Good morning everyone. Welcome to Gartner's second quarter 2022 earnings call. At this time, all participants are in a listen-only mode. After comments by Gene Hall, Gartner's Chief Executive Officer, and Craig Safian, Gartner's Chief Financial Officer, there will be a question-and-answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require further assistance, press star zero. This call will include a discussion of second quarter 2022 financial results and Gartner's updated outlook for 2022, as disclosed in today's earnings release and earnings supplement, both posted to our website, investor.gartner.com. On the call, unless stated otherwise, all references to EBITDA are for adjusted EBITDA, with the adjustments as described in our earnings release and supplement. All growth rates in Eugene's comments are FX neutral unless stated otherwise. All references to share counts are for fully diluted weighted average share counts unless stated otherwise. Reconciliations for all non-GAAP numbers we use are available in the investor relations section of the Gartner.com website. Finally, all contract values and associated growth rates we discuss are based on 22 foreign exchange rates unless stated otherwise. As set forth in more detail in today's earnings release, certain statements made on this call may constitute forward-looking statements. Forward-looking statements can vary materially from actual results and are subject to a number of risks and uncertainties, including those contained in the company's 2021 annual report on Form 10-K and quarterly reports on Form 10-Q, as well as in other filings with the SEC. I encourage all of you to review the risk factors listed in these documents. Now, I'll turn the call over to Gartner's Chief Executive Officer, Gene Hall. Good morning. Thanks for joining us. Gartner had a strong performance in the second quarter. We delivered double-digit growth in contract value, revenue, EBITDA, and EPS. We continue to return excess capital to our shareholders through our buyback programs. Research continues to be our largest and most profitable segment. Gartner Research provides actual objective insight to executives and their teams across all major enterprise functions in every industry around the world. Our expert guidance and tools enable faster, smarter decisions and stronger performance on our clients' mission-critical priorities. We continue to have a vast market opportunity across all sectors, sizes, and geographies, and we're delivering more value than ever. The rate of change in the world is the fastest I've ever seen. Against this backdrop, Gartner continues to get even more agile. We're generating new insights to address timely and pressing issues, such as leveraging emerging technologies, optimizing costs, attracting and retaining talent in a hybrid world, managing cybersecurity risk, and more. We deliver incredible value, whether our clients are thriving, struggling, or somewhere in between. As a result, demand for our services remains strong. Q2 research revenue grew 17% in the second quarter. Total contract value growth was 15%. Retention remained very strong, and new business was near all-time highs. We're also growing our sales teams. Global technology sales headcount was up 9%, and global business sales headcount was up 17% year-over-year. Global technology sales, or GTS, serves leaders and their teams within IT. GTS contract value grew 14%. Global business sales, or GBS, serves leaders and their teams beyond IT. This includes HR, supply chain, finance, marketing, sales, legal, and more. GBS contract value grew 23%. Across every function, IT, supply chain, marketing, sales, HR, finance, and more, leaders and their teams benefit from our incredible value proposition. As a result, the enterprises we support see measurable progress on their mission-critical priorities. Leveraging the extraordinary value of our research insights, our conferences business brings the power of Gartner to life for an engaged and highly qualified audience. During Q2, we delivered our first in-person destination conferences since the start of the pandemic. These conferences covered IT, finance, and supply chain in Europe, Australia, and the U.S. Attendee feedback has been resoundingly positive. They deeply value the opportunity to connect, engage, and learn in person. Bookings continue at a strong pace for both exhibitors and attendees. Gartner Consulting is an extension of Gartner Research. Consulting helps clients execute their most strategic technology initiatives through deeper extended project-based work. Consulting had a strong quarter with revenue up 20%. Bookings were also strong, driving backlog up 45%. In closing, we saw strong growth across the business. We continued to generate significant free cash flow well in excess of net income. We returned excess capital to shareholders, which reduced our shares outstanding. Looking ahead, we are well positioned for strong double-digit top-line growth. Our underlying margins are in the low 20s%, well above pre-pandemic levels, and we expect them to modestly increase over time. We continue to generate free cash flow well in excess of earnings, which we will deploy to further drive shareholder value. With that, I'll hand the call over to our Chief Financial Officer, Craig Safian. Craig? Thank you Gene Hall, and good morning. Second quarter results were strong, with double-digit growth in contract value, revenue, and adjusted EPS. With results above our expectations, we are again increasing our 2022 guidance. The improved outlook reflects the better-than-expected second quarter top-line results, strong demand for second-half conferences, and a successful balance between cost discipline and investing for future growth. Second quarter revenue was $1.4 billion, up 18% year-over-year as reported, and 22% FX neutral. In addition, total contribution margin was 69%, down 70 basis points versus the prior year as costs returned towards normal. EBITDA was $389 