Gene Hall: Yes. George great question. So spot on your assessment. I guess, I would say, a couple of things. So, one is that clearly our margins are structurally higher today than they were in 2016 or 2019. As you know, there are a lot of factors that can influence margins on a quarter-to-quarter basis or over the course of the year. As it stands right now with coming out of Q1 sort of putting aside foreign exchange for a little bit, we modestly outperformed our expectations or our operating plan on revenue and then had modest upside from an OpEx perspective as well. We have flowed that through the balance of the year, and what you see is a guidance that implies a 23.5% EBITDA margin for the year — for 2024. In terms of how to think about future years, we’re only one quarter into 2024.
We’ll give 2025 guidance in February of 2025. But again, a framework or a way to sort of think about it is with the QBH growth that were — we’ve got baked into the 2024 plan, we’re growing our expenses in high single digits. And that’s obviously consistent with our medium-term framework on how we want to run this over the long-term to drive long-term sustained double-digit top line growth. Obviously, today with decelerating CV that puts a little bit of pressure on the margins, as the revenue growth is not as great as the expense growth. That said, we’re really disciplined around where we’re spending and how we manage our expenses. And we’re finding that balance between delivering on our margin expectations and making sure that we are investing appropriately to drive future growth.
And then the last thing, I’d say is, over the medium to long-term, there is operating leverage in the business, and we expect to modestly expand our margins each and every year over the medium to long-term.
George Tong: Very helpful. Thank you.
Operator: Thank you. And we will take our last question from Jeff Silber from BMO Capital Markets. Your line is now open.
Unidentified Analyst : Hey, thanks. This is Ryan on for Jeff. On the renewal activity over the past couple of quarters can you compare the terms of those renewals to all the new business you signed two, three years ago? In particular are you seeing greater preference for longer contracts? And then what sort of price escalators are typically embedded in there if anything worth calling out?
Craig Safian: Hey, good morning, Ryan. I’d say, it’s been pretty stable and normal. So our standard contract is essentially a two-year contract. I think somewhere around 70% of our contract value are multiyear contracts two or three years, but the bulk of them are actually two-year. To your point we do build price escalators into those multiyear contracts and sort of aligns with what our pricing expectation is when we sign the contract. So think an escalator of between 3% and 5% on the anniversary of those contracts. And I’d say in this environment, we’re selling roughly same amount of multiyear contracts that we sold 12 months ago or 18 months ago. The team is very focused on continuing to improve that number. It’s just — it’s great for our economics and it’s actually great for our clients as well, because their challenges are not bounded by a 12-month time frame.
They’re bigger than that. So signing 24-month contracts or 36-month contracts makes sense both from our business model perspective, but almost as importantly or more importantly from a client perspective and that hasn’t really changed.
Ryan Griffin: Got it. Thank you. And then just on the quarterly cadence, what are the meaningful hiring quarters this year? And then just more broadly, how is the hiring market currently for tech talent?
Gene Hall: So let me start with the tech talent market. So our turnover is very, very low. It’s near record lows. And so that’s really good for us because it helped increase tenure. On the hiring side, we have a great associate value proposition and a great recruiting team that does an incredible job communicating that value proposition. And so we get a lot of demand. Just in the prior report, we get approximately 200 applicants for every single job. And if you benchmark that, that is way off the charts. So we’re a very, very attractive employer. And that looks — this combination of being a very attractive employer lets us hire great people. And then once we’re here, we retain them which is why we have such low turnover. And we work this issue on both the recruiting side and the retention side of our associates.
And so that keeps getting better and better over time which is one of the things that’s driving associate tenure up which in turn over time drives productivity up.
Craig Safian: And then Ryan on the timing of the phasing, hiring dates can be — they can happen on June 29 and they’re in the second quarter number or they could happen on July 1 and then they’re in the third quarter number. We’re very focused on making sure that we hire the right amount of people over the course of this year, so that we enter 2025 with the right number of sellers ready to go. And so, when we talk about the mid to high single-digit year-over-year growth in quota-bearing hires across GTS and GBS, that’s really a December to December measure. But that’s really the most important measure because the people we hire over the course of 2024 don’t have a huge impact on 2024. But if we have them in seat and trained with a little bit of experience rolling into 2025, they can actually have a meaningful impact on 2025 and 2026 and beyond.
So, as you think about the QBH growth of mid to high single digits, that’s really where we want to end the year 2024, so that we’re very well positioned as we start 2025.
Ryan Griffin: Great. Thank you.
Operator: And that does conclude our question-and-answer session for today’s conference. I’ll now turn the call back over to Gene Hall for any closing remarks.
Gene Hall: Well, here’s what I’d like you to take away from today’s call. Gartner delivered financial results ahead of expectations and 10% contract value growth with enterprise function leaders. We have a vast addressable market opportunity. We have a strong value proposition. Looking ahead we’re well positioned to continue our sustained record of success far into the future. We’ll continue to create value for our shareholders by providing actual objective insights to our clients prudently investing for future growth, generating free cash flow well in excess of net income and returning capital to our shareholders through our repurchase program. Thanks for joining us today and we look forward to updating you again next quarter.
Operator: This concludes today’s conference call. Thank you for your participation. You may now disconnect. Everyone have a wonderful day.
