Good morning everyone. Welcome to Gartner's second quarter 2025 earnings call. I'm David Cohen, SVP of Investor Relations. At this time, all participants are in a listen only mode. After comments by Gene Hall, Gartner's Chairman and Chief Executive Officer, and Craig Safian, Gartner's Chief Financial Officer, there will be a question and answer session. Please be advised that today's conference is being recorded. This call will include a discussion of second quarter 2025 financial results and Gartner's outlook for 2025 as disclosed in today's earnings release and earnings supplement, both posted to our website investor.gartner.com. Unless stated otherwise, all references to EBITDA are for adjusted EBITDA with the adjustments as described in our earnings release and supplement. All contract values and associated growth rates we discuss are based on 2025 foreign exchange rates. All growth rates in Gene'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. 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 2024 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 will turn the call over to Gartner's Chairman and Chief Executive Officer, Gene Hall. Good morning and thanks for joining us today. There are two things I'd like you to take away from today's discussion. First, AI is an important opportunity for Gartner across several dimensions, and second, we're making adaptations that give us a clear path back to double-digit growth. AI is one of the most pervasive changes happening around the world. It was the single largest demand area across all the topics we cover for virtually every role. Clients see large potential in AI, and they need help in determining the best way to capture that potential across functions, geographies, and industries. Clients are looking to Gartner to provide that help, and we're the best solution to support clients. While AI was the largest single topic, there were others that were mission critical to clients, including cybersecurity, cost optimization, data governance and management, IT strategy and digital transformation, risk management, and finance transformation. HR talent planning, and more. We also experienced some headwinds during Q2. Measures of CEO confidence fell to recessionary levels, among the fastest drops ever recorded. In a Gartner survey, 78% of CEOs indicated they're implementing cost cutting measures to safeguard performance. We have a high degree of confidence in what caused these headwinds because we track the reason for every loss, both renewals and potential new business. The largest headwind in Q2 was with the U.S. federal government. Initiatives from the Department of Government Efficiency, or DOGE, made it more challenging for clients to purchase or renew many of our products. In addition, there were impacts from tariff policies. With the prospect of higher tariffs, many companies implemented strong cost saving measures. Even companies not directly impacted by tariffs began implementing these measures. Previous decisions that were previously made by functional leaders are now being escalated to the CFO or even the CEO. These changes occurred at a record pace, impacting our performance during Q2. One of Gartner's core strengths is agility in responding to change. We are making adaptations to accelerate our performance going forward. With the U.S. federal government, we are ensuring we stay aligned to the changing priorities, especially improving efficiency. Of course, we will also continue to support critical issues such as cybersecurity, and we are working with our clients to adjust to new procurement processes. We are also adapting to industries impacted by changing tariffs. A portion of our clients are always interested in cost optimization. We have great expertise in helping clients on this topic. Clients highly value our guidance because it results in quantifiable cost savings. Now, with tariff changes, the number of clients interested in cost optimization has increased dramatically. We have expanded our capabilities including certifying our client facing associates on delivering these services. We are also helping clients determine how to optimally reconfigure supply chains for tariff changes. Even industries not directly impacted by tariffs will get strong value from our enhanced cost optimization capabilities. We are making several other changes to reaccelerate growth in Research. We redesigned our insight processes to ensure we create content relevant to the broadest possible audience and that delivers the biggest impact. We're also incorporating additional proprietary data to enhance the value clients receive from our insights. We've begun rolling out AskGartner, an AI-powered tool for our clients to access trusted insights from Gartner. AskGartner has been in development for almost two years to ensure clients get the high quality results they expect from Gartner. It's based on best-in-class, large language models. AskGartner quickly breaks down a client's question into topic and intent and provides structured answers through natural language processing. Answers cannot contain direct references to our distinctive insights. Unlike other AI tools which provide answers based on public information from the Internet, AskGartner's responses are fully grounded and are world-class, proprietary, independent, and objective insights. AskGartner also provides users with relevant images and recommends follow-up questions, making our insights more discoverable and fully immersing clients in the Gartner platform. AskGartner is unique because it marries the power of Gartner Insights with AI and our teams are focused on making sure it gets better and better. We've been testing it with internal teams and a pilot group of clients. One client referred to AskGartner as, quote, a game changer for Gartner. Some mentioned time savings of up to 75% on the platform. We're also leveraging AI internally. We've introduced more than 50 applications that use AI to improve associate productivity and effectiveness. Finally, we appointed a strong, tenured Gartner leader to head up our Research organization. We're also making adaptations in sales and services to accelerate growth. We recently launched a new program to better equip client-facing associates with comprehensive knowledge on hot topics including AI and cost optimization, and we're certifying our associates on these critical topics to ensure a high level capability. Not all of our clients are aware of the full suite of high-value capabilities they're entitled to, so we're training our teams to ensure clients benefit from the full range of services. We're also expanding and refining our sales development program, which we've discussed before. This is an apprentice-type program