Aug 2, 2013
Executives
Brian Shipman - Group Vice President of Investor Relations Eugene A. Hall - Chief Executive Officer and Director Christopher J.
Lafond - Chief Financial Officer, Principal Accounting Officer and Executive Vice President
Analysts
Peter P. Appert - Piper Jaffray Companies, Research Division Jeffrey P.
Meuler - Robert W. Baird & Co.
Incorporated, Research Division Timothy McHugh - William Blair & Company L.L.C., Research Division Joseph D. Foresi - Janney Montgomery Scott LLC, Research Division William G.
Bird - Lazard Capital Markets LLC, Research Division Jerry R. Herman - Stifel, Nicolaus & Co., Inc., Research Division Jeffrey M.
Silber - BMO Capital Markets U.S. Manav Patnaik - Barclays Capital, Research Division
Operator
Good morning, ladies and gentlemen, and welcome to Gartner's earnings conference call for the second quarter 2013. A replay of this call will be available through September 2, 2013.
The replay can be accessed by dialing (888) 286-8010 for domestic calls and (617) 801-6888 for international calls and by entering the pass code, 46902564. This call is being simultaneously webcast and will be archived on Gartner's website at www.gartner.com for approximately 90 days.
I will now turn the conference over to Brian Shipman, Gartner's Group Vice President of Investor Relations for opening remarks and introductions. Please go ahead, sir.
Brian Shipman
Thank you, and good morning, everyone. Welcome to Gartner's Second Quarter 2013 Earnings Call.
With me today is our Chief Executive Officer, Gene Hall; and our Chief Financial Officer, Chris Lafond. This call will include a discussion of Q2 2013 financial results as disclosed in today's press release.
After our prepared remarks, you will have the opportunity to ask questions. I'd like to remind everyone that the press release is available on our website at gartner.com.
Before we begin, we need to remind you that certain forward statements made on this call may constitute forward-looking statements. Forward-looking statements can vary materially from actual results and are subject to a number of risks and uncertainties, including those contained in the company's 2012 annual report on Form 10-K and quarterly reports on Form 10-Q, as well as in other filings with the SEC.
I would encourage all of you to review the risk factors listed in these documents. The company undertakes no obligation to update any of its forward-looking statements.
With that, I would like to hand the call over to Gartner's Chief Executive Officer, Gene Hall. Gene?
Eugene A. Hall
Good morning, and welcome to our earnings call for the second quarter of 2013. We had another quarter of double-digit growth as a result of the continued effective execution of our proven strategy.
Research, our largest and most profitable segment, continues to deliver double-digit growth, with robust demand for our services across all regions, industries and client sizes. Our performance in the Americas, our largest geography, accelerated, with great results across the business.
Europe was also strong, with double-digit growth despite a challenging economic environment. We also saw double-digit growth across nearly every industry, including the public sector.
And finally, we saw double-digit growth across all client sizes, demonstrating the great demand for our offerings. Our Events segment continues to exceed expectations in both attendees and exhibitors at our events around the world.
And our Consulting segment had double-digit growth during the quarter, with strength across all regions we serve and in both Contract Optimization and core Consulting. We know how to be successful in any economic environment, and you're seeing that today in our results.
You've heard me say this before, these are remarkable times for technology. Technology is transforming the world.
It affects how we work and what we do, and it impacts every industry. And Gartner is at the heart of it.
Every institution in the world is a potential client, giving us a vast, untapped market opportunity for our services. Gartner is the best source of help for enterprise leaders launching critical initiatives within the technology revolution, and we are relevant whether an institution is growing or facing economic challenges.
I remain confident and excited about Gartner. The Gartner brand is in a class by itself.
Our products, services and people are superior to the competition, with a great business model, and relevant to virtually every company and every government agency in the world. In summary, I'd like to leave you with 3 takeaways for today's call.
First, we continue to see robust demand for our services. Our vast market opportunity and our consistent winning strategy allowed us to once again deliver double-digit contract value growth.
Second, clients value our services whether they're growing or facing difficult budget cuts. And third, we continue to be well positioned to achieve sustained double-digit growth in our key metrics, as we've done over the past several years.
And with that, I'd like to hand the call over to Chris.
Christopher J. Lafond
Thanks, Gene, and good morning, everyone. As Gene mentioned, we delivered a strong first half of 2013, reporting 13% growth in contract value and double-digit growth in each business segment for the second quarter.
Our results demonstrate the continued successful execution of our strategy and our ability to consistently deliver on the financial objectives we have communicated over the past several years. We continued to see strong trends in our key business metrics during the second quarter.
Year-over-year contract value growth remains strong, and retention rates ended near all-time highs. Our Events business increased by 15% year-over-year on an FX-neutral basis, and our Consulting business rebounded nicely, with 13% growth year-over-year on an FX-neutral basis.
