Research and advisory firm Gartner (NYSE: IT) announced better-than-expected revenue in Q2 CY2026, but sales were flat year on year at $1.68 billion. Its non-GAAP profit of $4.37 per share was 17.1% above analysts’ consensus estimates.

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Company Overview

With over 2,500 research experts guiding organizations through complex technology landscapes, Gartner (NYSE: IT) provides research, advisory services, and conferences that help executives make better decisions about technology and other business priorities.

Revenue Growth

A company’s long-term sales performance is one signal of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years.

With $6.46 billion in revenue over the past 12 months, Gartner is one of the larger companies in the business services industry and benefits from a well-known brand that influences purchasing decisions.

As you can see below, Gartner’s sales grew at a solid 8.1% compounded annual growth rate over the last five years. This shows it had high demand, a useful starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. Gartner’s recent performance shows its demand has slowed as its annualized revenue growth of 3.3% over the last two years was below its five-year trend. We’re wary when companies in the sector see decelerations in revenue growth, as it could signal changing consumer tastes aided by low switching costs.

We can better understand the company’s sales dynamics by analyzing its constant currency revenue, which excludes currency movements that are outside their control and not indicative of demand. Over the last two years, its constant currency sales averaged 3.4% year-on-year growth. Because this number aligns with its reported revenue growth, we can see that foreign exchange has not had a meaningful impact on topline.

This quarter, Gartner’s $1.68 billion of revenue was flat year on year but beat Wall Street’s estimates by 1.8%.

Looking ahead, sell-side analysts expect revenue to grow 1.3% over the next 12 months, a slight deceleration versus the last two years. This projection doesn’t excite us and suggests its products and services will see some demand headwinds.

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Adjusted Operating Margin

Gartner’s adjusted operating margin has more or less stayed the same over the last 12 months , averaging 19% over the last five years. This profitability was elite for a business services business thanks to its efficient cost structure and economies of scale.

Analyzing the trend in its profitability, Gartner’s adjusted operating margin might have fluctuated slightly but has generally stayed the same over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

This quarter, Gartner generated an adjusted operating margin profit margin of 25%, up 5.6 percentage points year on year. This increase was a welcome development and shows it was more efficient.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth — for example, a company could inflate its sales through excessive spending on advertising and promotions.

Gartner’s EPS grew at 16.4% compounded annual growth rate over the last five years, higher than its 8.1% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Gartner, its two-year annual EPS growth of 10.7% was lower than its five-year trend. We hope its growth can accelerate in the future.

In Q2, Gartner reported adjusted EPS of $4.37, up from $3.53 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Gartner’s full-year EPS to grow 1.4% from $14.39 to $14.58.

Key Takeaways from Gartner’s Q2 Results

It was good to see Gartner beat analysts’ EPS expectations this quarter. We were also happy its revenue outperformed Wall Street’s estimates. Zooming out, we think this was a good print with some key areas of upside. The stock traded up 6.3% to $161.06 immediately after reporting.

Sure, Gartner had a solid quarter, but if we look at the bigger picture, is this stock a buy? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).