Gartner sees slowing demand at consulting unit

IT research firm Gartner ​has ⁠forecast annual revenue and earnings below Wall Street expectations, as enterprises scaling back their spending dampened demand for its consulting ‌services.

Shares of the Stamford, Connecticut-based firm ⁠plunged ‌more than 22 percent following ‍the results.

Businesses have been tightening ⁠their spending budgets amid economic headwinds and choppy customer demand.

Increased use of automation and in-house AI tools has also enabled ‍many companies to handle more planning and performance assessments internally, creating additional ‌uncertainty for external advisory providers such as Gartner.

The company expects its total revenue to be US$6.46 billion ($9.22 billion) for 2026, below analysts' average expectations of US$6.71 billion, according to data compiled by LSEG.

It forecast annual adjusted earnings of US$12.30 per share, below expectations of US$13.53.

Gartner also projected annual revenue of US$5.19 billion at the insights unit, its biggest, below estimates of US$5.3 billion.

"Investors will likely be interested in the ‌pace of 2026 CV (contract value) acceleration from here and ‌the softer Insights Revenue guide could suggest that the pace remains somewhat challenging," Joshua Chan, analyst at ‌UBS said.

Fourth-quarter revenue at its consulting segment, which provides advisory work that helps firms execute and implement strategy, fell about 13 percent ​to US$133.6 million from a year ago.

The company reported quarterly revenue of US$1.75 billion, in line with analyst estimates.

Adjusted earnings ⁠for the ​quarter ended December 31 were US$3.94 per share, beating estimates of US$3.51.