that pairs early career talent with experienced sales professionals. Program graduates then take on their own sales territories and have higher productivity than those hired directly into role. We expect these and other adaptations will get us back to double-digit growth. Gartner's strategy and the foundation of our business is to guide executives on their journeys to achieve their mission critical priorities. Addressing these priorities usually requires long, complex journeys. Through our high value proprietary Business and Technology Insights, we guide our clients at every stage of their journeys. Gartner insights are derived from a vast pool of highly proprietary data. Every year we hold more than 500,000 two way conversations with more than 80,000 executives across every major function in every industry. We learn what they care about most, what's working and what isn't. All this amounts to several hundred terabytes of highly proprietary data. We also conduct more than 27,000 briefings annually with technology provider executives. This gives us unique insights into the technology industry that no one else has. We supplement this data with additional terabytes of information from proprietary surveys, tools, models, benchmarks, and more. Our data is real time and continuously updated, reflecting the latest information and challenges our clients are experiencing. Our more than 2,500 world class experts use this vast proprietary data in highly developed processes to create unique and valuable insights. These insights aren't available anywhere else. We know we need to get better every year, so we continually develop new proprietary data sources and constantly innovate our processes. The segment that develops these insights has historically been called Research. To better describe the value we deliver, we're changing the name of this segment going forward. Our Research business will now be called Business and Technology Insights, or Insights for short. Summarizing, there are two things I'd like you to take away from today's discussion. First, AI is an important opportunity for Gartner across several dimensions. It's the highest demand topic that we're helping our clients with today. We're rolling out AskGartner to provide faster, easier access to our insights and we're improving internal efficiency with AI tools. Second, we're making adaptations that will give us a clear path back to double digit growth. With that, I'll hand the call over to our Chief Financial Officer, Craig Safian. Thank you, Gene, and good morning. Second quarter contract value, or CV, grew 5% year- over- year. Revenue, adjusted EBITDA, adjusted EPS, and free cash flow were better than expected. We remain highly focused on delivering extraordinary value to our clients. The challenging Q1 selling environment, which was affected by the Department of Government Efficiency (DOGE) and tariff-affected industry spending changes, continued through the second quarter. We are updating our guidance to reflect the Q2 results and the outlook for the balance of the year. With our disciplined expense management, we will continue to deliver strong profitability and free cash flow. Since the end of the first quarter, we've increased the pace of share repurchases. We bought $274 million in Q2 and an additional $282 million since the end of the second quarter. This brings the year-to-date repurchase total to approximately $720 million. We will generate more free cash flow and have fewer shares outstanding over the course of the next several years. This, coupled with return to double-digit growth, will create significant value for shareholders. After reviewing the results for the second. Quarter and updating the guidance, I will take you through some of the numbers related to our path back to double digit CV growth that Gene highlighted. Second quarter revenue was $1.7 billion, up 6% year over year as reported and 5% FX neutral. In addition, total contribution margin was 68%, up 70 basis points from last year. EBITDA was $443 million, up 7% as reported and 5% FX neutral versus the second quarter of 2024. Adjusted EPS was $3.53, up 10% from Q2 of last year, and free cash flow was $347 million, another strong performance. As Gene just highlighted, we renamed the Research segment to Business and Technology Insights (“Insights”) to reflect the nature of the value we provide to clients. Insights revenue in the quarter grew 4% year over year as reported and 3% FX neutral. Subscription revenue grew 5% FX neutral. Non-subscription Insights revenue continues to be affected by shifts in traffic volumes. Second quarter Insights contribution margin was 74%, up 20 basis points versus last year. Contract value was $5 billion at the end of the second quarter, up 5% versus the prior year. Contract value and CV growth are FX neutral excluding the U.S. federal government. CV growth was about 150 basis points faster at around 6%. Global NCVI in the quarter excluding the U.S. federal government was positive $13 million. CV growth was broad based across practices, industry sectors, company sizes, and geographic regions. Across our combined practices, all the industries except public sector grew at high single or mid single digit rates. Energy, banking, transportation, and healthcare led the growth. CV grew at mid single or high single digit rates across all commercial enterprise sizes. We drove double digit growth in half of our top 10 countries. CV declined on a year over year basis in Canada and Australia, which combined represent around 6% of global contract value. Nearly all of our U.S. federal contracts will come up for renewal during 2025, with over 60% having transacted in the first half of the year. Dollar retention year to date was around 47%. At June 30th, we had approximately $200 million of U.S. federal CV. Global Technology Sales contract value was $3.8 billion at the end of the second quarter, up 4% versus the prior year. Excluding the U.S. federal government from both periods, GTS CV grew about 180 basis points faster, or 5% in the quarter. The U.S. Federal business NCVI was negative $26 million while retention for GTS was 99% for the quarter. Excluding the U.S. federal business, wallet retention was over 100%. GTS new business was down 8% compared to last year. GTS quarter-bearing headcount was up 3% year- over- year. Our regular full set of GTS metrics can be found in our earnings supplement. Global business sales contract value was $1.2 billion at the end of the second quarter, up 9% year- over- year. Excluding the U.S. federal government, GBS CV grew about 60 basis points faster at around 10%. All of our major GBS practices grew at double-digit or high single-digit rates. Growth was led by the sales, finance, and