Demand for our services remained strong across all 3 business segments. Even as companies face the uncertainties of the current macroeconomic environment, they turn to Gartner because we are a key partner for IT and supply chain professionals in running efficient and innovative programs to drive growth in their organizations.
We are engaged on the most important projects for the institutions we work with. This is why, with the successful execution of our strategy, we continue to deliver consistent revenue growth and strong financial performance and why we are so confident that 2013 will be another year of double-digit growth.
Let me now review each of our 3 business segments for the second quarter. I'll finish today with a discussion of our revised guidance, and then we'll take your questions.
Starting with Research. Second quarter Research revenue was up 12% to $311 million.
Currency fluctuations had no material impact on Research revenues as compared to the prior year in the second quarter. Contribution margin in this segment increased 49 basis points to 69% in the second quarter, as our strong execution continues to capitalize on the operating leverage in this business.
All of our key Research business metrics remained strong in the second quarter. Contract value grew to a record level of $1.293 billion, a growth rate of 13% year-over-year on an FX-neutral basis.
As has been the case for the past several years, our growth in contract value in Q2 was extremely broad-based, with every region and client size growing at double digits. As Gene mentioned, our largest region, the Americas, continues to perform very well and delivered a modest acceleration of contract value growth in Q2.
And the rest of the world remained strong with double-digit contract value growth. New business again increased year-over-year, continuing the trend we've seen since late 2009.
The new business mix was balanced between sales to new clients and sales of additional services and upgrades to existing clients. And while our contract value growth continues to benefit from our discipline of annual price increasing and no discounting, approximately 80% of our contract value growth came from volume, with the balance coming from price increases.
We've consistently increased our prices by 3% to 6% per year on an annual basis since 2005. We implemented a price increase during the fourth quarter of 2012, and we expect to do it again later this year.
Our volume growth reflects our success in continuing to grow the business by penetrating our vast market opportunity with both new and existing clients. As a result, we ended the quarter with 13,315 client organizations, up 7% over last year's second quarter.
Our client retention rate ended the quarter at 82%, and we've maintained client retention rates between 82% and 83% for 12 straight quarters. In addition to retaining our Research clients at an impressive rate, the clients we retained continue to increase their spend with Gartner, and wallet retention ended at 97% in the second quarter.
Wallet retention is higher than client retention due to a combination of increased spending by retained clients and the fact that we retained a higher percentage of our larger clients. As we have discussed in the past, our retention metrics are reported on a 4-quarter rolling basis in order to eliminate any seasonality.
In summary, we delivered another strong quarter in our Research segment. We grew our contract value by $145 million on an FX-neutral basis year-over-year.
We continue to see high levels of demand from clients, and we expect acceleration in contract value and revenue growth. We remain confident in our ability to deliver double-digit annual revenue growth in this business over the long term.
Turning now to Events. Our Events segment continued the trend of extremely strong year-over-year revenue growth we've delivered for the past 3 years.
In the second quarter, Events revenue increased 15% year-over-year on a reported basis. Currency fluctuations had no material impact on Events revenue.
During the second quarter, we held 25 events with 12,098 attendees compared to 21 events with 12,540 attendees in the second quarter of 2012. On the same-events basis, attendee revenue was up 12% and exhibitor revenue was up 15% year-over-year.
As we expected and discussed on our last earnings call, the gross contribution margin of 47% for Q2 rebounded from the seasonably-light first quarter of the year. Looking ahead, we see strong demand for both attendee and exhibitor participation at our upcoming events.
And for the full year, we expect this business to continue the trend of strong growth in revenue, contribution margin and margin expansion we have seen over the past few years. Moving now onto Consulting.
We told you last quarter that Consulting would improve as the year progressed, and our second quarter results reflect that. Revenues in Consulting grew 12% on a reported basis in the second quarter.
Excluding the impact of foreign exchange, revenues grew 13%. Billable headcount of 518 was up 8% from the second quarter of 2012.
Second quarter utilization was 68%, up slightly from the prior year. Revenue per billable headcount ended the quarter at $428,000 per billable headcount.
Most important for the remainder of the year, we are seeing good and steady demand for our Consulting services. Backlog, the leading indicator of future revenue growth for our Consulting business, ended the quarter at $94 million.
This represents 1% growth year-over-year and a healthy 4 months of backlog. Additionally, our pipeline is solid as we enter the second half of the year.
With the current backlog and visibility we have in the pipeline, the Consulting business is positioned to deliver results in line with our long-term objectives. Moving down the income statement.
SG&A increased by $20 million year-over-year during the second quarter, primarily driven by the growth in our sales force. As of June 30, we have 1,549 quota-bearing sales associates, an increase of 191 sales associates from a year ago.
We continue to tightly control G&A costs across the entire company. We believe this expense item will provide us with a source of operating leverage in the future as G&A will continue to decline as a percent of revenue.