million, up 10% year-over-year and up 14% FX neutral. Adjusted EPS was $2.85, up 27%. Free cash flow in the quarter was $395 million. Adjusting for insurance proceeds received last year, free cash flow is down 2% year-over-year for the quarter and up 5% on a rolling four-quarter basis. Research revenue in the second quarter grew 14% year-over-year as reported, and 17% on an FX neutral basis, driven by our strong contract value growth. Second quarter research contribution margin was 74%, about in line with 2021. Higher than normal contribution margins reflect improved operational effectiveness, increased scale, continued temporary avoidance of travel expenses, and continuing to catch up on headcount to support the research business. Contract value, or CV, was $4.3 billion at the end of the second quarter, up 15% versus the prior year. As we discussed previously CV reflects our decision to exit the Russian market, which contributed about $13 million in the second quarter of 2021. This reduced the headline growth by about 40 basis points. Quarterly net contract value increase, or NCVI, was $97 million. Quarterly NCVI is a helpful way to measure contract value performance in the quarter, even though there is notable seasonality in this metric. The sequential increase in CV of $97 million was driven by the combination of continued strong retention rates and near record new business of close to $250 million. We saw broad-based CV growth across all of our practices. Our technology practice grew 14% and all of our business practices grew at double-digit growth rates, with many of them growing more than 20% year-over-year. From an industry perspective, retail, media and manufacturing led our CV growth. Global technology sales contract value was $3.4 billion at the end of the second quarter, up 14% versus the prior year. GTS had quarterly NCVI of $60 million, driven by strong retention and near record levels of new business for a second quarter. While retention for GTS was 107% for the quarter, up about 530 basis points year-over-year and near record levels. GTS new business was down 1% versus last year, up against a very tough compare. The two-year compound annual growth rate was about 16%. GTS quota-bearing headcount was up 9% year-over-year. We are on track to get to double-digit growth by the end of 2022, as we have successfully brought turnover down and our investments in recruiting are delivering results. We will continue to invest in our sales team to drive long-term sustained double-digit growth while also delivering strong margins. A regular full set of GTS metrics can be found in the appendix of our earnings supplement. Global business sales contract value was $936 million at the end of the second quarter, up 23% year-over-year, which is above the high end of our medium-term outlook of 12%-16%. GBS CV increased $37 million from the first quarter. While retention for GBS was 115% for the quarter, up about 5 percentage points year-over-year. GBS new business was up 3% compared to last year, reflecting robust growth across the full portfolio and against a very strong compare. The two-year compound annual growth rate for new business was 35%. GBS quota-bearing headcount increased 17% year-over-year. Headcount we hire in 2022 will help to position us for sustained double-digit growth in the future. As with GTS, our regular full set of GBS metrics can be found in the appendix of our earnings supplement. Conferences revenue for the second quarter was $114 million, ahead of our expectations as attendees and exhibitors enthusiastically returned to in-person. Contribution margin in the quarter was 65%. We held six in-person conferences and eight virtual conferences in the quarter. We held event meetings in both virtual and in-person formats. We plan to run 19 in-person conferences for the balance of the year. Second quarter consulting revenues increased by 14% year-over-year to $121 million. On an FX neutral basis, revenues were up 20%. Consulting contribution margin was 42% in the second quarter, up 120 basis points versus the prior year, with better than expected revenue, higher utilization rates, and a mixed benefit from strong growth and contract optimization. Labor-based revenues were $95 million, up 11% versus Q2 of last year and up 18% on an FX neutral basis. Backlog at June 30 was $152 million, increasing 45% year-over-year on an FX neutral basis with another strong bookings quarter. The inclusion of multi-year contracts a change we described last quarter, contributed about 12 percentage points to the year-over-year growth rate. Our contract optimization business was up 28% as reported, and 31% on an FX neutral basis versus prior year. As we have detailed in the past, this part of the consulting segment is highly variable. Consolidated cost of services increased 21% year over year in the second quarter as reported, and 25% on an FX neutral basis. The biggest driver of the increase was higher headcount to support our continued strong growth and the return to in-person destination conferences. SG&A increased 24% year over year in the second quarter as reported, and 27% on an FX neutral basis. SG&A increased in the quarter as a result of increased hiring in sales and G&A functions, higher commission expense following strong CV growth in 2021, and a $12 million one-time real estate charge. We expect SG&A expenses to increase as a percentage of revenue over the near term as our catch-up hiring continues. EBITDA for the second quarter was $389 million, up 10% year over year on a reported basis and up 14% FX neutral. Second quarter EBITDA upside to our guidance reflected revenue exceeding our forecast and expenses at the low end of our expectations. Depreciation in the quarter of $23 million was down modestly versus 2021. Net interest expense, excluding deferred financing costs in the quarter, was $29 million, up $2 million versus the second quarter of 2021 due to an increase in total debt balances. The Q2 adjusted tax rate which we