legal practices. GBS NCVI was positive $14 million in the second quarter. Excluding the U.S. federal government, GBS NCVI was positive $18 million. Wallet retention for GBS was 104% for the quarter. GBS new business was down 3% compared to last year. GBS quota-bearing headcount was up 10% year over year. As with GTS, our regular full set of GBS metrics can be found in our earnings supplement. Conferences revenue for the second quarter was $211 million, increasing 14% as reported and 12% FX neutral compared to Q2 of 2024. Adjusting for the three conferences which moved from Q1 or Q3 last year to Q2 this year, revenue growth was around 6% FX neutral. Contribution margin was 57%, consistent with typical Q2 seasonality. We held 19 destination conferences in the second quarter as planned. Q2 consulting revenue was $156 million compared with $143 million in the year-ago period, up about 9% as reported and 6% FX neutral. Consulting contribution margin was 40% in the second quarter. Labor-based revenue was $110 million. This part of the segment was up 3% versus Q2 of last year as reported and about flat FX neutral. Backlog at June 30th was $191 million, down about 2% year- over- year FX neutral. In contract optimization, we delivered $46 million of revenue in the quarter, up 26% versus Q2 of last year and 24% FX neutral. The quarter was ahead of our expectations. Our contract optimization revenue is highly variable. Consolidated cost of services increased 4% year- over- year in the second quarter as reported and 2% FX neutral. The biggest driver of the increase was higher compensation costs. SG&A increased 9% year- over- year in the second quarter as reported and about 8% on an FX neutral basis. SG&A increased in the quarter as a result of headcount growth. EBITDA for the second quarter was $443 million, up 7% from last year as reported and up 5% FX neutral. We outperformed in the second quarter through modest revenue upside, effective expense management, and a prudent approach to guidance. Depreciation in the quarter of $31 million was up 11% compared to 2024. Net interest expense excluding deferred financing costs in the quarter was $11 million. This is favorable by $8 million versus the second quarter of 2024 due to higher interest income on our cash balances. The modest floating rate debt we have is fully hedged through the third quarter of 2025. The Q2 adjusted tax rate which we used for the calculation of adjusted net income was 24% for the quarter. This compares to last year's rate of 23%. The tax rate for the items used to adjust net income was 25% for the quarter. Adjusted EPS in Q2 was $3.53, up 10% compared to Q2 last year. We had 77 million shares outstanding in the second quarter. This is an improvement of about 1 million shares or approximately 1% year- over- year. We exited the second quarter with just under 77 million shares on an unweighted basis. Operating cash flow for the quarter was $384 million, up 4% compared with last year. CapEx was $36 million, up about $7 million year- over- year. This was primarily due to real estate related costs and in line with our expectations. Second quarter free cash flow was $347 million, up 2% compared with Q2 in 2024. Free cash flow on a rolling four quarter basis was 119% of GAAP net income and 95% of EBITDA. As we noted previously, there were several items that affect rolling four quarter net income and free cash flow including after tax insurance proceeds in 2024, two real estate lease termination payments, and tax planning benefits last year. Adjusting for these items, free cash flow on a rolling four quarter basis was 20% of revenue, 83% of EBITDA, and 157% of GAAP net income. At the end of the second quarter we had about $2.2 billion of cash. Our June 30th debt balance was about $2.5 billion. Our reported gross debt to trailing twelve month EBITDA was well under two times. Our expected free cash flow generation, available revolver, and excess cash remaining on the balance sheet provide ample liquidity to deliver on our capital allocation strategy of disciplined share repurchases and strategic tuck-in M&A. Our balance sheet is very strong with $2.9 billion of liquidity, low levels of leverage, and effectively fixed interest rates. We repurchased $274 million of stock during the second quarter. Since the end of June, we have bought back an additional $282 million worth of shares, bringing us to about $720 million year to date. Last week, the Board increased the repurchase authorization to about $1 billion. We expect they will refresh the authorization as needed. As we continue to repurchase stock, we create value for shareholders through EPS accretion and increasing returns on invested capital. We are updating our full year guidance to reflect recent performance and trends. We are remaining agile in managing our cost structure while also ensuring we have enough selling capacity now and in the future. This includes QBH and other sales-related roles, which are key inputs into our algorithm for future sustained double-digit growth. Based on July FX rates, we expect revenue growth to benefit by about 95 basis points and EBITDA growth to benefit by about 190 basis points for the full year. As a reminder, about 1/3 of our revenue and operating expenses are denominated in currencies other than the U.S. dollar. For the Insights subscription revenue in 2025, our guidance reflects an expectation that Q2 trends for new business and retention continue through the second half. At this point in the year, we have very high visibility into the Insights subscription revenue for calendar 2025. We've also incorporated the information we have about U.S. federal spending decisions to date. In addition, we've taken a prudent view of the outlook while the selling environment remains challenging and we've seen longer sales cycles. We entered Q3 with double-digit year-over-year growth in both GTS and GBS new business pipelines. For the non-subscription part of the Insights segment, we've built a continuation of recent traffic and pricing trends into the guidance for Conferences. We are basing our guidance on the 53 in-person destination Conferences we have planned for 2025. We have good visibility into current year revenue with a majority of what we've guided already under contract. For Consulting, we have more visibility into the next quarter or two based on the composition of our backlog and pipeline. As usual, cost optimization has had several very strong years and the business remains highly valuable. Our updated 2025 guidance is as follows. We expect Insights revenue of at least $5.255 billion, which is FX-neutral growth of about 2%. This reflects subscription Insights revenue growth of about 4%. We expect around $210 million of