Moving on to earnings. We delivered another solid quarter of earnings growth, with normalized EBITDA of $90 million in the second quarter, up 14% year-over-year, and GAAP diluted earnings per share was $0.49, up 14% year-over-year.
As expected, our Q2 2013 GAAP diluted earnings per share includes $0.01 of amortization and other costs associated with our acquisitions, including Ideas International. Our earnings results were also impacted by a higher-than-projected tax rate.
The effective tax rate of 35% in Q2 was driven by a modest shift in mix of our earnings to higher-tax jurisdictions. Turning to cash.
Operating cash flow increased by 41% to $140 million in the second quarter of the year. In Q2, we experienced early collections than the same quarter a year ago.
We continue to expect the same level of free cash flow for the full year, that we have indicated in our previously issued guidance. Over the long term, we continue to expect to generate free cash flow substantially greater than our net income, given our tight cash management and the negative working capital characteristics of our Research business.
During the second quarter, we utilized our cash to return capital to shareholders for our share repurchase program. We repurchased over 850,000 shares at a total cost of approximately $49 million.
We ended the quarter with a strong balance sheet and cash position, with net cash of $128 million. Our credit facility runs through March of 2018 and at this time, provides us with about $550 million of remaining borrowing capacity.
We have ample cash flow and liquidity to continue to grow our business and execute initiatives that drive increased shareholder value. And we continue to look for attractive acquisition opportunities as a potential use of cash.
We believe that repurchasing our shares remains a compelling use of our capital, and we have $143 million remaining under our board authorization. Now let me turn to our business outlook for the remainder of 2013.
With a strong start to the year, we're well positioned for double-digit full year revenue, earnings and cash flow growth that we expected as we began the year. However, currency fluctuations have moved enough in the first half of the year to require a slight change to our guidance at this point in the year.
The details of our guidance are included in the earnings release issued this morning. Let me take a minute to highlight some of the changes.
As with our guidance at the beginning of the year, we've made no attempt to anticipate future changes in foreign exchange rates. This revised guidance is based on where rates are today.
And as a result, we're reducing both the low end and high end of our previously issued total revenue guidance by $15 million, with the changes due to a strengthening of the U.S. dollar since issuing our guidance back in February.
We now expect total revenues of between $1.76 billion and $1.805 billion, a change of less than 1%. This change to revenue guidance in both Research and Consulting segments are solely related to FX.
In the Events segment, stronger expected performance was offset slightly by FX, resulting in the increase in guidance for that segment. From a seasonality perspective, I would remind you that the fourth quarter is the largest quarter of the year for the Events business and will make up more than 50% of the full year revenues in that segment.
With respect to earnings guidance, we modestly reduced the bottom and top end of our previous EBITDA guidance range by $5 million to account for currency fluctuations, again representing a change of 1%. We also lowered our EPS guidance, driven again by these FX changes, as well as a higher tax rate assumption.
We're revising our tax guidance upwards to approximately 32.5% from approximately 31% due to a shift in the projected mix of earnings to higher-tax jurisdictions for 2013, consistent with our comments about the Research growth rates geographically. There were no other changes to our previously issued guidance.
And so to summarize, we delivered strong results in the second quarter across all 3 business units. Demand for our services is strong, and as a result, we generated double-digit revenue growth and our key business metrics remained solid in the second quarter.
Our initiatives to improve operational effectiveness, coupled with the positive operating leverage inherent in our businesses, delivered double-digit earnings growth, and we generated substantial cash flow. As always, we're actively exploring strategic alternatives for deploying our cash.
We'll continue to invest in our business and return capital to shareholders through our share repurchase program, and we expect to repurchase shares throughout the remainder of 2013. Finally, with double-digit growth in contract value in the second quarter, we've built a solid foundation for delivering strong revenue and earnings growth in 2013.
We're well positioned for double-digit revenue and earnings growth and increasing returns to our shareholders over the long term. Now I'll turn the call back over to the operator, and we'll take your questions.
Operator?
Operator
[Operator Instructions] And your first question comes from the line of Peter Appert with Piper Jaffray.
Peter P. Appert - Piper Jaffray Companies, Research Division
So Gene, you cited better results in the U.S., and you sounded fairly upbeat in terms of strength in Research across the board. But the CV growth and the revenue growth did decelerate, at least a little bit on a quarter-to-quarter basis.
So what was driving that?
Eugene A. Hall
Peter, it's Gene. So as I said on the call earlier today, we're performing pretty well globally, with every region, every client size and almost every industry vertical growing at double-digit rates, including, by the way, the public sector.
And our Americas grew a little faster than average, and the rest of the world grew modestly lower than average. And what's going on under the covers is, there's a few pockets within Europe that posed some challenges for us.
And so Europe growth was a little slower than overall average, and it's in pockets of Europe. So again, much of Europe is very strong, but there are a few pockets that were a little -- not quite as strong.
