Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The purpose of this Management’s Discussion and Analysis (“MD&A”) is to facilitate an understanding of significant factors influencing the quarterly operating results, financial condition and cash flows of Gartner, Inc. Additionally, the MD&A conveys our expectations of the potential impact of known trends, events or uncertainties that may impact future results. You should read this discussion in conjunction with our Condensed Consolidated Financial Statements and related notes included in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Form 10-K”). Historical results and percentage relationships are not necessarily indicative of operating results for future periods. References to “Gartner,” the “Company,” “we,” “our” and “us” in this MD&A are to Gartner, Inc. and its consolidated subsidiaries.

FORWARD-LOOKING STATEMENTS

In addition to historical information, this Quarterly Report on Form 10-Q contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are any statements other than statements of historical fact, including statements regarding our expectations, beliefs, hopes, intentions, projections or strategies regarding the future. In some cases, forward-looking statements can be identified by the use of words such as “may,” “will,” “expect,” “should,” “could,” “believe,” “plan,” “anticipate,” “estimate,” “predict,” “potential,” “continue” or other words of similar meaning.

We operate in a very competitive and rapidly changing environment that involves numerous known and unknown risks and uncertainties, some of which are beyond our control. Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future quarterly and annual revenues, operating income, results of operations and cash flows, as well as any forward-looking statement, are subject to change and to inherent risks and uncertainties, such as those disclosed or incorporated by reference in our filings with the Securities and Exchange Commission. Important factors that could cause our actual results, performance and achievements, or industry results to differ materially from estimates or projections contained in our forward-looking statements include, among others, the following: our ability to maintain and expand our products and services; our ability to keep pace with technological developments in artificial intelligence (“AI”) and comply with evolving AI regulations; our ability to achieve continued customer renewals and achieve new contract value, backlog and deferred revenue growth in light of competitive pressures; our ability to grow or sustain revenue from individual customers; our ability to expand or retain our customer base; our ability to carry out our strategic initiatives and manage associated costs; the timing of conferences and meetings, in particular our Gartner Symposium/Xpo series that normally occurs during the fourth quarter; our ability to achieve and effectively manage growth, including our ability to integrate our acquisitions and consummate and integrate future acquisitions; our ability to attract and retain a professional staff of analysts and consultants as well as experienced sales personnel upon whom we are dependent, especially in light of labor competition; our ability to successfully compete with existing competitors and potential new competitors; our ability to enforce and protect our intellectual property rights; the impact of cybersecurity incidents or other disruptions to our information systems; our ability to pay our debt obligations; the impact of global economic and geopolitical conditions, including inflation and recession; uncertain effects, both direct and indirect, of changes and volatility in tariffs and trade policies; risks associated with the creditworthiness, budget cuts, priorities and shutdown of governments and agencies; additional risks associated with international operations, including foreign currency fluctuations; the impact on our business resulting from changes in international conditions, including those resulting from the conflict in the Middle East, the war in Ukraine and current and future sanctions imposed by governments or other authorities; the impact of restructuring and other charges on our businesses and operations; our ability to meet sustainability commitments and comply with applicable regulatory requirements, as well as potential reactions by customers to these commitments; the impact of changes in tax policy (including global minimum tax legislation) and heightened scrutiny from various taxing authorities globally; changes to laws and regulations; and other risks and uncertainties. The potential fluctuations in our operating income could cause period-to-period comparisons of operating results not to be meaningful and could provide an unreliable indication of future operating results. A description of the risk factors associated with our business is included under “Risk Factors” in Item 1A. of the 2024 Form 10-K, which is incorporated herein by reference.

Forward-looking statements are subject to risks, estimates and uncertainties that could cause actual results to differ materially from those discussed in, or implied by, the forward-looking statements. Factors that might cause such a difference include, but are not limited to, those listed above or described under “Risk Factors” in Item 1A of the 2024 Form 10-K. Readers should not place undue reliance on these forward-looking statements, which reflect management’s opinion only as of the date on which they were made. Forward-looking statements in this Quarterly Report on Form 10-Q speak only as of the date hereof, and forward-looking statements in documents attached that are incorporated by reference speak only as of the date of those documents. Except as required by law, we disclaim any obligation to review or update these forward-looking statements to reflect events or circumstances as they occur.