non-subscription revenue. We expect Conferences revenue of at least $625 million, which is FX-neutral growth of about 5%. This is unchanged from last quarter. We expect Consulting revenue of at least $575 million, which is growth of about 1%. FX-neutral, this is also unchanged from last quarter. The result is an outlook for consolidated revenue of at least $6.455 billion, which is FX-neutral growth of 2%. We now expect full year adjusted EBITDA of at least $1.515 billion, down $20 million from our prior guidance. This reflects margins of 23.5%, consistent with last quarter's outlook. Despite the lower revenue guidance, we expect 2025 adjusted EPS of at least $11.75, an increase from last quarter. For 2025, we expect free cash flow of at least $1.145 billion. This is unchanged from our prior guidance and reflects a conversion from GAAP net income of 141%. Our guidance is based on 77 million fully diluted weighted average shares outstanding, which incorporates the repurchases made through the end of the second quarter. For Q3, we expect adjusted EBITDA of at least $300 million. Our financial results through June were modestly ahead of expectations. Underscoring the resilience of our business model, we've updated the revenue guidance to reflect continued challenges in the selling environment. Our EBITDA margin outlook remains higher than it was at the start of the year. We have successfully navigated challenging environments before and know the right things to do. We are adapting by making operational changes and renewing focus on leveraging our proven sales best practices. This will drive the return to historical levels of productivity. Some of the headwinds are related to temporary external factors, including the U.S. Federal government and tariff-affected industries. As productivity gets back to historical levels, we will accelerate QBHs to capture the very large addressable market opportunity we have. Before we go to questions, I will take you through some of the numbers related to our path back to double-digit CV growth. If recent retention and new business trends continue in the second half, we would exit this year with CV growth in the low to mid-single digits. This reflects Department of Government Efficiency tariff-affected industry dynamics and tech vendors only part of the way back to normal spending. There are four primary categories which will drive the return to double-digit growth. First, most of our U.S. Federal contracts will have come up for renewal this year, removing the Department of Government Efficiency related headwinds, with no assumption for net growth next year, will add back around 200 basis points of contract value growth in 2026. Second, as companies and tariff-affected industries get more clarity around trade policies, we expect them to get back to normal course planning and spending. This should add at least 100 basis points to growth. Third, tech vendor remains on a path back to double digits. We are encouraged in particular with the improvement in the small tech vendor part of the business. Within large tech vendors, the overall trend remains positive. The second quarter was affected by the timing of a few larger deals getting delayed and tariffs affecting some parts of the hardware subsegment. Continued reacceleration of tech vendor contract value would add back another 100 basis points to growth. Finally, we are focused on improving our operations to drive faster growth even in challenging selling environments. This includes more focus on cost optimization insights, the continued rollout of AskGartner, the initiatives Gene discussed, and more. We expect to add as much as 100 basis points-200 basis points to growth from these initiatives and better overall execution. All these factors would get us to at least high single digit growth in 2026, well on our way back to double digit growth in 2027 and beyond. Another take on the opportunity is to recognize that as the sales teams return towards historical levels of productivity, we will return to double digit contract value growth. With around 5,000 sellers, we can generate enough NCVI to grow high single to low double digits next year. This is the case without growing quota bearing headcount and even at productivity levels lower than the historical $110,000- $120,000 per seller. We are implementing programs to support the sales teams, to drive client and prospect engagement, and to grow our sales and sales support teams outside of direct frontline quota bearing headcount based on recent trends. As I mentioned, contract value growth this year will be in the low to mid single digits. With the adaptations we are making and with the stabilization of our most acutely impacted end markets, we expect growth to accelerate next year and again in 2027. Based on this outlook, our overall medium term growth algorithm, including double digit revenue growth and modest margin expansion, remains unchanged. We'll also 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, ladies and gentlemen. If you'd like to ask a question at this time, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, simply press star one one again now. First question coming from the line of Andrew Nicholas with William Blair. Your line is now open. Hi, good morning. Thanks for taking my questions. Appreciate the build on the return to high single digit or even double digit CV growth. I wanted to ask specifically on the tariff impacted industry piece. Is there anything you can do to kind of size what you've determined to be the tariff affected industries? How much that represents in terms of CV? I think you said 100 basis points improvement next year from kind of some normalization there. Any more color or quantification on that front would be helpful. Yeah. Good morning, Andrew. Thank you for the question. The way we've defined tariff-impacted industries is not perfect, I will tell you. We've looked at industries that rely heavily on importing and exporting, and we've looked at ones focused here in the U.S. and those where the U.S. is a major trade partner. When we rolled that up, around 35. To 40% of our contract value (CV) fell into. That category across both GTS and GBS. Thank you. And then o n the AI topic, I want to maybe focus on the operational efficiency piece again. Is there anything you can do to kind of quantify that? I understand that improving the product was one part of the top line growth acceleration, but if we think about later this year or into 2026 and 2027, is there anything that you can say about what those internal efficiencies might do for the cost structure or margin profile broadly? Thank you. Hey Andrew, it's Gene. We've implemented about 50 internal applications where we're using AI. Most of those