This summary is based on the first quarter fiscal 2008 earnings call conducted by Gartner Inc. (IT: chart) on May 8, 2008.

Management:

- Group Vice President, Gartner, Inc.: Henry A. Diamond
- Chief Executive Officer: Eugene A. Hall
- Executive Vice President and Chief Financial Officer: Christopher J. Lafond

Key Investors Issues

- Earnings from continuing operations were $14.59 million or 14 cents a share, an increase of 63%.
- Revenue grew 10% to $290 million from $264.2 million in the prior year.
- The firm repurchased 3.6 million shares of its stock for $66 million.

First Quarter Highlights

Earnings from continuing operations were $14.59 million or 14 cents a share, an increase of 63% versus $8.98 million or 9 cents a share in the prior year as research contract value increased 17% year over year to a record $778 million.

- Total revenue grew 10% to $290 million from $264.2 million in the prior year principally driven by strong, double-digit growth in the Company''s Research segment resulting in a 164% increase in net income to $22 million.
- The company generated $14 million of operating cash flow versus a cash use of $200,000 in the prior year, deploying $7.5 million for capital expenditures.
- The company had total debt of $421 million and cash on the balance sheet of $96 million.

SG&A increased by $16 million or 14% year over year, including an $4 million adverse impact from foreign exchange, reflecting the continued investment in the sales organization, which grew headcount by 120, or 17%.

- The firm repurchased 3.6 million shares of its stock for $66 million and the repurchasing of stock remains a compelling use of capital and in April alone, repurchased an additional 1.7 million shares at a total cost of $37 million.
- The firm successfully closed on a new $150 million term loan with very attractive terms, the proceeds from which were used to pay down the balance on the revolving credit facility.

Research Segment:

- Revenue increased 19% year-over-year to $189.5 million and gross contribution margin improved 3 percentage points to 66%.
- Research contract value was a record $778.4 million, up 17% year-over-year and client and wallet retention rates were 82% and 100%.
- Role-based product offerings were a major contributor to the strong growth in research contract value as Gartner for IT leaders and Gartner for Business leaders, accounted for $236 million of contract value, up over 120% from last year.
- The firm is also seeing very strong early acceptance of Gartner for IT Executives, which is the new role-based product for CIOs.

The role-based products collectively now account for more than 30% of the contract value, up from zero only two years ago.

- They have helped both attract new clients and sell additional subscriptions and upgrades to the existing clients, resulting in wallet retention remaining at over 100% for the past five consecutive quarters.
- The firm will continue to introduce new role-based products and enhancements to the existing products and expect them to represent a substantial driver of the growth going forward.
- The operating leverage inherent in the research business, together with tight cost controls drove a three percentage point increase in gross contribution margin over last year.

The firm continues to see solid growth in new business with approximately two-thirds of the year-over-year increase in contract value coming from new client enterprises that it was not working with 12 months ago.

- In addition to the success the firm is having at attracting new business with new clients, the firm is also driving growth by further penetrating the existing clients with additional research subscriptions and upgrading them to the role-based products.
- There is strong demand for products, both in terms of renewals and new business, stability in pricing, and good sales force productivity.
- Some clients are being more thoughtful on spending but to date, there is no meaningful indications that the economic environment has impacted the growth outlook of the research business.

- In consulting, the firm has been successful in increasing both the size and length of the engagements, which has the effect of both increasing utilization and improving the predictability of revenue.
- Revenue was up 14% to $78.1 million and attendees grew 9% year over year, reflecting the growth in the eight events that were held in 2007 and 2008, plus the revenue added from the three new events that were launched this year.
- It also continues to higher more senior level consultants who have business development responsibilities in addition to consulting delivery.
- The firm ended the quarter with a strong backlog, up 10% year over year, which positions it very well to meet the guidance for consulting revenue growth for the full year.

Gross contribution margin increased three points, three percentage points year over year to 40%, as the firm continued to improve its consultants’ productivity and focus on larger, more profitable engagements.

- Utilization was 72%, up five points year over year and above the target of 70%.
- The average engagement size increased 30% to 321,000 and the average billing rate was up, which helped drive a 13% year over year increase in the annual revenue per billable headcount up to $464,000 per year.

- Events revenue was $20.6 million, as compared to $26.9 million in 2007, and gross contribution margin was 44%, with comparisons impacted by the timing and mix of events.
- The Company held 12 events with 5,256 attendees, as compared to 12 events with 7,392 attendees in 2007.