Gartner forecasts downbeat annual results on slowing demand at consulting unit

Feb 3(Reuters) - IT ⁠research firm Gartner ⁠on ‍Tuesday 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% 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 $6.46 ‌billion for 2026, below analysts' average expectations of $6.71 billion, according to data compiled by LSEG.

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

Gartner also projected annual revenue of $5.19 billion at the insights ‌unit, its biggest, below estimates of $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% to $133.6 million from a year ago.

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

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

(Reporting by Arnav Mishra in Bengaluru; Editing by Shreya Biswas)

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