use for the calculation of adjusted net income, was 25.7% for the quarter. The tax rate for the items used to adjust net income was 25% for the quarter. Adjusted EPS in Q2 was $2.85, growth of 27% year-over-year. The average share count for the second quarter was 81 million shares. This is a reduction of about 5.6 million shares or about 6.5% year-over-year. We exited the second quarter with about 80 million shares outstanding on an unweighted basis. Operating cash flow for the quarter was $416 million. Adjusting for the insurance proceeds we received in the second quarter of 2021, operating cash flow was down 2% compared to last year. CapEx for the quarter was $21 million up 76% year-over-year as a result of an increase in capitalized software, laptops, and other infrastructure. Free cash flow for the quarter was $395 million. Free cash flow growth continues to be an important part of our business model, with modest CapEx needs and upfront client payments. As many of you know, we generate free cash flow well in excess of net income. Our conversion from EBITDA is very strong, with the differences being cash interest, cash taxes, and modest CapEx, partially offset by strong working capital cash inflows. Adjusting for the insurance proceeds we received last year, free cash flow as a percent of revenue or free cash flow margin was 21% on a rolling four-quarter basis. On the same basis free cash flow was 81% of EBITDA and 146% of GAAP net income. At the end of the second quarter, we had $360 million of cash. Our June 30 debt balance was $2.5 billion. Our reported gross debt to trailing twelve-month EBITDA was under 2x. Our expected free cash flow generation, unused revolver, and excess cash remaining on the balance sheet provide ample liquidity to deliver on our capital allocation strategy of share repurchases and strategic tuck-in M&A. We repurchased around $930 million of stock through the first half of this year. We had about $700 million remaining on our authorization at the end of June. We expect the board to continue to refresh the repurchase authorization as needed going forward. Since the end of 2020 through the end of this June, we have reduced our shares outstanding by 9 million shares. This is a reduction of 11%. As we continue to repurchase shares, we expect our capital base will shrink. This is accretive to earnings per share, and combined with growing profits, also delivers increasing returns on invested capital over time. Our medium-term outlook is for double-digit revenue growth. While margins have been very strong the past two years, we are continuing to catch up hiring and to resume travel spending. We estimate our underlying margins to be in the low 20s, well above pre-pandemic levels, and we expect them to increase modestly over time. We will give 2023 specific guidance in February, consistent with our usual practice. Strong top-line growth modest margin expansion, low capital intensity, and working capital as a source of cash will allow us to deliver strong free cash flow now and in the future. We are increasing our full year guidance to reflect strong Q2 performance and an improved outlook for the second half despite incremental FX headwinds. We now expect an FX impact to our revenue growth rates of about 370 basis points for the full year. This is up from 260 basis points based on rates when we guided in May. As we discussed the last two quarters, 2021 research performance benefited from several factors, including QBH tenure mix, NCVI phasing within the quarters and the year, record retention rates, and strong non-subscription growth. We continue to assume that those benefits do not persist at the same levels through 2022. The growth compares will continue to be challenging as we move through the year. We continue to take a measured approach based on historical trends and patterns, which we've reflected in the updated guidance. For conferences, we assume we will be able to run all the in-person conferences as planned. Consistent with our commentary the past couple of quarters, our assumptions for consolidated expenses continue to reflect significant headcount increases during the year to support current and future growth. We have modeled higher labor costs and T&E well above 2021 levels, as we've previously indicated. We also have higher commission expense during 2022 due to the very good selling performance we delivered in 2021. Finally, we continue to invest in our tech, both client-facing and internal applications, as part of our innovation and continuous improvement programs. Our updated guidance for 2022 is as follows. We expect research revenue of at least $4.575 billion which is FX neutral growth of about 15%. The FX neutral growth is up about 120 basis points from our prior guidance due to strong NCVI performance in the second quarter. We expect conferences revenue of at least $335 million, which is growth of about 63% FX neutral. We expect consulting revenue of at least $440 million, which is growth of about 11% FX neutral. The result is an outlook for consolidated revenue of at least $5.35 billion, which is FX neutral growth of almost 17%. The FX neutral growth is up about 290 basis points from our prior guidance due to strong performance in the second quarter. Without the strengthening US dollar since May, our revenue guidance would have been about $138 million than previous guidance. We now expect full-year EBITDA at least $1.235 billion, up $100 million from our prior guidance, and an increase in our margin outlook as well. Without the strengthening US dollar since May, our EBITDA guidance would have been about $120 million higher than previous guidance. We now expect 2022 adjusted EPS of at least $8.85. For 2022, we now expect free cash flow of at least $985 million. Our guidance is based on 81 million shares outstanding, which reflects year-to-date repurchases. All the details of our full-year guidance are included on our investor relations site. Finally for the third quarter of 2022, we