are custom applications, meaning it's not just using a commercial tool. We make that available as well, but we have a bunch of those applications, custom AI applications. There are some of those applications that have promising early results. It's early to say what impact they're going to have over the long term. Understood, thank you. Thank you. Now, next question coming from the lineup. Toni Kaplan with Morgan Stanley. Your line is now open. Thanks so much, and thank you for the comments on AskGartner in the prepared remarks and also the clarification on sort of the proprietary data and processes that you have. I was hoping, I know AI has been a topic that has been most frequent for you coming in from customers. What are the most common questions or topics that clients come to you for understanding just better and how you help them like that? I think my main purpose in asking the question is trying to figure out what is it that can't be addressed by sort of deep research AI tools that you're able to help with that clients are seeing the value in. Thank you. Hey Toni, if you look at Gartner, can we just start with what's differentiated for us, which sounds like is that the heart of your question, is that right? Yes, thank you. Okay. Yeah. The first thing is that we help clients with what we call mission critical priorities, which are things like building a cybersecurity capability, how to fully leverage AI within their organizations, leveraging technology for finance transformation. These kinds of initiatives, what we call mission critical priorities, are things that take a lot of effort, a lot of investment, typically over a period of years. Those are the things that we're helping our clients with. The first thing to understand is we're not kind of just answering a simple question. We're actually helping clients on a journey to accomplish these high leverage, high impact initiatives. We join it with the senior, most executives in the company. Think about again, Chief Information Officer, Chief HR Officer, Chief Financial Officer. They're relying on us to help them, take them through those journeys and make sure they're successful with these relatively large, complex projects. We're not answering a simple question, we're actually helping these complex journeys. We're. The way we do that is actually by several terabytes of proprietary data. What we have is, as we mentioned in the past, something like 500,000 one on one conversations between our analysts and clients each year. Those conversations cover things like what are their mission, what are the challenges, what's working, what's not working. In addition to that, when it comes to software, which is a big part of a lot of Solutions, we have 27,000 briefings from technology vendors where typically senior leaders, those technology vendors would grid our analysts on what the strategy of the company is, how they're trying to compete, et cetera. We then combine that with proprietary research that we do, things like surveys of our clients, things like peer actions, things like that, that again isn't publicly available, but it's helpful in solving these kinds of problems. We have world class experts that take all that information and synthesize it and then come out with how do clients, what's the best way for clients to go on these journeys to solve these very difficult mission critical priorities. You think about it, of course we're unbiased, independent, objective, et cetera. Those are the key elements about the kind of problems we have our clients with and how it's differentiated from other alternatives. That's very helpful. I wanted to ask if you're getting any different feedback from clients in terms of either why they are, like I assume when a client is at renewal period, if there's any sort of difference in trend, like if there's clients that are cutting seats because of either the macro or other things and how much insight you get from them in terms of the reasons why. If they are happening to cut a seat or two or something like that, do they give you reasons in terms of why they're doing that and if you've seen any change? Thanks. Yeah, Toni. We're in contact with our clients every single day. We track, we have done this for years, we track every single deal at the deal level. If we win a deal, we ask the client, we ask the salesperson, why did we win? If we lose a deal, we do the same thing. This is not just for renewals, it's for new business as well. One of the things that we saw, we've seen this year, particularly in Q2, is with client, I'm sorry, with tariff impact industries, that purchase decisions were getting escalated. Normally a Chief HR Officer or Chief Information Officer can make a decision to buy an additional license with Gartner or a couple of extra licenses with Gartner. That's within their purchase authority. One of the things that we saw was a dramatic change in Q2, that got escalated to the CFO or even the CEO. The reason the clients tell us was because they're worried, especially the tariff impacts. Industries worry the tariffs are going to lower their profitability. They won't be able to pass all the costs to their clients, and so they have massive cost cutting initiative across enterprise, which is why you see decisions, even small purchases, getting escalated to the CFO or the CEO. This is behavior that we've seen in every recession. We saw that exact same behavior in the pandemic back in 2021. We saw the same behavior back in 2009 during the Great Recession. Whenever companies are under cost stress, one way they control those costs is they put more friction in the process by making it get escalated to the CFO or CEO. The implication for us is it stretches out selling cycles. Selling cycles went up substantially in terms of the amount of time it takes to close a deal because of having this additional room with you. In the end of the day, it doesn't necessarily change our close rate, but it does make it so that we actually work and it takes more time. The biggest single change we saw in Q2 outside of the public sector was this escalation. The other thing that's wrong in Q2 is, and we didn't see this in Q1, is for companies that weren't impacted by tariffs, many of their clients are companies that are impacted by tariffs, and so they started this as well. Our growth rate was higher with companies that were not impacted by tariffs, but we saw the beginnings of the same kind of escalation that we're seeing in tariff impacted industries. Lastly, as we talked about, there's the impacts in the U.S. federal government with the Department of Government Efficiency where again the changes they made to improve government efficiency made it much harder for our clients to buy from us. We still