BUSINESS OVERVIEW

Gartner, Inc. (NYSE: IT) delivers actionable, objective business and technology insights that drive smarter decisions and stronger performance on an organization’s mission-critical priorities.

We deliver our products and services globally through three business segments – Business and Technology Insights, Conferences and Consulting, as described below. In the second quarter of 2025, we renamed our segment previously referred to as Research to Business and Technology Insights (or “Insights”) to reflect the nature of the value we provide to clients. Our expert guidance and tools enable faster, smarter decisions and stronger performance on an organization’s mission-critical priorities.

• Insights** equips executives and their teams from every function and across all industries with actionable, objective business and technology insights, guidance and tools. Our experienced experts deliver all this value informed by an unmatched combination of practitioner-sourced and data-driven research to help our clients address their mission critical priorities.

• Conferences** provides executives and teams across an organization the opportunity to learn, share and network. From our Gartner Symposium/Xpo series, to industry-leading conferences focused on specific business roles and topics, to peer-driven sessions, our offerings enable attendees to experience the best of Gartner insights and guidance.

• Consulting** serves senior executives leading technology-driven strategic initiatives leveraging the power of Gartner’s actionable, objective insights. Through custom analysis and on-the-ground support we enable optimized technology investments and stronger performance on our clients’ mission critical priorities.

As of June 30, 2025 we had 20,994 employees globally, an increase of 2.4% from June 30, 2024.

Recent Developments

Our Insights contract value with the US federal government was approximately $200.0 million at June 30, 2025, as compared to approximately $275.0 million at December 31, 2024. Over 60% of our US federal contracts have transacted in the first half of 2025, and slightly less than half of that contract value was retained. In addition to the non-renewals, we have received notices of termination-for-convenience from various US government agencies for approximately $20.0 million of contracts that are primarily scheduled to expire in the second half of 2025.

As the current geopolitical environment remains unpredictable, we continue to monitor and evaluate the impact, both direct and indirect, of government actions that could adversely impact our business operations and financial performance.

On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We are currently assessing its impact on our consolidated financial statements.

BUSINESS MEASUREMENTS

We believe that the following business measurements are important performance indicators for our business segments:

BUSINESS SEGMENT						BUSINESS MEASUREMENT
Insights						Contract value represents the dollar value attributable to all of our subscription-related contracts. It is calculated as the annualized value of all contracts in effect at a specific point in time, without regard to the duration of the contract. Contract value primarily includes Insights deliverables for which revenue is recognized on a ratable basis, as well as other deliverables (primarily Conferences tickets) for which revenue is recognized when the deliverable is utilized. Comparing contract value year-over-year not only measures the short-term growth of our business, but also signals the long-term health of our Insights subscription business since it measures revenue that is highly likely to recur over a multi-year period. Our contract value consists of Global Technology Sales contract value, which includes sales to users and providers of technology, and Global Business Sales contract value, which includes sales to all other functional leaders.
						Client retention rate represents a measure of client satisfaction and renewed business relationships at a specific point in time. Client retention is calculated on a percentage basis by dividing our current clients, who were also clients a year ago, by all clients from a year ago. Client retention is calculated at an enterprise level, which represents a single company or customer.
						Wallet retention rate represents a measure of the amount of contract value we have retained with clients over a twelve-month period. Wallet retention is calculated on a percentage basis by dividing the contract value of our current clients, who were also clients a year ago, by the contract value from a year ago, excluding the impact of foreign currency exchange. When wallet retention exceeds client retention, it is an indication of retention of higher-spending clients, or increased spending by retained clients, or both. Wallet retention is calculated at an enterprise level, which represents a single company or customer.
Conferences						Number of destination conferences represents the total number of hosted in-person conferences completed during the period. Single day, local meetings are excluded.
						Number of destination conferences attendees represents the total number of people who attend in-person conferences. Single day, local meetings are excluded.
Consulting						Consulting backlog represents future revenue to be derived from in-process consulting and benchmark analytics engagements.
						Utilization rate represents a measure of productivity of our consultants. Utilization rates are calculated for billable headcount on a percentage basis by dividing total hours billed by total hours available to bill.

EXECUTIVE SUMMARY OF OPERATIONS AND FINANCIAL POSITION

The fundamentals of our strategy include a focus on creating actionable business and technology insights for executives and their teams, delivering innovative and highly differentiated product offerings, building a strong sales capability, providing world class client service with a focus on client engagement and retention, and continuously improving our operational effectiveness.

