Gartner cuts annual revenue forecast on slower research demand

(Reuters) -Gartner cut its annual revenue forecast on Tuesday, anticipating slower demand for its biggest research unit as businesses dialed back on spending in an uncertain economy.

Shares of the company fell 11% in premarket trading.

Gartner now expects $100 million less from its insights unit in 2025, which led to the company to now forecast total revenue of at least $6.46 billion this year.

The company, however, expects annual profit of at least $11.75 per share, up 5 cents from its prior forecast, due to favorable foreign exchange rates.

Businesses have been streamlining costs to counter ongoing inflation and subdued customer spending, leading to softer demand for Gartner's services.

Analysts have said that advancement in automation and AI, which enables clients to improve performance with tools developed in-house, has created uncertainty for consulting services firms like Gartner.

However, the insights segment, which accounts for more than half of total sales, reported a 4.3% rise in revenue in the second quarter.

This boosted the company's total revenue to $1.69 billion for the quarter ended June 30, compared with analysts' average estimate of $1.67 billion, according to data compiled by LSEG.

Gartner's consulting segment recorded a nearly 9% rise in quarterly revenue to $155.6 million.

On an adjusted basis, the company earned $3.53 per share, beating estimates of $3.30.

(Reporting by Harshita Mary Varghese in Bengaluru; Editing by Shailesh Kuber)

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