expect to deliver at least $255 million of EBITDA. Our strong performance in 2022 continued in the second quarter with momentum across the business. Contract value growth was very strong at 15%. Adjusted EPS grew 27%, fueled by the significant reduction in shares over the past year. We repurchased around $930 million in stock this year through June and remain committed to returning excess capital to our shareholders. Looking out over the medium term, our financial model and expectations are unchanged. With 12%-16% research CV growth, we will deliver double-digit revenue growth. With gross margin expansion, sales costs growing in line with CV growth and G&A leverage, we can modestly expand margins. We can grow free cash flow at least as fast as EBITDA because of our modest CapEx needs and the benefits of our clients paying us up front. We'll continue to deploy our capital on share repurchases, which will lower the share count over time and on strategic value-enhancing tuck-in M&A. With that, I'll turn the call back over to the Operator, and we'll be happy to take your questions. Operator? Thank you. As a reminder to ask a question, you will need to press star one one on your telephone. Please stand by while we compile the Q&A roster. Our first question from Jeffrey Meuler with Baird. Your line is now open. Yeah thanks. Just first a clarifying question on the underlying margin. When you say low 20s, could that include like 21 or 22? You're not saying like low 20.x%? If we will have a recession at some point, would you expect to be able to at least maintain those underlying margins through a recession, again as well? Hey good morning Jeff. Thanks for the questions. In terms of the underlying margin, no, it wasn't locked in on 20.0% as low 20s%. Yeah, as we've looked at the business over the last few years, you know, we've learned a lot through the pandemic, et c. We're now comfortable that the underlying margins of the business are in the low 20s%. We can grow the top line double-digit growth rates into the future, and we can modestly expand margins from that point as well. In terms of the reset- Including- Yeah go ahead. Yeah I was just gonna say, including maintain at least that margin in a recession. Yes. That was the second part of the question. You know, again, the way you know we are thinking about running the business is, you know, again, we believe that there still is a huge untapped market opportunity. We believe one of the ways that we go capture that untapped market opportunity is by continuing to grow the sales force and again, making sure we've got the right insights and the right number of analysts and advisors, et c. If there were to be a recessionary impact on the business, we would toggle the investment growth rates in each of those areas to ensure that we could deliver those underlying margins and also ensure that we could, you know, drive modest margin expansion into the future as well. Got it. Then I think you're being anticipatory on the commentary around the new business, giving us the two-year CAGRs and such. Just any comments on what you're seeing in real time from a macro perspective, whether it's pipeline build and conversion in June and July or the topics of client content demand, just any other business kind of metrics, just given the you know the quote-unquote near record when we you know are I guess used to fresh records from the growth company that Gartner is. Yeah. Hey Jeff, it's Gene. The selling environment has been quite, I think, stable and good compared to Q1. If you look again, as you said, we have near record new business levels. We have near record retention levels. Our conferences booking for both exhibitors and attendees was very strong. That's been reflected in our guidance going forward. I believe our consulting business had one of the best quarters we've ever had with revenues up 20%, backlog up 45%. There's kind of nothing, if we look under the covers, that would lead you to believe, you know, in Q2 that anything other than the selling environment was quite robust. Jeff I would just echo, having read briefly your report earlier, this morning, that, you know, the comps are super tough in Q2, and they remain pretty tough, throughout the balance of the year. You know, we're still growing CV at a great growth rate. You heard some of the, you know, other metrics around our underlying businesses in conferences and consulting as well. Very tough comps, you know, for the balance of this year, but still feel good about the momentum of the business. Yep. Got it. Thank you. Thank you. Our next question comes from Heather Balsky with Bank of America. Your line is now open. Hi. Thank you for taking my question. I guess on the topic du jour in terms of what happens in a downturn, can you talk a little bit more about how your business today is more resilient in a downturn when you look back to, I guess other periods of macro decline, maybe COVID crisis or even going further back, the financial crisis, and kind of how you feel about the sales line going into something potentially happening near term? Hi Heather, it's Gene. You know, we're very cognizant always of the environment around us. We try to make sure that we're, as a business, prepared for kind of where the world is going. Clearly being concerned about a macroeconomic downturn is one of those things. First thing is, you know, at any given point in time, we have clients that are growing, clients that are shrinking, and clients in between. We always have clients that are struggling. What we see in a macroeconomic downturn is just more of those clients, but we do it all the time. Now, as I mentioned earlier, we constantly adjust to try and make sure we are prepared for whatever economic environment comes. We do this in a number of ways. One of them is we actually do surveys of our clients to understand kind of where their mindset is, what they're concerned about. In fact, in July, we did a survey of more than 150 chief financial officers of our clients to see what was on their mind and therefore how should we respond. They had three priorities. One was securing talent. They're still seeing that it's hard to hire talent, and they're concerned about the wages for those talent. The second one is they wanna keep accelerating digital even in a downturn. In fact, we asked these CFOs, what are they gonna do in the downturn? 