have a strong demand, but we're having to work our way through with our clients through showing the value that we have. We're confident over the long term we'll be able to do that. There's just more scrutiny than there was a year or two ago. Thank you. Thank you. Our next question coming from the lineup. George Tong with Goldman Sachs. The line is now open. Hi. Thanks. Good morning. You provided very helpful renewal metrics on federal government clients in the quarter. Can you talk a little bit more about how new purchases among these government clients are performing? Have they come to a full standstill or are you seeing some trickle in? Hey, good morning, George. Yeah, we mentioned the dollar retention rate that we've been achieving, which is just a shade under 50% on a year-to-date basis. Pretty consistent, both Q1 and Q2. We actually are writing some new business. I would underscore what Gene just highlighted about the contracting process. It is not simple or easy. We are writing new business, and again, I think we talked about on the call last quarter, our clients really do value everything they get from Gartner and they want to keep us. In some cases, they are unable to do that because of dictates from above or just really challenging hurdles that you have to go through from a contracting perspective. In the clients where we are retaining but not driving new business, we are staying close to them so that when things do stabilize, we will be able to win back business that we may have lost. And then also we continue to work with all our clients. A lot of our value proposition is very well aligned with driving efficiency. Our cost optimization assets are first rate and 100% aligned with government efficiency. While the dollar retention rate has been just below 50%, we are writing. Some levels of new business. It's obviously weighing down on a year over year basis, as you'd expect. We are writing some levels of new business. Got it. That's helpful. With respect to tariff industries, you mentioned it represents about 35% to 40% of CV spread across both GTS and GBS. Is there any way you can provide some sort of spread between how much of that impact is in GTS, how much of that impact is in GBS so that it's possible to ascertain how much headwind across both of those segments one should expect from tariffs? Yeah, it's a really good question. You know, I think in GBS, because supply chain is, if not our largest practice, top two in terms of size, that's going to be much more concentrated with "tariff affected" industries. I don't think it changes the distribution wildly, but GBS is probably a little bit more reliant or has a little higher proportion of tariff affected clients and CV than GTS. Very helpful, thank you. Thank you. Our next question coming from the line of Manav Patnaik with Barclays. Your line is now open. Hi, this is Brendan on Manav. I just want to ask on the tariff commentary. I mean, we've had a lot of companies report, and it seemed like the view was that confidence had kind of returned by the end of the quarter, even though there was definitely some concerns earlier in the quarter and not necessarily huge strategy changes outside maybe a couple industries. Just seeing what's different about your business in this environment right now. I guess what I'd say is that we saw with our clients earlier and this didn't change at the end of the quarter, which is that companies worry about even with a $50 on the low end of tariffs, even like a 15% increase in tariffs, that they did not believe they could necessarily pass all that on to their clients. One is a cut in cost so that they could help maintain both the client pricing as well as their margins. We saw clients very widely basically saying, look, we need to cut costs so that we can maintain our revenues and our margin structure. That didn't change through the quarter. Okay on the new business pipelines, I guess what's driving that, is it new logo, upsell, cross sell, or seats, or some mix of all? As Craig mentioned in his remarks, our new business was up at very solid double-digit rates for both TCs and AWs. Pipeline, you see. Pipeline. Yeah, pipeline. Pipeline was up a very good double-digit rate for GTS and GBS. We basically see that as, again, there's demand for high demand for our services. The biggest single area is in helping clients figure out how to use AI, but also all the traditional things as well, like cybersecurity and things like that. Our pipeline's up because there's strong demand out there for our services. It is balanced across additional licenses with existing clients, new logos, et cetera. All right, thank you. Thank you. Our next question coming from the lineup. Joshua Chan with UBS, your line is now open. Hi, good morning. Gene and Craig, I guess considering the magnitude of the slowdown in the ex Fed business, what's your level of conviction that this is really tariff related versus clients just pulling back and blaming tariffs? I can't imagine the existence of tariffs is that much of a surprise in Q2 versus Q1. Right. What's your confidence about tariffs being the precise driver there? Again, we track every single deal, and we have a well-developed system. We've done this for a long period of time where we track every single deal, and we ask the clients, we ask our salespeople kind of what was the reason we won or what was the reason we lost. Quite good detail, and that's why we have confidence that what's driving this is in the terrific. Universities are real focused on reducing costs because that's what our clients are telling us. We also track escalations. As I mentioned, whenever people are focused on costs, one of the first things they do is make clients escalate things from the functional leaders, the CHRO, the CFO, CIO, that's right, CIO, to the CEO or the CFO. That's exactly what we're seeing, which is, you know, we've seen that, as I mentioned before, in both the pandemic and in the recession in 2009. That's what we're seeing right now. I'm sorry. Josh, one other just add on thing, as we're talking about the dynamics of the business, I wouldn't characterize us saying the slowdown was completely attributable to tariffs and tariff affected industries. We're just trying to provide incremental color around what we're seeing in the business. Because a large part of the economy and a large part of our client base are impacted by tariffs, we wanted to make sure we provided that. Incremental color around this. Due to the performance of the tariff impact industries, it's much worse than the non-tariff impact. That's helpful. That makes a lot of sense. Maybe my follow up question. I'm sure you're aware of the narrative that AI could be having some sort of impact on the demand