Again, just to reinforce, despite that, we still had double-digit growth in Europe, so we'd characterize it to be pretty strong still.
Peter P. Appert - Piper Jaffray Companies, Research Division
Okay. And then, Chris, in his comments, I think that the quote was something like expect acceleration in CV and revenue growth.
Can -- Chris, can you be more specific on that?
Christopher J. Lafond
Peter, thanks. As we continue to see where we are, and with Gene's comments he just made, if you look at our performance -- and as you know, what we've been doing over time is continuing to implement initiatives across the company to improve our performance.
And I think what you're seeing in the U.S., with the slight acceleration, is that those things are taking hold so we feel really good about what we're seeing in the U.S. As Gene mentioned, we're still seeing really good performance even in challenging places like Europe and public sector.
So we think those things are having impact, and as things return to more normal levels, we'll see things accelerate. So whether that's later this year or into next year is the question, but we feel very good about what we're seeing as we look at the details of our performance.
Peter P. Appert - Piper Jaffray Companies, Research Division
Okay. And then just last thing for me the -- Gene, you've talked for a couple of quarters about focus on sales force productivity.
Can you give us an update in terms of how the initiatives are progressing? It looks like the productivity is still down a bit on a year-to-year basis.
Eugene A. Hall
Yes, Peter. So we have a number of initiatives to continue to grow our sales productivity.
In fact, let's -- I should start with our sales productivity, actually, we're very happy with it. We think it's quite good.
And we have -- but we do have a number of initiatives that we think, over time, will take that level to an even higher amount. And as Chris mentioned, we've implemented -- the way we generally roll these things out is we start in the Americas, and then we roll them out through the rest of the world over time.
And we've implemented some of the latest ones in the Americas. And as we mentioned there, we saw an uptick in performance there, which increases the productivity there.
As I mentioned, there are some other parts of the world, particularly in Europe, where we had some pockets that weren't quite as strong, and that's what's impacting the overall sales productivity.
Peter P. Appert - Piper Jaffray Companies, Research Division
Okay. Actually, I'm sorry, just one more thing.
On the tax rate, Chris, the -- any further color? It's all just basically mix?
And is there anything about the expiration of the R&D tax credit next year that we should be thinking about?
Christopher J. Lafond
No. I think, this quarter, it's all due to mix.
As I talked about, we had originally projected 31% for the year. We're now expecting about 32.5%.
And so what you saw on the quarter was a bit of a catch-up for the year, which is why it was a bit higher for the quarter. We don't expect it to be at that level for the remainder of the year.
We expect the whole year to end at about 32.5% and again, consistent with the comments we just made on where our performance is. It's driven -- seeing some more income in the U.S., which is higher-tax jurisdiction, so it's really all driven by that.
Peter P. Appert - Piper Jaffray Companies, Research Division
Okay. And what's your view on the R&D tax credit?
Christopher J. Lafond
If you look forward -- at this point, Peter, we're not expecting any dramatic change to our longer-term tax rates. We've said that, that rate should be in the 31%, 32% range.
We still are looking at that. Obviously, there's a lot of things changing in the world of tax right now, and so as we continue to monitor that, we'll be able to give you more color.
But as of this point, we don't see anything that should change that over the longer term.
Operator
Your next question comes from the line of Jeff Meuler with Baird.
Jeffrey P. Meuler - Robert W. Baird & Co. Incorporated, Research Division
I want to ask a follow up to the answer you gave to one of Peter's questions. But in terms of the reacceleration, I think you said whether it be later this year or next year -- I mean, it seems like you're not baking a reacceleration into your guidance.
But are you seeing any signs, whether it be in your business or whether it just be some of the European macro data points stabilizing, that suggests this reacceleration? Or is it just your confidence in your strategy and the things that you've been doing that lead you to believe that it will happen?
Eugene A. Hall
Jeff, it's Gene. So the -- as we've talked about it, we don't try to forecast any improvement or deterioration in the economic environment.
So when we talk about our thoughts on what's going on, it's assuming the economic environment doesn't get better and doesn't get worse. And so -- and then on top of that, frankly, we think we can do pretty well whether the economic environment is challenging or whether it's robust.
And so the improvements we're talking about are more operational changes. And in fact, frankly, as I talked about some pockets of weakness, it's operational, it's not due to the economics.
If you tried to correlate it with the GDP growth or unemployment or something like that, it's more correlated to where we have operational work to do as opposed to that it's the macro environment.
Jeffrey P. Meuler - Robert W. Baird & Co. Incorporated, Research Division
Okay. But are you seeing signs of improvement already that give you the confidence?
Or is it just that you have confidence in the model and know that where there are pockets of weakness, you can or are making operational changes and eventually, that will yield reacceleration?
Christopher J. Lafond
Jeff, it's Chris. So a couple of things that I would say.
As we talked about, in the Americas, we did see an acceleration. So we certainly have factual data points in the Americas that things did accelerate a bit, so we did see that.