69% said they're going to continue to increase spending on technology in a downturn. 28% said they're going to maintain it, and 3% said they're gonna decrease it. This continued investment in technology to improve the economics of the business continues on. The third priority was to manage spending on things like operations, real estate, travel, to pay to hire people and pay higher wages, as well as to do these investments in digital. What we're doing is we're taking our research content and aligning it with those kinds of priorities, helping help the clients making sure they secure talent and manage with inflation, making sure they can continue to accelerate the digital impact on their business. Thirdly, but most importantly maybe, helping them to manage spend. That's a big part of our business all the time, and we recently updated our what we call cost optimization work to make sure we can help them with it. We've updated our research based on. I gave you the CFO survey. We do surveys of all C-level executives to understand what their individual priorities are. We then update our research to make sure it's on those most contemporary topics. In fact, in July, we went through and trained all of our salespeople and our service people in terms of what are the most important issues today with clients, like the things I just mentioned, and how has our research changed so that we can match those needs. We'll continue to do that going forward. This wasn't kind of a one-time thing we do once. We do this on an ongoing basis. Part of our strategy is to make sure our content is always on the topics people find important. Now clearly one of those things is gonna be how to manage costs, and we will help them with that. Then making sure that all of our sales and service people are equipped to have conversations with C-level executives on how we can help them with those priorities. This agility is a core part of our business. We also do structural things in our business like, you know, if you, the share of multiyear contracts we have is quite high, and it's been a strategy to grow that over time. It's those two things, it's making sure our content is great, our sales group preferred, and making sure the underlying structural factors we can control are also there. That has, if you look over time, we've performed better and better each downturn. You know, we're certainly aware there might be a downturn and are preparing for it. Great. Thanks. Thanks for answering that. Another player, I guess, in the space recently mentioned longer contract cycles. Are you seeing anything like that in your market? I'd say we haven't seen longer contracting cycles. I would say we see escalations. It's more likely that a contract would be reviewed by a CFO than it was a year ago. Because we train our salespeople so that that's likely to happen and to be prepared for it and to both prepare our immediate client, who might be like the chief HR executive or chief information officer, that they might have to go to their CFO and review it and make sure they have what we call a CFO-ready package. Thank you. Thank you for answering my questions. Thank you. Our next question comes from George Tong with Goldman Sachs. Your line is now open. Hi. Thanks. Good morning. The performance in GBS was noticeably stronger than GTS. If you look at CV growth, it was 23% GBS, 14% GTS, and the headcount growth was faster at 17% at GBS compared to 9% at GTS. Does this difference in growth between the two businesses reflect priorities internally, or does it reflect customer demand that might be different between GTS and GBS? Yeah. Hey George. I think it reflects the investments that we've made more than anything else. You know, if you go back, in fact, go back five years ago, we began investing pretty heavily in areas outside of IT. Think marketing, supply chain, finance, HR, legal, sales. Those were areas that hadn't traditionally been strong for us. We were in a couple of them, but they hadn't been as strong. We upped our investments significantly, both buying CEB and then after we bought CEB with investments. What we're seeing in the accelerated growth rate in GBS now is the outcome of those investments. We kind of invested up front. There was a lot of discussion about it at the time and, you know, we increased sales capacity, increased research capacity, service capacity, developed a lot of content, and we're seeing the benefits of those. I think that's the first piece. The second piece is one of the major factors to grow our business, clearly with this huge market opportunity, is growing our sales headcount. While we increase sales productivity, we've had some good increases in productivity, growing sales headcount is essential. The fact that we've grown our GBS sales headcount faster, over time, not when we do this quarter, but if you look at, like, over the last, you know, since 2019, we've grown our GBS sales headcount at compound growth rate of about 60% a year. I'm sorry, about 5% a year. Which is faster than GTS, which has been about flat. That's allowed the growth to be a lot higher in GBS. Those two things, the combination of the investments and the growth in sales force is what's really powered the faster CV growth. The other thing I'd add George, is just, you know, as we look out over the medium term, we believe, given the market opportunity and our ability to go capture that market, that both GTS and GBS can be consistent 12%-16% growers. Yes, GBS is growing, you know, a little bit ahead of that right now, but, you know, we remain very confident that both GTS and GBS can continue to