically reduced total stockholders' equity from $1.359 billion to $556.552 million.
• Decreased Cash Position [medium — financial]: Cash and cash equivalents decreased by $562.964 million during the nine-month period, ending at $1.430 billion as of September 30, 2025, down from $1.933 billion at year-end 2024.
• Revenue Concentration [medium — operational]: While total revenues grew 2.7% to $1.524 billion in Q3 2025, the 'Other' revenue segment experienced a significant 22.7% decline. The 'Insights' segment remains the primary growth driver.
• Intangible Asset Value [medium — market]: The company holds substantial goodwill ($2.79 billion) and intangible assets ($357 million). Any future economic downturn or underperformance of acquired businesses could lead to further impairments.
• Increased Leverage Potential [low — financial]: While debt levels appear stable, the significant reduction in equity could increase the company's debt-to-equity ratio if debt levels were to increase, potentially impacting borrowing costs.

Industry Context

Gartner operates in the IT research and advisory sector, a market characterized by high demand for data-driven insights and strategic guidance. The industry is competitive, with players differentiating through the depth of their research, client engagement models, and specialized advisory services. Trends include a growing need for digital transformation expertise and AI-driven analytics.

Regulatory Implications

As a publicly traded company, Gartner is subject to SEC regulations and accounting standards. The goodwill impairment charge and significant equity reduction require clear disclosure to investors. Any future accounting changes or regulatory scrutiny on revenue recognition or asset valuations could pose risks.

What Investors Should Do

1. Monitor Goodwill and Intangible Assets
2. Analyze Share Repurchase Strategy
3. Evaluate Revenue Diversification
4. Scrutinize Operating Margins

Key Dates

• 2025-09-30: End of Q3 2025 — Reported significant net income decline due to goodwill impairment and substantial treasury stock purchases.
• 2025-09-30: Balance Sheet Date — Total Stockholders' Equity significantly reduced to $556.552 million from $1.359 billion at year-end 2024.
• 2025-09-30: Statement of Operations Date — Total revenues increased 2.7% to $1.524 billion, but net income dropped 91.5% to $35.357 million.
• 2024-12-31: Previous Fiscal Year End — Provided the comparative baseline for equity and cash positions at the start of 2025.

Glossary

Goodwill impairment

A charge taken when the carrying value of goodwill on the balance sheet is deemed to be higher than its fair value, indicating a loss in value of an acquired business. (A $150 million charge significantly reduced net income in Q3 2025.)

Treasury stock

Shares of a company's own stock that have been repurchased from the open market. (Aggressive purchases of treasury stock in 2025 led to a substantial decrease in stockholders' equity.)

Stockholders' Equity

The residual interest in the assets of an entity after deducting all its liabilities. It represents the net worth of the company. (Significantly decreased due to share repurchases, impacting the company's financial leverage ratios.)

Diluted EPS

Earnings per share calculated using the weighted average number of outstanding shares, including dilutive potential common shares. (Reported at $0.47 for Q3 2025, a sharp decline from $5.32 in the prior year, reflecting lower net income.)

Deferred revenues

Revenue that has been received by the company but not yet earned, typically from services to be provided in the future. (Represents a significant liability ($2.53 billion), indicating future service obligations.)

Year-Over-Year Comparison

Compared to the prior year's comparable periods, Gartner Inc. reported a significant 91.5% decrease in net income for Q3 2025, largely due to a $150 million goodwill impairment charge. While total revenues saw a modest 2.7% increase to $1.524 billion, driven by the 'Insights' segment, the 'Other' revenue segment declined sharply. The company's balance sheet shows a dramatic reduction in total stockholders' equity from $1.359 billion to $556.552 million, primarily resulting from a substantial increase in treasury stock purchases, which more than doubled year-over-year for the nine-month period.

Filing Documents

• it-20250930.htm (10-Q) — 1558KB
• ex32-byxlawsofgartnerinc_o.htm (EX-3.2) — 209KB
• it-09302025xex311.htm (EX-31.1) — 10KB
• it-09302025xex312.htm (EX-31.2) — 10KB
• it-09302025xex32.htm (EX-32) — 7KB
• 0000749251-25-000082.txt ( ) — 8583KB
• it-20250930.xsd (EX-101.SCH) — 40KB
• it-20250930_cal.xml (EX-101.CAL) — 61KB
• it-20250930_def.xml (EX-101.DEF) — 218KB
• it-20250930_lab.xml (EX-101.LAB) — 566KB
• it-20250930_pre.xml (EX-101.PRE) — 415KB
• it-20250930_htm.xml (XML) — 1616KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

FINANCIAL STATEMENTS (Unaudited)

ITEM 1. FINANCIAL STATEMENTS (Unaudited) Condensed Consolidated Balance Sheets at September 30, 2025 and December 31, 2024 3 Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2025 and 2024 4 Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2025 and 2024 5 Condensed Consolidated Statements of Changes in Stockholders' Equity for the Three and Nine Months Ended September 30, 2025 and 2024 6 Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024 8 Notes to Condensed Consolidated Financial Statements 9

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 28

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 41

CONTROLS AND PROCEDURES

ITEM 4. CONTROLS AND PROCEDURES 42

OTHER INFORMATION

PART II. OTHER INFORMATION

LEGAL PROCEEDINGS

ITEM 1. LEGAL PROCEEDINGS 43

RISK FACTORS

ITEM 1A. RISK FACTORS 43

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 43

OTHER INFORMATION

ITEM 5. OTHER INFORMATION 43

EXHIBITS

ITEM 6. EXHIBITS 45 2

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS GARTNER, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (Unaudited; in thousands, except share data) September 30, December 31, 2025 2024 Assets Current assets: Cash and cash equivalents $ 1,430,730 $ 1,933,147 Fees receivable, net of allowances of $ 5,000 and $ 8,500 , respectively 1,120,487 1,696,225 Deferred commissions 301,875 413,914 Prepaid expenses and other current assets 209,671 153,245 Total current assets 3,062,763 4,196,531 Property, equipment and leasehold improvements, net 248,946 242,968 Operating lease right-of-use assets 227,696 257,419 Goodwill 2,789,923 2,930,205 Intangible assets, net 357,033 409,689 Other assets 562,705 497,859 Total Assets $ 7,249,066 $ 8,534,671 Liabilities and Stockholders' Equity Current liabilities: Accounts payable and accrued liabilities $ 957,946 $ 1,206,089 Deferred revenues 2,531,532 2,762,927 Current portion of long-term debt 732 — Total current liabilities 3,490,210 3,969,016 Long-term debt, net of deferred financing fees 2,462,308 2,459,915 Operating lease liabilities 293,536 339,779 Other liabilities 446,460 406,792 Total Liabilities 6,692,514 7,175,502 Stockholders' Equity Preferred stock, $ 0.01 par value, 5,000,000 shares authorized; none issued or outstanding — — Common stock, $ 0.0005 par value, 250,000,000 shares authorized; 163,602,067 shares issued for both periods 82 82 Additional paid-in capital 2,640,460 2,497,130 Accumulated other comprehensive loss, net ( 36,245 ) ( 88,333 ) Accumulated earnings 6,480,086 5,993,007 Treasury stock, at cost, 90,689,017 and 86,222,214 common shares, respectively ( 8,527,831 ) ( 7,042,717 ) Total Stockholders' Equity 556,552 1,359,169 Total Liabilities and Stockholders' Equity $ 7,249,066 $ 8,534,671 See the accompanying notes to Condensed Consolidated Financial Statements. 3 GARTNER, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Operations (Unaudited; in thousands, e

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