And so from our perspective, we're seeing them. We look across our business in great detail and we can see places where things are improving.
And -- but at the end of the day, as Gene said, we do believe that our own execution will continue to allow us to improve and accelerate over time.
Jeffrey P. Meuler - Robert W. Baird & Co. Incorporated, Research Division
Okay. And then just maybe a comment on wallet retention.
You guys kind of framed retention as being kind of in this record range that it's been in, in the last 2.5, 3 years. But wallet retention did tick down year-over-year by 2 full points, which seems somewhat meaningful.
So can you just kind of break out what's going on there between up-sell and kind of retention of different size clients and then, I guess, why you have the confidence that this is just kind of normal variability in that range instead of a trend that's worth closer monitoring?
Christopher J. Lafond
So a couple of things on retention that I would mention. First, we've been very consistently retaining our clients.
So our client retention has been 82%, 83% now for 12 quarters, and so that is a very consistent trend, where we retain all of our clients and retain them at the same rate that we have been for quite some time. When you look at the wallet retention rate, it's very consistent with the comments I think we made during our talk here, in that we're seeing some continued good retention rates in Americas.
Some of the slowdown and a little bit of the deceleration you've seen in Europe that's driving the CV growth is driven by a little bit of the retention. So where you're seeing it is in those pockets that Gene talked about, as opposed to broad-based.
When we look at our retention rates globally and look at it in great detail, we feel very confident. We're seeing really good retention rates across the vast majority of the business, and it's just a few pockets of places that are causing that, consistent with the CV going from 14% to 13%.
Jeffrey P. Meuler - Robert W. Baird & Co. Incorporated, Research Division
Okay. And then just one last one for me.
Can you guys just hit on which currencies we should be thinking about having the greatest impact on the guidance adjustment? Is it the yen, the Canadian dollar, et cetera?
Christopher J. Lafond
Well, our biggest currencies other than the U.S. dollar are the euro and the pound.
Those are, by far, the 2 biggest. And so as those move, that's where you're going to see the biggest impact.
Certainly, if you work your way down, you have the Australian dollar, the Canadian dollar and the Japanese yen. Those are really the top 5 currencies that have an impact, but the 2 are the ones that really move the needle the most.
Jeffrey P. Meuler - Robert W. Baird & Co. Incorporated, Research Division
But I'm asking from the standpoint of weren't the euro and pound rates against the dollar more stable year-to-date than some of these other currencies? So I'm just wondering what drove the adjustment in terms of the moves given that it seems like the euro and pound exchange rates are more stable.
Christopher J. Lafond
Yes, and that's why we only moved them by 1%, right? So there was enough of a move that we felt it was material enough to update our guidance for the foreign exchange move, but it hasn't been significant, which is why we only moved it 1%.
Operator
Your next question comes from the line of Tim McHugh with William Blair.
Timothy McHugh - William Blair & Company L.L.C., Research Division
I was wondering if you can just elaborate, in the U.S., what you feel like you're having the most success with in terms of just kind of the operating strategies to drive the slight acceleration. I know you're always doing a couple of things, but if there's any specific strategies that are helping to drive productivity up a little.
Eugene A. Hall
Tim, it's Gene. So it's a continuation of the things we've been doing over time.
So it starts with things like productivity initiatives in the sales force, which are things like improving our training. It's also things like the tools that we give our salespeople.
We also have introduced -- every quarter, we introduce a set of product enhancements, and so there's been a continuous sort of product enhancements. And as I mentioned, we tend to roll those things out in the U.S.
first -- in the Americas first and then, through the rest of the world, the different regions. And so that's kind of where you see the first impact of these things.
That gives you a flavor for it. It's things like sales tools and training and product enhancements.
Timothy McHugh - William Blair & Company L.L.C., Research Division
Okay. And I guess, what's your thought process on sales force expansion as we go through the year?
You added a decent amount and the year-over-year growth rate picked up a little. Would you expect that to continue to pick up?
Or do the pockets of weakness in Europe, I guess, give you pause from accelerating that too much?
Eugene A. Hall
So as you know, our long-term objective is to grow sales rate at 15% to 20% a year. And earlier this year we said, this year, we're planning to grow at approximately 15%, and we're still planning to grow at approximately 15%.
Operator
Your next question comes from the line of Joseph Foresi with Janney Montgomery Scott.
Joseph D. Foresi - Janney Montgomery Scott LLC, Research Division
I wonder if we could go back to Consulting. I mean, you guys put up a -- what looks like a pretty decent quarter in that business.
Can you talk about the momentum there? And I know you gave a backlog number, but just maybe more of the feel of what we can expect from that business going forward.
Eugene A. Hall
It's Gene. So in the Consulting business, we had some deals slide between -- from Q1 to Q2, and so it gave us a stronger Q2 than kind of -- so if you look at the 2 -- you have to look at the 2 quarters kind of together, and I think that's indicative of what you'd expect to see on a go-forward basis.