grow at very strong double-digit growth rates. Got it. That's helpful. Last quarter you increased your normalized EBITDA margin targets from 19 and 20% to 20%, and now you're saying underlying margins will be in the low 20s. Just going back to clarify, are you increasing your underlying margin target over the medium term, or are you reiterating it from the prior quarter? Yes. It's a great question. Let me attempt to clarify, 'cause it's a very important question. Number one, I would say just as context and, you know, we can grow our top line at double-digit growth rates and modestly expand margins over time. You know, there is operating leverage in the business, said another way, right? Those are kind of two key points. You know, when we were discussing the 20% normalized margin, we were really looking back to 2021 and attempting to give a view on if things had been, quote-unquote, more normal, what would our operating or EBITDA margins, what would they have been in 2021. What we're now providing is more of a go-forward view around what do we believe the operating margins are that we can run the business at. You know, we've, you know, we have moved that higher over time, to your point, because we've gotten increased visibility into better ways to run our business. What is the new normal for travel expenses? What is the new normal for the amount of real estate we need? What does it look like when in-person conferences come back into the portfolio? What does it look like as we catch up on headcount and then, you know, continue to grow and invest to support and sustain future growth? The way to think about that low-20s% number is, yes, it's an update and, but it's also a view towards what do we think the underlying margins of the business are that we can modestly expand on going forward. Got it. That's helpful Craig Safian. Thank you. Thank you. Our next question comes from Toni Kaplan with Morgan Stanley. Your line is now open. Hey this is Greg Parrish on for Toni. Thanks for taking our question and congrats on the strong quarter. Just wanted to talk about margin. You ramped up hiring in the quarter a lot, but margins went up, and understand a lot of those probably weren't in the expense base yet. Just really, Craig Safian, if you could kind of help us bridge on how you get to the margin in the back half, given the sort of implied step down. Yeah no absolutely. You've hit on a number of the items that will impact the margins in the second half of the year. We were very aggressive on hiring in the first half, and we expect to remain as aggressive in the second half as we continue to catch up from hiring from 2021, and we also make sure that we're investing appropriately for the future. That's a big piece that goes into the cost base for the second half of the year. The second big thing is resumption of travel. Some of that is tied to us returning to in-person destination conferences, but a lot of it is just normal. You know we run global teams, and we want our leaders to be in front of those global teams. You know, we'll see that ramp up in the second half of the year as well. Third thing is our normal comp adjustment period happens April 1, so we only have one quarter of that in the first half of the year. We obviously have two quarters of that in the second half of the year. Those are the three biggies as you think about bridging the expenses. The fourth one is with the return to in-person destination conferences. Obviously there's a lot of variable costs in delivering those in person. Great. Thanks for the color there. I guess just a quick follow-up on pricing. I think last quarter, Craig, you talked about getting more this year given the inflationary environment. I guess, you know, the broad macro is a little bit different than it was three months ago. Are you still expecting sort of above normal pricing this year? Yeah. I mean Greg the way to think about it is we wanna make sure that we are matching our price increases with wage inflation or cost inflation. The bulk of our costs are people related, so we feel good that we are matching our price increases with what we're seeing on our wages. Okay. Thank you. Thank you. Our next question comes from Andrew Nicholas with William Blair. Your line is now open. Hi. Good morning. Wanted to ask a question first on the headcount growth. Really solid quarter-over-quarter increase there. I think in your prepared remarks, you touched on it briefly, but I was hoping you could spend a bit more time on attrition trends, how that's kind of coming in relative to your expectations and the successful recruiting efforts. Just a little bit more color there 'cause it does sound like you're still pretty happy with where that's trending in your goals for the full year. Yeah Andrew quick question. So first, in terms of our attrition, we wanna retain our great associates. Attrition, like many companies, went up over the last couple years. We worked hard to understand the causes and then making sure we addressed that. Actually, our associate turnover has actually gone down now to kind of what we would call normal levels. We're very happy with that turnover. In addition to that, we have a very strong recruiting team. We have a truly world-class recruiting team, and that recruiting team's been doing a great job. Of course, we have a great employee value proposition as well. You combine those three things, lower turnover, a great employee value proposition, a crack recruiting team, that's allowed us to get our, you know, net, associate, headcount growth back up to where we need to support the growth in our business. Great. Thank you. For my follow-up, I wanted to ask about strength in the U.S. versus internationally. Obviously it seems like there's pretty broad-based growth across the practices and across the industries. Is there any difference in CV growth or how you're kind of able to sell in EMEA, for example, given the geopolitical uncertainty or anything to call out there in the quarter? Yeah. Hey