We had total revenues of $1.7 billion during the second quarter of 2025, an increase of 6% compared to the second quarter of 2024. During the second quarter of 2025, revenues for Insights increased by 4%, Conferences revenue increased by 14% and Consulting revenue increased by 9%, compared to the second quarter of 2024. For a more complete discussion of our results by segment, see Segment Results below.

For the second quarter of 2025 and 2024, we had net income of $240.8 million and $229.5 million, respectively, and diluted net income per share of $3.11 and $2.93, respectively. Cash provided by operating activities was $0.7 billion and $0.6 billion during the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, we had $2.2 billion of cash and cash equivalents and approximately $0.7 billion of available borrowing capacity on our revolving credit facility. For a more complete discussion of our cash flows and financial position, see the Liquidity and Capital Resources section below.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

For information regarding our critical accounting policies and estimates, please refer to Part II, Item 7, “Critical Accounting Policies and Estimates” contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. There have been no material changes to the critical accounting policies previously disclosed in that report.

RECENTLY ISSUED ACCOUNTING STANDARDS

The FASB has issued accounting standards that have not yet become effective and that may impact the Company’s consolidated financial statements or its disclosures in future periods. Note 1 — Business and Basis of Presentation in the Notes to Condensed Consolidated Financial Statements provides information regarding those accounting standards.

RESULTS OF OPERATIONS

Consolidated Results

The table below presents an analysis of selected line items and period-over-period changes in our interim Condensed Consolidated Statements of Operations for the periods indicated (in thousands).

			Three Months Ended June 30, 2025						Three Months Ended June 30, 2024						Increase (Decrease)						Increase (Decrease) %
Total revenues			$	1,686,454					$	1,595,060					$	91,394					6		%
Costs and expenses:
Cost of services and product development			531,731						513,314						18,417						4
Selling, general and administrative			776,888						712,071						64,817						9
Depreciation			30,535						27,594						2,941						11
Amortization of intangibles			20,204						22,940						(2,736)						(12)
Acquisition and integration charges			—						358						(358)						(100)
Operating income			327,096						318,783						8,313						3
Interest expense, net			(11,801)						(19,990)						(8,189)						(41)
Other income, net			2,498						504						1,994						396
Less: Provision for income taxes			77,010						69,749						7,261						10
Net income			$	240,783					$	229,548					$	11,235					5		%

			Six Months Ended June 30, 2025						Six Months Ended June 30, 2024						Increase (Decrease)						Increase (Decrease) %
Total revenues			$	3,220,584					$	3,067,986					$	152,598					5		%
Costs and expenses:
Cost of services and product development			1,006,761						972,755						34,006						3
Selling, general and administrative			1,507,196						1,401,904						105,292						8
Depreciation			59,401						53,911						5,490						10
Amortization of intangibles			42,098						45,930						(3,832)						(8)
Acquisition and integration charges			—						818						(818)						(100)
Operating income			605,128						592,668						12,460						2
Interest expense, net			(25,214)						(39,209)						(13,995)						(36)
Other income, net			4,887						5,395						(508)						(9)
Less: Provision for income taxes			133,079						118,761						14,318						12
Net income			$	451,722					$	440,093					$	11,629					3		%

In addition to GAAP results, we provide foreign currency neutral dollar amounts and percentages for our revenues, certain expenses, contract values and other metrics. These foreign currency neutral dollar amounts and percentages eliminate the effects of exchange rate fluctuations and thus provide a more accurate and meaningful trend in the underlying business performance being measured. We calculate foreign currency neutral dollar amounts by converting the underlying amounts in local currency for different periods into U.S. dollars by applying the same foreign exchange rates to all periods presented.

Total revenues for the three months ended June 30, 2025 were $1.7 billion, an increase of $91.4 million, or 6% compared to the same period in 2024 on a reported basis and 5% excluding the foreign currency impact. Total revenues for the six months ended June 30, 2025 were $3.2 billion, an increase of $0.2 billion, or 5% compared to the same period in 2024 on both a reported basis and excluding the foreign currency impact. Refer to the section of this MD&A below entitled “Segment Results” for a discussion of revenues and results by segment.