So we're seeing good strength in Consulting across all of the geographies that we serve and in the 2 majors segments, core and CFC. So we're seeing good strength there.
But again, I do think we had some deals that slid between quarters. So if you look at the first half, I think that's a good way to think about the Consulting business.
Joseph D. Foresi - Janney Montgomery Scott LLC, Research Division
I guess kind of given the lumpiness that's taken place in that business over like, let's say, the last 12 to 18 months, do you feel like you've hit a more normalized run rate?
Christopher J. Lafond
Joe, it's Chris. I think there's a couple of things.
As we talk about all the time, the CFC business can be quite lumpy depending on when our clients choose to do some of these larger engagements. And so what we've said over time is that, that business tends to be a little less predictable quarter-over-quarter, and so you can see some shifts in the quarterly results as a result of that -- Contract Optimization.
Sorry, I used an internal acronym. It's Contract Optimization.
It's the business that tends to be a bit lumpy. I think what you saw in the quarter, as Gene mentioned, is a really nice balanced performance.
You saw the CF -- Contract Optimization business improve. You saw, as Gene said, our core and benchmark business was also delivering some nice results.
And so as Gene said, I think when you look at the half, you can see kind of we're right where we wanted to be as we started the year in terms of our overall expectations for the business. I can't sit here today and say that every quarter is going to be perfectly smooth because the business is, as you know, tends to be a little less even as our Research business, which is a subscription model, we recognize revenue evenly over the course of those contracts.
That's not the same model as Consulting. So we feel very good about the results, very good about where we are today.
As you know, we've done a lot of things in that business to get to the kind of results we're at, and we expect to continue to deliver against our longer-term expectations over time.
Joseph D. Foresi - Janney Montgomery Scott LLC, Research Division
Okay. In Europe, could you talk about any changes to your approach there?
In other words, around the sales front or -- and/or pricing or deal size, any changes in your approach given sort of the weakness that we've had in that particular region?
Eugene A. Hall
It's Gene. So the same approach is pretty much we use in Europe as we use elsewhere, with one exception, which is there's -- because of the economic environment, it's very challenging in Europe in many -- for many companies and many government institutions, there's offerings in our product line that are more focused on helping people save costs.
And so we emphasize the cost reduction part of our offering more there than we would in companies and institutions that have a lot of growth. It's not that we don't do it elsewhere, but it's just more of an emphasis.
Joseph D. Foresi - Janney Montgomery Scott LLC, Research Division
Got it, okay. And then the last one for me, you talked about maybe an acceleration kind of in the business, as we head towards the back half of the year.
Is that because we're returning to a normal state? Or do you feel like demand's improved in particular regions and that carries it?
I just want to get a feel for sort of that -- where that acceleration is coming from.
Christopher J. Lafond
Just let me make sure we're clear on the comment I made. So what I said when we were talking about the Research business is that, over time, we certainly expect acceleration.
And what we also said was we weren't necessarily saying it's going to come in the third quarter, fourth quarter et cetera. What we really are saying there is that given the performance we're seeing, seeing the acceleration in the U.S., feeling good about the programs and things we've put in place, feeling good as we look in detail across the business at much deeper levels, various regions and certain managers around the world, we're seeing great performance and great results.
And we certainly expect that, that will continue to make its way through the rest of the world, as things start to stabilize in Europe and some of the other pockets of weakness that we see. So we certainly expect it for all those reasons, and I wouldn't sit here and tell you today that we've forecasted you're going to see that acceleration in either Q3 or Q4.
Operator
Your next question comes from the line of William Bird with Lazard Capital.
William G. Bird - Lazard Capital Markets LLC, Research Division
I'm just wondering if you could give us your current philosophy on buybacks and potentially, getting leverage for buybacks? And separately, for Events, could you talk about just what you're seeing in advanced bookings for exhibitors and attendees?
Christopher J. Lafond
Great. Thanks, Bill.
In terms of buybacks, as those of you who followed us for a long time know, we've been pretty aggressive in terms of using our cash whether that's acquisition, where we find them and they make sense, which we will continue to do, and absent those, continue to be aggressive in share repurchase. And we spent about $100 million to date, and you should expect us to continue to be there.
So our strategy remains the same. We think it's a great use of cash.
We're going to continue to be aggressive in the marketplace, and we'll continue to be buying shares back for the remainder of this year and into the future. We still have $143 million on our share authorization program and so have plenty of capacity.
And we also, right now, are not very heavily levered on a debt-to-EBITDA basis. We certainly have no issues with taking our leverage higher for the right transactions, whether that is more aggressive share repurchase or the right acquisition.
We certainly have been much higher over time and have no concerns or issues with taking our leverage higher at all. So that's kind of the comments on your first question.