what I'd say is there's nothing systematic. If you look at Europe's proceeding along. There's some countries that are doing very well, there's some countries that aren't, and it's sort of typical of what we've seen, and then it is kind of flat. And the same thing is true for the rest of the world. Nothing really remarkable in terms of, you know, US versus different geographic regions. Yeah. Andrew you know when we say broad-based growth, it is broad-based. We look at it, you know, across our top ten geographies. They're all growing at nice growth rates. When we look across industry cuts, you know, they're all growing, you know, at nice growth rates. Yeah, there are always pockets where, you know, there may be a little bit of a, you know, a challenge for us, but generally those are either like super micro challenges or our own operational challenges. But the growth has remained pretty broad-based. Yeah. The biggest indicator of where we've been growing and not growing is where headcount or our sales headcount has grown faster or slower. Makes sense. Thank you. Thank you. Our next question comes from Seth Weber with Wells Fargo. Your line is now open. Hey good morning everybody. Thanks for taking the question. I wanted to just ask another question on the expense side. I appreciate that, you know, travel, T&E and stuff like that is ramping up in the second half of the year. Do you think that the run rate by the end of the second year will kind of get you back to par? Or do you think there will still be some kind of catch-up headwind into next year? Thanks. Yeah. Seth good morning. It's a good question. You know, I think the second half of the year will be more indicative of quote-unquote normal travel. You know, starting off the year this year, given where we were with the pandemic, it was a little light in the first three or four months of the year, and has started to pick back up. Yeah, second half is probably more indicative. You know, I think the way we're thinking about it is as compared to the last quote-unquote normal year, back in 2019, where you know, we expect to spend probably, you know, at least 50% less than we did in 2019. Again we just think that you know, the company and our associate base has embraced and thrived operating virtually. We still do need to travel, but we don't need to travel at the same volume that we did back in 2019. Got it. Thank you. Just a follow-up, I was really surprised at the strength in some of the areas like the non-subscription revenue, and then the consulting backlog up 45%. You know, was there anything unusual there or is that just reflective of kinda what you were talking about earlier that, you know, just the model is just more recession resistant or resilient than people might expect? And just any comment on those two line items. Thanks. Yeah. Hey Seth. I think it just reflects that our clients had challenges that they need help with, and that our content and the way we deliver the content, whether it's through consulting, conferences or research, is really helpful in helping them solve their problems. I think it's indicative that we have a great value proposition, just kind of what's going on. Okay. Just the non-subscription revenue, do you feel like that's a kind of sustainable level, or would you expect that to come off a little bit here going forward? Yeah. Seth you know it is. We had a really strong year on that line last year, so tough compares there, which again, we did model into, you know, our initial guidance and our updated guidance as well. You know, to Gene's point, the products and offerings we have there offer a very strong and compelling value proposition in good times or, you know, rougher times. You know, we still expect it to be a nice strong grower for us. Again, super tough compare against the 2021 performance. Got it. Okay. Thanks guys. Appreciate it. Thank you. Our next question comes from Jeff Silber with BMO Capital Markets. Your line is now open. Hi, this is Ryan on for Jeff. I just had a quick question on the labor supply side. Is it still as tight to find potential employees as it was three months ago? Hey great question Ryan. You know, what I read in the press and what I see with a lot of other companies is a lot of challenges. If I go to the CFO survey, one of the biggest concerns that CFOs have is their ability to hire talent. We've actually found that we've had no trouble hiring talent. You know, again, our employee value proposition is very strong. We have a great brand with associates, and so we've had no trouble hiring people at all, and that's reflected in, you know, the hiring results that you saw. Got it. Just to follow up on the prior question, should we look to non-subscription revenues as a leading indicator if we're heading into a downturn? No I don't think so. I mean you know, it's a relatively small line, and it can be a little volatile. You know, again, I think, you know, as we look across the business, I would look broadly across the business for leading indicators, not one of the smallest revenue lines that we actually have out there. So, no, I would guide you to you know, look at consulting, look at conferences, and look at our research CV growth as the leading indicators. Got it. Thank you. Thank you. Our next question comes from Manav Patnaik with Barclays. Your line is now open. Good morning. This is Brendan on for Manav. Just wanna ask, obviously some of your competitors for talent at least, you know, are freezing hiring and, you know, you may have an opportunity to catch up on headcount in the next few quarters, you know, as the labor market gets a bit more friendly. For GTS specifically, you know, obviously things are started to improve this quarter. Is this a level where you grow 10% off of or are you do you think you can really catch up the next couple, you know, over the next few quarters? Yeah Brendan it's a great question. I mean, our business grew really rapidly last year and more rapidly we'd expected, and so