Cost of services and product development was $531.7 million during the three months ended June 30, 2025, an increase of $18.4 million compared to the same period in 2024, or 4% on a reported basis and 2% excluding the foreign currency impact. The increase in Cost of services and product development during the three months ended June 30, 2025 was primarily due to a $12.2 million increase in personnel expenses associated with merit increases. Cost of services and product development as a percent of revenues was 32% for each of the three months ended June 30, 2025 and 2024. Cost of services and product development was $1.0 billion during the six months ended June 30, 2025, an increase of $34.0 million compared to the same period in 2024, or 3% on both a reported basis and excluding the foreign currency impact. The increase in Cost of services and product development during the six months ended June 30, 2025 was primarily due to a $31.2 million increase in personnel expenses associated with merit increases. Cost of services and product development as a percent of revenues was 31% and 32% for the six months ended June 30, 2025 and 2024, respectively.

Selling, general and administrative (“SG&A”) expense was $776.9 million during the three months ended June 30, 2025, an increase of $64.8 million compared to the same period in 2024, or 9% and on a reported basis and 8% excluding the foreign currency impact. The increase in SG&A expense during the three months ended June 30, 2025 was primarily a result of a $40.9 million increase in personnel expenses due to increased headcount and merit increases. SG&A expense was $1.5 billion during the six months ended June 30, 2025, an increase of $105.3 million compared to the same period in 2024, or 8% on both reported basis and excluding the foreign currency impact. The increase in SG&A expense during the six months ended June 30, 2025 was primarily a result of an $81.6 million increase in personnel expenses due to increased headcount and merit increases. The number of quota-bearing sales associates in Global Technology Sales increased by 3% to 3,695 and in Global Business Sales, increased by 10% to 1,339 compared to June 30, 2024. On a combined basis, the total number of quota-bearing sales associates increased by 5% when compared to June 30, 2024. SG&A expense as a percent of revenues was 46% and 45% during the three months ended June 30, 2025 and 2024, respectively. SG&A expense as a percent of revenues was 47% and 46% during the six months ended June 30, 2025 and 2024, respectively.

Depreciation increased by 11% and 10% during the three and six months ended June 30, 2025, respectively, compared to the same periods in 2024. The increase for the three and six months ended June 30, 2025 was primarily due to increased software additions during the last twelve months.

Amortization of intangibles decreased by 12% and 8% during the three and six months ended June 30, 2025, respectively, compared to the same periods in 2024, due to certain intangible assets becoming fully amortized in 2024.

Acquisition and integration charges decreased by $0.4 million and 0.8 million during the three and six months ended June 30, 2025, respectively, compared to the same periods in 2024.

Operating income was $327.1 million and $318.8 million during the three months ended June 30, 2025 and 2024, respectively. Operating income was $605.1 million and $592.7 million during the six months ended June 30, 2025 and 2024, respectively. The increases in operating income for the three and six months ended June 30, 2025 as compared to the prior year periods were primarily due to increased revenues, partially offset by increases in cost of services and product development and selling, general and administrative expenses.

Interest expense, net decreased by $8.2 million and $14.0 million during the three and six months ended June 30, 2025, respectively, compared to the same periods in 2024. The decrease for the three and six months ended June 30, 2025 was due to increased interest income, primarily as a result of higher cash balances than the prior year.

Other income, net for the periods presented herein included the net impact of foreign currency gains and losses from our hedging activities. Other income, net for the three months ended June 30, 2025 and 2024 also included gains of $0.3 million and $0.6 million, respectively, on de-designated interest rate swaps. Other income, net for the six months ended June 30, 2025 and 2024 also included gains of $0.4 million and $5.0 million, respectively, on de-designated interest rate swaps.

The provision for income taxes was $77.0 million and $69.7 million for the three months ended June 30, 2025 and 2024, respectively and $133.1 million and $118.8 million for the six months ended June 30, 2025 and 2024, respectively. The effective income tax rate was 24.2% and 23.3% for the three months ended June 30, 2025 and 2024, respectively and 22.8% and 21.3% for the six months ended June 30, 2025 and 2024, respectively. While all periods include benefits related to research and development tax credits, the current year effective income tax rates reflect a lower benefit than the same periods in the prior year.