On the second question around Events, our advanced bookings and indications for our events in the back half of the year, particularly symposium, look really strong, as strong or stronger than we saw in previous years at this same period of time prior to the events. So we feel really good about what we're seeing right now in the pipeline and what's already been booked for those events.
William G. Bird - Lazard Capital Markets LLC, Research Division
And Chris, on leverage, is there a certain, I guess, limit that you have in mind that the company just philosophically wouldn't cross?
Christopher J. Lafond
We have no problem being in the 3x to 4x debt-to-EBITDA range for the right transactions because we could take it down very quickly with our cash-generating ability. Could you go higher than that if the transaction was right?
Sure. We'd absolutely look at that.
So we are very comfortable with our financial model, very comfortable with the cash we generate. And so taking that level up for a short period of time and bringing it back down pretty quickly for the right transaction is no source of a concern for us at all.
William G. Bird - Lazard Capital Markets LLC, Research Division
And just one final question. On Research, the lower guidance, is it due only to FX?
Christopher J. Lafond
In the 3 segments, Research and Consulting are solely due to foreign exchange, no other reason for the change. And on the Events business, we actually increased it because our performance has been so strong, and it was offset slightly by lower FX.
So really Events was the only one that was changed for performance reasons, and that was changed to the upside.
Operator
Your next question comes from the line of Jerry Herman with Stifel.
Jerry R. Herman - Stifel, Nicolaus & Co., Inc., Research Division
I do have a follow-up to the currency question. You've been helpful with regard to how it impacted the top line.
Could you give some color in terms of how it's impacting the bottom line for the year outlook?
Christopher J. Lafond
Sure. What we've said over time and continues to be the case is we're fairly naturally hedged.
So we have -- with revenues in -- around the world, particularly in those major currencies I mentioned earlier, we also have costs, analysts, salespeople in those regions. As we get bigger and bigger, the natural hedge is not 100%, and so as you see a little bit of movement on the top line, it does start to filter as we have larger EBITDA now over time.
And so that's why you're seeing the slight change to the EBITDA side. So while we saw the 1% reduction on the top line, it's about 1% on the EBITDA line or about $5 million.
And that's why it's relatively minimal to the earnings line.
Jerry R. Herman - Stifel, Nicolaus & Co., Inc., Research Division
Okay, great. And maybe some additional color on sales force.
And realizing that you have targets there, but can you talk, sort of below the raw numbers, what you're seeing with regard to recruiting, attrition and sort of the tenure? Is there a drift in tenure in either direction?
Eugene A. Hall
Its Gene. So in terms of our sales force, I'd say there's no important changes in any of the 3 things you mentioned.
So in terms of recruiting, we're seeing lots of interest to work for Gartner. The technology sector is a very exciting sector to be in and we have a great a brand name, so attracting salespeople to Gartner has always been a very -- we're an attractive place to work for salespeople, and that continues to be that way.
Our attrition is right in the range where it has been historically and where we expect it to be, so no change there either.
Jerry R. Herman - Stifel, Nicolaus & Co., Inc., Research Division
Okay. And a question about Events.
Maybe you can help us with the dynamics in the quarter and the outlook. The raw number of attendees was actually down, and the revenue was up a lot.
Help us with regard to either pricing or mix in that business, both for the quarter and on a go-forward basis.
Christopher J. Lafond
Great. So just a couple of things on price.
Actually, our average price is actually up nicely year-over-year. We do increase prices in Events, as we do with Research and every part of our portfolio in fact.
And so the average price -- and again, when you look at average prices, it's also depending on the event, so as the mix moves, certain events have higher price points than other price points. But overall, if you try to normalize that, the average price per attendees is actually up, which is great.
There are -- when you look at the attendee mix, there are some mix of attendees that pay different price points, and the mix has been -- has shifted to where we want it to be in terms of the attendees. And so we're very comfortable with what we're seeing on the attendee side at all of the events that we've had in the first half and continue to see really nice demand at this point for the events we're holding in the second half.
So that's kind of where we are on the Events business.
Jerry R. Herman - Stifel, Nicolaus & Co., Inc., Research Division
Great. And final question for me, just with regard to cash redeployment.
You referenced potential for deals, can you talk about pipeline or activity targets there relative to the past?
Eugene A. Hall
It's Gene. So obviously, we're not going to comment on any specific companies.
We do track a number of companies. Today, we're probably tracking in the order of 100 companies.
That's been true every quarter for the last 5 or 6 years, and so we have a number of companies we think are interesting that we track. And where it's appropriate, we maintain relationships with those companies.
And if the right strategic situation comes up, the right price, as has happened several times in the past, we'll do an acquisition.
Operator
Your next question comes from the line of Jeff Silber with BMO Capital Markets.
Jeffrey M. Silber - BMO Capital Markets U.S.