of your services. I was just wondering how you would respond to that and how you would kind of ring fence any impact on the negative side from AI. Thank you.. Ladies and gentlemen, please stand by. Our speakers are having technical issues. Please stand by. No, we're good. I'll give ideas back. Did you not get that response? Okay, our next question coming from the line of Jeff Meuler with Baird. Your line is now open. Hey Gene. We did not get that response. I think a lot of us have a similar question. If you could try to. Ring fence the AI risk, including from my perspective, just what you're hearing on pipeline conversion and if that's coming up. it an issue at all for those that may not understand the richness of. The Gartner value proposition as well. Yeah. Hey Jeff, sorry, didn't get that response. Basically, first, our pipeline, as I mentioned, is up at robust double-digit rates for both GTS and GBS. I think that's the best indicator of kind of what demand is like. What we're seeing with the pipeline is that we track the number of days from when a deal enters a pipeline, the number of days it closed. The time required to close deals now has gone up. The reason it's gone up is that it takes more time. I mentioned earlier that a lot of deals will be escalated from the functional leader like a CIO or CHRO up to the CFO or CEO. It takes more time in the selling process because our cultural leader then has to make a business case. It takes time organizationally for that to get done. What I think we're seeing is there's not a reduced demand, but closing deals takes longer because the purchasing processes have been stretched out. That's pretty pervasive. What we've seen in recessions in. the past, I think, Jeff, the other thing I would just add is to harken back to Gene's prepared remarks where he talked at length about the different types of incremental value that you get from Gartner, all of the proprietary insights that we have behind our firewalls that are completely independent, objective, and proprietary to us. I think perhaps most importantly, the fact that what we're helping our clients with are complex, multi-quarter, often multi-year journeys on their most important mission-critical priorities. I think you know, there's sometimes a misconception around what the value is of Gartner for our clients in both GTS and GBS. Fundamentally, it's helping our executive clients solve their complex, multi-quarter, multi-year mission-critical priority journeys. We believe, and I think as Gene just highlighted, our pipeline reflects we are the best, most value-oriented solution. To be able to help our clients. Accomplish those types of things. We are going to keep improving what we do and keep growing the number of terabytes of data and eventually petabytes of data that we have behind our firewalls that inform the insights that help. Our clients with their mission critical priorities. We are going to keep improving our products. As you know, as Gene highlighted, the rollout of our AskGartner tool is a step in that direction. That is not the only thing we have done from a product innovation perspective, but it is certainly one worth highlighting. We are going to continue to bang away at those things to make sure that we are the best, most cost effective way to help our executive clients accomplish their mission critical priorities. Jeff, the other thing I'd add is we are training all of our sales and service delivery people on how to, if a client has a question like. On how to answer that question. Directly in the way I just described, so that a prospect or client understands kind of what we're used for and why it's so valuable. Got it. For AskGartner, can you help us better understand like what. Service tiers, it's going to be available. And just what exactly is the rollout process or time to add? Yeah. So AskGartner is a gen AI tool that clients can use to get access to our research. Again, it uses our research only, and so it's a great reflection of helping clients on their pitch critical priorities like I talked about. Yeah. In any event, as I mentioned on my prepared remarks, we've had it in trial for some period of time. We want to make sure it was great. Clients love it, the clients have been using it. We're rolling out as fast as we can, and you can think about it being rolling out several thousand clients per month until we get all of our clients on, which we expect will be by the end, they're by the. End of the year. By the way, the client sort of says, hey, it's important for me to have it, move them to the top of the queue and get them in there, even though they were slated to a later point in time. I guess what I'm wondering is. It is available for like the read only. Gartner digital subscribers or is it only available for the higher service tiers where they have access to live engagement with analysts? It is available to all of our Lexus users that we have rolled it out to. To named, you know, named licensed users. Again, there are some product carve outs where it won't be enabled, but that's a small fraction of our contract value. By the end of the year, our goal is to have all of the licensed users that we want enabled with AskGartner. Okay, thank you. Thank you. Our next question coming from the line of Surinder Thind with Jefferies. Your line is now open. Thank you. Just following up on the idea of the behavior of clients around tariffs. Just any color around any differences you might have seen between perhaps your U.S. versus your international clients. I noticed you specifically called out Canada and Australia. I'd say in terms of companies impacted by tariffs, there's no difference between whether they're an automotive company in Europe or Japan or in the U.S. They're basically all affected the same way, which we described earlier. There's a second set of things going on, which is Craig mentioned Canada and Australia. In Canada, what's going on is there's been a first, the Canadians changed the procurement processes some time ago to make it more difficult to buy. We worked our way through with clients there and again, we're working with the clients on that. There has been, in some cases, particularly in the public sector, a reaction against some of the U.S. policies and reactions that maybe we shouldn't buy from American companies. In the case of Australia, there's an election recently in May and whenever there's an election in Australia, it is often that there are a lot of changes in the government and so purchases and renewals stop for a few months while they get a new, they call it the machinery of government, in place. So it's kind of different issues that are largely unrelated to the tariffs. That's helpful. When we think about just headcount, headcount