Net income for the three months ended June 30, 2025 and 2024 was $240.8 million and $229.5 million, respectively, while net income for the six months ended June 30, 2025 and 2024 was $451.7 million and $440.1 million, respectively. Our diluted net income per share during the three months ended June 30, 2025 increased by $0.18. The increases in net income during the three and six months ended June 30, 2025 were primarily due to an increase in revenues and lower interest expense, net, partially offset by increases in operating expenses and the provision for income taxes.

SEGMENT RESULTS

We evaluate reportable segment performance and allocate resources based on gross contribution margin. Gross contribution is defined as operating income or loss excluding certain Cost of services and product development expenses, SG&A expenses, Depreciation, Amortization of intangibles, Acquisition and integration charges and Gain from sale of divested operation. Gross contribution margin is defined as gross contribution as a percent of revenues.

Reportable Segments

The sections below present the results of the Company’s three reportable business segments: Insights (formerly Research), Conferences and Consulting.

Insights

			As Of And For The Three Months Ended June 30, 2025						As Of And For The Three Months Ended June 30, 2024						Increase (Decrease)						Percentage Increase (Decrease)						As Of And For The Six Months Ended June 30, 2025						As Of And For The Six Months Ended June 30, 2024						Increase (Decrease)						Percentage Increase (Decrease)
Financial Measurements:
Revenues (1)			$	1,319,453					$	1,265,992					$	53,461					4		%				$	2,641,280					$	2,534,164					$	107,116					4		%
Gross contribution (1)			$	974,675					$	933,121					$	41,554					4		%				$	1,959,198					$	1,877,690					$	81,508					4		%
Gross contribution margin			74		%				74		%				—						—						74		%				74		%				—						—
Business Measurements:
Contract Value (1), (3)			$	5,034,000					$	4,799,000					$	235,000					5		%
Global Technology Sales (2):
Contract value (1), (3)			$	3,822,000					$	3,689,000					$	133,000					4		%
Client retention			84		%				83		%				1 point						—
Wallet retention			99		%				101		%				(2) points						—
Global Business Sales (2):
Contract value (1), (3)			$	1,212,000					$	1,110,000					$	102,000					9		%
Client retention			87		%				87		%				—						—
Wallet retention			104		%				106		%				(2) points						—

(1)Dollars in thousands.

(2)Global Technology Sales includes sales to users and providers of technology. Global Business Sales includes sales to all other functional leaders.

(3)Contract values are on a foreign currency neutral basis. Contract values as of June 30, 2024 have been calculated using the same foreign currency rates as 2025.

Insights revenues increased by $53.5 million during the three months ended June 30, 2025 compared to the same period in 2024, or 4% on a reported basis and 3% excluding the foreign currency impact. For the six months ended June 30, 2025, Insights revenue increased by $107.1 million compared to the same period in 2024 or 4% on a reported basis and 5% excluding the foreign currency impact. The increase in revenues during 2025 was primarily due to Insights contract value growth in 2024. The segment gross contribution margin was 74% for both the three and six months ended June 30, 2025 and 2024.

Contract value increased to $5.0 billion at June 30, 2025, or 5% compared to June 30, 2024 excluding the foreign currency impact. The majority of industry sectors grew mid single-digit rates or faster. Growth was led by the energy, manufacturing and healthcare sectors, with public sector having a low single digit decrease. Global Technology Sales (“GTS”) contract value increased by 4% at June 30, 2025 when compared to June 30, 2024. The increase in GTS contract value was primarily due to new business from existing clients. GTS contract value increased by mid single-digit rates or faster for all commercial enterprise sizes and nearly all industry sectors. Global Business Sales (“GBS”) contract value increased by 9% year-over-year, also primarily driven by new business from existing clients. The majority of our GBS practices achieved double-digit growth rates, with the majority of enterprise sizes and sectors growing high single-digits or faster year-over-year as well.

GTS client retention was 84% and 83% as of June 30, 2025 and 2024, respectively, while wallet retention was 99% and 101% as of June 30, 2025 and 2024, respectively. GBS client retention was 87% as of both June 30, 2025 and 2024, while wallet retention was 104% and 106%, respectively. The decrease in GTS and GBS wallet retention was largely due to lower levels of spending by existing clients compared to the same period in 2024.