Over the past quarter or so, we've been hearing a lot of cautious comments from a lot of technology companies, and even your own company lowered your forecast for IT spending in the back half of the year. I'm just curious how you can reconcile that with the bullish comments that you're saying in your business.
Eugene A. Hall
Yes. So our business is not -- it's Gene.
Our business is not driven by technology spending. It's driven by companies having initiatives in their business, and so the -- it's not really driven by technology spending at all.
And so we're not sort of correlated with that. And another way to think about it is there's like $3 trillion of technology spending, and if that goes up or down a little bit, it just doesn't affect -- people are still buying trillions of dollars worth of equipment and services.
And so whether that's $2.9 trillion or $3.1 trillion, they're still buying a lot of stuff, which is why whether it goes up 5% or 10% doesn't matter to us. It does to some of the technology providers, it's much more important.
Jeffrey M. Silber - BMO Capital Markets U.S.
Okay, that's helpful. On a couple of the retention metrics in the Research segment, can you remind us -- is there any seasonality in those metrics?
Christopher J. Lafond
We always report our metrics on a 4-quarter rolling basis to avoid that. So there are -- there tend to be a little bit of a seasonality at certain points in time, and so the reason that we don't report an individual quarter's retention is to normalize for that seasonality.
Jeffrey M. Silber - BMO Capital Markets U.S.
Okay, that's helpful. I appreciate that.
And then also, Gene in your comment, you talked, to some extent, about Europe. Mostly it was good, but there were some countries that are a little bit weaker.
I'm just curious if you could tell us, generally, which countries those were and what's going on there and how the focus to improve that is going.
Eugene A. Hall
Yes, so we're not going to break that out, but it wasn't even necessarily the country level, meaning we saw pockets that didn't -- you shouldn't interpret that as even a whole country necessarily. So again, we had -- if you look at our individual sales teams, we had teams -- in general, the teams did very well.
And we had a few pockets where, again, we have operational improvements to make.
Jeffrey M. Silber - BMO Capital Markets U.S.
So it's, again, more internal issues as opposed to external?
Eugene A. Hall
Yes. Again, I would say that it is definitely internal.
Because again, if you looked at our performance versus GDP growth in those countries, we didn't have the best performance in the countries with the best GDP growth or the worst in the countries with the worst GDP growth. Again, it depends on the operational performance of the individual teams.
Operator
Your next question comes from the line of Manav Patnaik with Barclays.
Manav Patnaik - Barclays Capital, Research Division
First question on the Events side, I mean, clearly, you guys continue to do well there year-over-year, and you continue to increase the number of events. Long-term -- I guess, 2 parts.
First, in the medium term, are there any particular themes or certain specific niche events that are driving sort of the growth there? And then longer term, I guess, is it just a game time decision year-over-year or is there a focus or a long-term plan to increase those 4, 5 events every year?
Eugene A. Hall
So it's Gene. So there's no kind of niche events that are driving our Events business.
It's very broad. If you look at it, we're getting great growth across all our geographies and across the vast majority of our events.
Again, I would characterize it as being very strong and very broad-based in terms of the performance. It's not driven by any kind of niche thing or anything like that.
And then, long term, again, we intend to keep the same strategy at Events, which is we think there's plenty of opportunity to grow our existing portfolio of events, and we'll continue to do that. And then we intend to keep launching new events over time as well.
Again, very consistent with what we've done in the past.
Manav Patnaik - Barclays Capital, Research Division
Okay. And then just to follow-up on the M&A pipeline.
You talked about 100 interesting companies. Maybe you could just help us understand -- like, clearly, there's a lot and you said they were all interesting.
So what's the sort of hold-back? Is it you guys being very price conscious?
Is it them asking for way too much? Or what's the dynamics there in terms of why one of these 100, over the last couple of years, haven't sort of been more than just an interest?
Eugene A. Hall
Yes, it's -- I'd say it's 2 things. Pricing is certainly a factor because we want to make sure we pay the right price for any kind of acquisition we make.
The second thing is -- has to do with the owners and the management team. If it's a private company, if the owners don't want to sell, then obviously we can't buy it.
And similarly, if it's -- even if it's a public company, we have to make sure that the management team is going to be helpful in an acquisition. And that's part of why we often maintain relationships in advance, so that people kind of understand how great being a part of Gartner could be.
Manav Patnaik - Barclays Capital, Research Division
Okay. And just one last one.
Share count assumed in the guidance, just some housekeeping here.
Christopher J. Lafond
From a share count -- no change to the original guidance, roughly $95-ish million for the year -- sorry, 95 million shares for the year, sorry about that, not dollars.
Operator
We have no further questions at this time. I will now turn the call back over to Brian Shipman for any closing remarks.
Brian Shipman
Thank you, Erica, and thank you, everyone, for joining us today. We look forward to updating you again next quarter.
Operator
Thank you for your participation in today's conference. This concludes the presentation.
Everyone, may now disconnect, and have a great day.