expectations, any incremental color there, it sounds like you're at a good headcount perspective. There was anticipation of maybe a growth later in the year. How should we think about that in light of just current trends continuing through the end of the year? Hey, Surinder. It's Craig from a, you know, QBH perspective, which I assume when you're saying headcount, you're focused IEF and QBH colors. We have invested a lot in growing the capacity of our QBH over the last several years and last decades. Actually, if you go back, we're at a point now where we've got over 5,000 frontline QBH in both GTS and GBS, and we fundamentally believe that there is a lot of productivity upside across both GTS and GBS that will be part of that pathway back to double-digit growth in CV that both Gene and I highlighted. We are, of course, remaining very agile in our planning around where we invest and where we do contract. As you'd imagine, we have reduced number. Of sales territories in the U.S. federal government. Just because there's less business there now, we're keeping our best people and keeping them fully engaged, and they're still working with their clients and prospects across U.S. Fed. We've taken the territory down there in line with the declines that we've seen in that business across the rest of the portfolio. We have a practice which we call territory optimization, which is every time we see turnover, we take a look to see if there's a better investment for us to make. We are very focused on doing that, with the thinking being that trading out poor performing territories or less profitable territories for territories with more opportunity in the short, medium, and long term is a no brainer to do. While it may appear that headcount or territories are flat, know that under the covers we are always doing this optimization of shutting down lower performing and less profitable territories and reinvesting in what we believe to be higher opportunity. Higher profitability territories. That all said, our expectation for this year is to end the year roughly flattish from a QBH perspective. As we start to reaccelerate across 2026 and into 2027, we will then turn back on the QBH growth that we know is an important input into driving sustained double-digit growth in 2027, 2028 and beyond. Thank you. Thank you. Our next question coming from the lineup. Jason Haas with Wells Fargo. Your line is now open. Good morning, and thanks for taking my questions. are some comments in the prepared remarks. About focusing the salesforce to ensure that your customers are getting the full value of the Gartner subscription. Is there any way to dimensionalize like what percentage of your customers do you see now is not getting the full value of the Gartner subscript on? Thank you. Jason. When you subscribe to Gartner, you get access to our content. You also get access to our experts. You can call the experts. In many of our products, you get a ticket for a conference. You have the ability to meet peers both in person as well as electronically. We have a thing called contract reviews, which basically allow a client who's thinking about buying something to say, am I getting the right terms, do I have the right bill of materials? All those kinds of things. We have some tools that are very helpful at maturity models. Those are examples. We have quite a suite of services, and not all of our clients use all those services, even though many of them are very high value. One of the things we're doing now is to make sure that our sales and service delivery people know the full suite, even if they were new to Gartner, they've been here three months, whatever, that we train with actually on that. They can go out and talk to clients, especially ones that may not be using all those extra services. A good example actually is in peer, where we have tens of thousands of clients that use our peer interactions. They value it incredibly highly. You can do it electronically or in person. We have tens of thousands that use it. We have tens of thousands that could use it and aren't yet, generally because they just haven't been made aware of it. We're trying to make sure clients are aware of all these sources of value, of which a lot of them are very high, even though not using it today. Got it. That's very helpful. As a follow up question, recognize this came up a few times. You talked about the fact that every time you had a cancellation, you'll find. Out what the reason was. Are you able to give us any? What percentage of folks are citing each usage of like a publicly available large language model and therefore, you know. Not continuing to Gartner subscription. Is that coming up at all? What percentage is that? Yeah, that's one of the options. It's not material. It's basically, you know, it's essentially unmeasurable. Okay, that's very helpful. Thank you. Thank you. Our next question coming from Jeff Silber with BMO Capital Markets. Your line is now open. Thanks so much. I know it's late. I'll just ask. One wanted to focus on the number of client enterprises. It's been going down at least in GTS for the past couple years and now we're seeing it in GBS. Is it just that, you know, clients are maybe centralizing the decision making process and buying as one entity as opposed to multiple entities? I know there's probably some federal government impact this past quarter, but it's been going down for a while, so any color would be great. Thanks. Hi Jeff, good morning. It's Craig. You know, the biggest driver that we've seen on the enterprise count has been small tech vendor. While small tech vendor, our small tech vendor business is improving and accelerating, there's still higher than average churn amongst that client base. As you know, with enterprises, everyone counts as one regardless of spending. We just see very high churn amongst our small tech vendors. That's the biggest thing driving that enterprise count that you're looking at. I appreciate the call, thanks. Thank you. I'm showing there are no further questions in queue. I will turn the call back over to Gene Hall for any closing remarks. Summarizing, there are two things I'd like you to take away from today's discussion. First, AI is an important opportunity for Gartner across several dimensions. It's the highest demand topic that we're helping our clients with today. We want AskGartner to provide faster, easier access to Insights and we're improving internal efficiency with AI tools. Second, we're making adaptations that will give us a clear path back to double digit growth. Thanks for joining us today and I look forward to updating you again next quarter. This concludes today's conference. Thank you for your participation, and you may now disconnect.