Conferences

			Three Months Ended June 30, 2025						Three Months Ended June 30, 2024						Increase (Decrease)						Percentage Increase (Decrease)						Six Months Ended June 30, 2025						Six Months Ended June 30, 2024						Increase (Decrease)						Percentage Increase (Decrease)
Financial Measurements:
Revenues (1)			$	211,407					$	186,084					$	25,323					14		%				$	284,004					$	256,153					$	27,851					11		%
Gross contribution (1)			$	121,388					$	108,112					$	13,276					12		%				$	148,770					$	131,367					$	17,403					13		%
Gross contribution margin			57		%				58		%				(1) point						—						52		%				51		%				1 point						—
Business Measurements:
Number of destination conferences (2)			19						16						3						19		%				29						28						1						4		%
Number of destination conferences attendees (2)			28,295						26,369						1,926						7		%				40,206						40,226						(20)						—		%

(1)Dollars in thousands.

(2)Single day, local meetings are excluded.

Conferences revenues increased by $25.3 million during the three months ended June 30, 2025 compared to the same period in 2024, or 14% on a reported basis and 12% excluding the foreign currency impact. The increase in revenues for the three months ended June 30, 2025 was primarily due to increased destination conferences compared to the same period in 2024. We held 19 and 16 destination conferences during the three months ended June 30, 2025 and 2024, respectively, with the increase primarily as a result of three destination conferences moving from the first and third quarters to the second quarter in 2025. Gross contribution increased to $121.4 million during the three months ended June 30, 2025 compared to $108.1 million in the same period last year. The increase in gross contribution during the three ended June 30, 2025 was primarily the result of the increase in revenues, partially offset by an increase in conference-related expenses as a result of holding three additional destination conferences in the second quarter in 2025 compared to the same period in 2024.

For the six months ended June 30, 2025 Conferences revenues increased by $27.9 million compared to the same period in 2024, or 11% on a reported basis and 10% excluding the foreign currency impact. We held 29 and 28 destination conferences during the six months ended June 30, 2025 and 2024, respectively. The increase in revenues for the six months ended June 30, 2025 was primarily due to increased exhibitor revenue compared to the same period in 2024. Gross contribution increased to $148.8 million during the six months ended June 30, 2025 compared to $131.4 million in the same period last year. The increase in gross contribution during the six months ended June 30, 2025 was primarily the result of the increase in revenues, partially offset by an increase in conference-related expenses.

Consulting

			As Of And For The Three Months Ended June 30, 2025						As Of And For The Three Months Ended June 30, 2024						Increase (Decrease)						Percentage Increase (Decrease)						As Of And For The Six Months Ended June 30, 2025						As Of And For The Six Months Ended June 30, 2024						Increase (Decrease)						Percentage Increase (Decrease)
Financial Measurements:
Revenues (1)			$	155,594					$	142,984					$	12,610					9		%				$	295,300					$	277,669					$	17,631					6		%
Gross contribution (1)			$	61,555					$	53,719					$	7,836					15		%				$	114,947					$	108,006					$	6,941					6		%
Gross contribution margin			40		%				38		%				2 points						—						39		%				39		%				—						—
Business Measurements:
Backlog (1), (2)			$	191,100					$	195,000					$	(3,900)					(2)		%
Billable headcount			949						953						(4)						—		%
Consultant utilization			65		%				67		%				(2) points						—						64		%				66		%				(2) points						—

(1)Dollars in thousands.

(2)Backlog is on a foreign currency neutral basis. Backlog as of June 30, 2024 has been calculated using the same foreign currency rates as 2025.

Consulting revenues increased by 9% during the three months ended June 30, 2025 compared to the same period in 2024 on a reported basis and 6% excluding the foreign currency impact, with an increase in labor-based consulting revenue of 3% and an increase in contract optimization revenue of 26%, each on a reported basis. Contract optimization revenue may vary significantly and, as such, revenues for the second quarter of 2025 may not be indicative of results for the remainder of 2025 or beyond. The segment gross contribution margin was 40% and 38% for the three months ended June 30, 2025 and 2024, respectively. The increase in gross contribution margin for the three months ended June 30, 2025 was primarily due to the increase in revenues.

For the six months ended June 30, 2025, Consulting revenues increased 6% compared to the same period in 2024 on both a reported basis and excluding the foreign currency impact, with a decrease in labor-based consulting revenue of 1% and an increase in contract optimization revenue of 30%, each on a reported basis. The segment gross contribution margin for the six months ended June 30, 2025 was flat compared to the same period in 2024.