we had a lot of hiring to catch up on, including in GTS. We wanna get that catch-up hiring so that we can properly, you know, service our clients and also be prepared to sell more clients. Over time, we expect to grow our GTS sales force and GBS too, by the way, I think 3-5 percentage points slower than our CV growth. If the CV growth is 15%, you'd expect to see over time, our target would be headcount growth of 12%-10% or 10%-12% growth. Yeah that's Brendan the way to think about that is that's sort of the normal algorithm for how we wanna make sure that we are investing for both current needs and future sustained growth. Obviously, this year, to Gene's point, we are doing a lot of catching up, and so you'll see those growth rates a little bit, you know, higher potentially, obviously with GBS, you know, up at 17%, and we're, you know, fully expecting both GTS and GBS to end the year with a strong double-digit quarter-by-quarter headcount growth. Okay. Just another question here, but moving over to the conferences. Is the guidance increase really just like better attendance than you expected? You know, are the conferences all full? Is that what it is? Or is there something else driving that higher? Hey Brendan. The first piece of it is that we're seeing very, very robust demand for conferences. Exhibitors, you know, are finding it a great way to meet prospects for them, and the attendees find tremendous value as well. We're finding just very strong demand for our conferences continuing on. I'll let Craig Safian talk about the difficult guidance. Yeah. You know, I think you know, Brendan, obviously the second quarter were our first in-person destination conferences, you know, in a few years. We were pretty cautious about our expectations around the number of exhibitors and number of attendees that, you know, would want to come, would be able to come. You know, as you heard in our comments, I think both groups enthusiastically returned in the second quarter. As Gene mentioned, you know, earlier, our bookings leading through our Q3 events and even the advanced bookings on Q4 conferences look very strong as well. The update and the outlook is really just around, you know, some caution up front because we hadn't delivered anything in person in, you know, essentially three, you know, almost three years. We saw an enthusiastic return from both revenue streams, attendees, and our exhibitors. Great. Thank you. Thank you. As a reminder to ask a question at this time, please press star one one. Our next question comes from Hamzah Mazari with Jefferies. Your line is open. Hi good morning. This is actually Stephanie on for Hamzah. I was hoping you could talk a little bit about the tenure of your GTS sales force today versus pre-pandemic, you know, how much tenure can add to productivity, and if right now, if you view the GTS sales force productivity is kind of back to those pre-pandemic levels. Thank you. Hey Stephanie great question. Tenure is an important determinant of productivity. When we hire a new salesperson, it takes some time to fully get up to speed. A more tenured salesperson is more productive. We're very focused on both hiring people to get up to speed quickly as well as having internal training and other systems that help those sales people, new salespeople get up to speed even faster. If you look at it, you know, because we hired fewer people during the pandemic, the average tenure of our sales force last year was pretty high, the highest it's been in recent memory. As we ramped up our hiring, you know, in Q2, it was more towards a normal tenure level. As we keep hiring we expect that to drop a bit as we go through the rest of the year and enter into 2023. Great. Thank you. Kind of switching gears, could you talk a little bit about the M&A environment? You know, how's the pipeline looking today and kinda where your focus is at? Hey Stephanie. Good morning. Yeah, from an M&A perspective, you know, obviously, you know, we've got a team that is actively out there looking at opportunities and staying in touch with, you know, a few hundred companies and actually tracking well more than that. You know, I think our strategy as we've articulated is, number one, you know, we're an organic growth company, and we believe we can achieve our, you know, medium-term objectives of that double-digit growth and modest margin expansion, organically, and so it does not require M&A to get there. That said, we do like to do M&A when it can, you know, fill a gap or catalyze us or add an asset or capability or things like that. I think you know, as we look at the radar screen, you know, we are looking at things that can catalyze us or fill in gaps or add assets to our portfolio that can help us over the long term. I think there obviously, over the last two or three quarters, just like the equity markets, has been a recalibration around valuations. I'm not sure every seller has completely recalibrated yet either. You know, we'll continue to be on the lookout for strong strategic value-enhancing tuck-in opportunities that, again, can either catalyze growth, fill in a gap, or add important assets for us. Great. Thank you so much. Thank you. I'm currently showing no further questions at this time. I'd like to turn the call back over to Gene Hall for closing remarks. Well summarizing today's call the second quarter we drove strong performances across the business. Across every geography, every industry, and every major function, we deliver incredible value. We have strong demand for our services. We have a vast untapped market opportunity. We can drive sustained double-digit top line growth. As we invest for the future, we'll continue to return significant levels of excess capital to our shareholders. Increased our 2022 guidance. Results, we increased our 2022 guidance. Thanks for joining us today, and we look forward to updating you again next quarter. This concludes today's conference call. 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