Backlog decreased by $3.9 million, or 2%, from June 30, 2024 to June 30, 2025, excluding the foreign currency impact.

LIQUIDITY AND CAPITAL RESOURCES

We finance our operations through cash generated from our operating activities and, to a lesser extent, borrowings. Note 7 — Debt in the Notes to Condensed Consolidated Financial Statements provides additional information regarding the Company’s outstanding debt obligations. At June 30, 2025, we had $2.2 billion of cash and cash equivalents and approximately $0.7 billion of available borrowing capacity on the revolving credit facility under our 2024 Credit Agreement. We believe that the Company has adequate liquidity to meet its currently anticipated needs for both the next twelve months and the foreseeable future.

We have historically generated significant cash flows from our operating activities, benefiting from the favorable working capital dynamics of our subscription-based business model in our Insights segment, which is our largest business segment and historically has constituted a significant portion of our total revenues. The majority of our Insights customer contracts are paid in advance and, combined with a strong customer retention rate and high incremental margins, our subscription-based business model has resulted in continuously strong operating cash flow. Cash flow generation has also benefited from our ongoing efforts to improve the operating efficiencies of our businesses as well as a focus on the optimal management of our working capital as we increase sales.

During the fourth quarter of 2024, we entered into an amended lease agreement to significantly reduce the square footage and reduce future lease payments at one of our leased locations. We made installment payments of $24.0 million during each of the fourth quarter of 2024 and the second quarter of 2025 in consideration for the lease amendment.

Our cash and cash equivalents are held in numerous locations throughout the world with 45% held outside the U.S. at June 30, 2025. We intend to distribute a portion of the accumulated undistributed earnings of non-U.S. subsidiaries in conjunction with global restructuring activity and have recorded a modest tax expense for the anticipated impact of such distribution. We continue to assert our intention to reinvest substantially all remaining accumulated undistributed foreign earnings, except in instances where repatriation would result in minimal additional tax.

The table below summarizes the changes in our cash balances for the periods indicated (in thousands).

			Six Months Ended June 30, 2025						Six Months Ended June 30, 2024						Increase (Decrease)
Cash provided by operating activities			$	697,077					$	558,800					$	138,277
Cash used in investing activities			(61,817)						(54,027)						(7,790)
Cash used in financing activities			(419,688)						(553,229)						133,541
Net increase (decrease) in cash and cash equivalents and restricted cash			215,572						(48,456)						264,028
Effects of exchange rates on cash and cash equivalents			48,817						(35,358)						84,175
Beginning cash and cash equivalents and restricted cash			1,933,147						1,319,599						613,548
Ending cash and cash equivalents			$	2,197,536					$	1,235,785					$	961,751

Operating

Cash provided by operating activities was $697.1 million and $558.8 million during the six months ended June 30, 2025 and 2024, respectively. The year-over-year increase was primarily due to the improved timing of collections and lower income tax payments.

Investing

Cash used in investing activities was $61.8 million and $54.0 million during the six months ended June 30, 2025 and 2024, respectively. The increase from 2024 to 2025 was primarily the result of higher leasehold improvements expenditures.

Financing

Cash used in financing activities was $419.7 million and $553.2 million during the six months ended June 30, 2025 and 2024, respectively. We used $437.2 million and $564.7 million of cash for share repurchases during the six months ended June 30, 2025 and 2024, respectively. In March 2024, the Company borrowed $274.4 million under the 2024 Credit Agreement. The initial borrowing was used to repay the outstanding amounts under the 2020 Credit Agreement.

Debt

As of June 30, 2025, the Company had $2.5 billion of principal amount of debt outstanding. Note 7 — Debt in the Notes to Condensed Consolidated Financial Statements provides additional information regarding the Company’s outstanding debt obligations. From time to time, the Company may seek to retire or repurchase its outstanding debt through various methods including open market repurchases, negotiated block transactions, or otherwise, all or some of which may be effected through Rule 10b5-1 plans. Such transactions, if any, depend on prevailing market conditions, our liquidity and capital requirements, contractual restrictions, and other factors, and may involve material amounts.

OFF BALANCE SHEET ARRANGEMENTS

From January 1, 2025 through June 30, 2025, the Company has not entered into any material off-balance sheet arrangements or transactions with unconsolidated entities or other persons.