What changed in this filing

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Item 1A. Risk Factors

2024-02-15 compared with 2023-02-16 · 90 added, 101 removed, 196 unchanged (49% of the section changed)

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Additional risks not currently known to us or that we now deem immaterial may also harm us and negatively affect your investment.

In addition to the effects of the global economic and geopolitical climate on our business and operations discussed in Item 7 of this Form 10-K and in the risk factors below, additional or unforeseen effects from the global economic and geopolitical climate may give rise to or amplify many of these risks discussed below.

rise to or amplify many of these risks discussed below.

Risks in this section are grouped in the following categories:

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(2) macroeconomic and industry risks;

(3) legal and regulatory risks;

and (4) risks related to our Common Stock.

and (3) legal and regulatory risks.

Many risks affect more than one category, and the risks are not in order of significance or probability of occurrence because they have been grouped by categories.

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We operate in a rapidly evolving market, and our success depends on our ability to deliver high quality and timely research and analysis to our clients.

Any failure to continue to provide credible and reliable information and advice that is useful to our clients could have a material adverse effect on future business and operating results.

Any failure to continue to provide credible and reliable information and insight that is useful to our clients could have a material adverse effect on future business and operating results.

Further, if our published data, opinions or viewpoints are considered to be wrong, lack independence, or are not substantiated by appropriate research, our reputation will suffer and demand for our products and services may decline.

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The development of new products is a complex and time-consuming process.

Nonetheless, to maintain our competitive position, we must continue to anticipate the needs of our clients, develop, enhance and improve our existing products, as well as new products and services to address those needs, deliver all products and services in a timely, user-friendly and state of the art manner, and appropriately position and price new products and services relative to the marketplace and our costs of developing them.

Nonetheless, to maintain our competitive position, we must continue to anticipate the needs of our clients, develop, enhance, protect, and improve our existing products, as well as new products and services to address those needs, deliver all products and services in a timely, user-friendly and state of the art manner, and appropriately position and price new products and services relative to the marketplace and our costs of developing them.

Any failure to achieve successful client acceptance of new products and services could have a material adverse effect on our business, results of operations and financial position.

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Technology is rapidly evolving, and if we do not continue to develop new product and service offerings in response to these changes, our business could suffer.

Disruptive technologies, including in areas of artificial intelligence and machine learning, are rapidly changing the environment in which we, our clients, and our competitors operate and could affect the nature of how we generate revenue.

Disruptive technologies, including in areas of artificial intelligence (“AI”) and machine learning, are rapidly changing the environment in which we, our clients, and our competitors operate and could affect the nature of how we generate revenue.

We will need to continue to respond to and anticipate these changes by enhancing our product and service offerings to maintain our competitive position.

However, we may not be successful in responding to these forces and enhancing our product and service offerings on a timely basis, and any enhancements we develop may not adequately address the changing needs of our clients.

However, we may not be successful in responding to these forces and enhancing our product and service offerings on a timely basis or in a cost-efficient manner, and any enhancements we develop may not adequately address the changing needs of our clients.

Our future success will depend upon our ability to develop and introduce in a timely manner new or enhance existing offerings that address the changing needs of this constantly evolving marketplace.

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When a major search engine changes its algorithms in a manner that negatively affects our placement in search results or makes it less likely for our target audience to enter our websites, our business, results of operations and financial position may be harmed.

Similarly, some of our content is exposed to the datasets leveraged by AI chatbots, and these chatbots may provide substantive content, either with or without contribution, in query responses to users which could reduce the need to enter our websites.

Uncertainty in the development, deployment, and use of AI in our platform and products and by our customers and competitors may result in harm to our business and reputation.

We use, and may expand our use of, machine learning and AI technologies in some of our products, services, and processes.

Developing, testing, and deploying AI systems will require additional investment and increase our costs.

If we fail to keep pace with rapidly evolving AI technological developments, our competitive position and business results may be negatively impacted.

Moreover, the development, adoption, and use of generative AI technologies are still in their early stages, and ineffective or inadequate AI development or deployment practices by Gartner or third-party developers or vendors could result in unintended consequences.

For example, AI algorithms that we use may be flawed or may be based on datasets that are biased or insufficient.

Third parties may also be able to use AI to create technology that could reduce demand for our products.

Although prohibited, clients or others may load our proprietary information into large language models, which could reduce the value of our offerings.

In addition, the introduction of AI technologies, particularly generative AI, into new or existing offerings may result in new or expanded risks and liabilities, due to enhanced

governmental or regulatory scrutiny, litigation, compliance issues, ethical concerns, confidentiality, data privacy or security risks, as well as other factors that could adversely affect our business, reputation, and financial results.

Our Research business depends on renewals of subscription-based services and sales of new subscription-based services for a significant portion of our revenue, and our failure to renew at historical rates or generate new sales of such services will lead to a decrease in our revenues.

A large portion of our success depends on our ability to generate renewals of our subscription-based research products and services and new sales of such products and services, both to new clients and existing clients.

These products and services constituted approximately 76% and 79% of total revenues from our on-going operations for 2022 and 2021, respectively.

These products and services constituted approximately 76% of total revenues from our operations for both 2023 and 2022.

Generating new sales of our subscription-based products and services, both to new and existing clients, is a challenging, costly, and often time-consuming process.

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Our ability to maintain contract renewals is subject to numerous factors, including the following:

• delivering high-quality and timely analysis and advice to our clients;

• delivering high-quality and timely analysis and insight to our clients;

• understanding and anticipating market trends and the changing needs of our clients;

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Additionally, as we continue to adjust our products and service offerings to meet our clients’ continuing needs, we may shift the type and pricing of our products which may impact client renewal rates.

While our Research client retention rate was 86% for both 2022 and 2021, there can be no guarantee that we will continue to maintain this rate of client renewals.

While our Research client retention rate was 84% and 86.3% for 2023 and 2022, respectively, there can be no guarantee that we will continue to maintain this rate of client renewals.

The profitability and success of our conferences and other meetings are subject to external factors beyond our control.

Our Conferences business constituted approximately 7% and 5% of total revenues from our on-going operations in 2022 and 2021, respectively.

As a result of the COVID-19 pandemic, we cancelled in-person conferences scheduled for 2020 beginning in late February/early March 2020.

We began holding virtual conferences during the second half of 2020.

These virtual conferences resulted in significantly less revenue and gross contribution, but we believe aided in client retention and engagement.

We had planned in-person conferences for 2021, but cancelled those conferences due to the ongoing pandemic.

We re-launched in-person destination conferences during the second quarter of 2022 and expect to focus on in-person destination conferences in future periods as conditions permit.

Although we have returned to offering some in-person conferences, our Conferences revenues may continue to be negatively impacted if in-person conferences are not permitted to be held in the jurisdictions of the conference venues, if client policies prohibit or restrict business travel or if there are public health concerns for attendees, exhibitors or our employees.

The market for desirable dates and locations for our activities has historically been highly competitive.

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We also face risks related to insurance coverage for our cancelled 2020 and 2021 conferences.

Our event cancellation insurance, including a two-year policy covering destination conferences during 2020 and 2021 and a policy covering Evanta conferences during 2020, provided up to $170 million in coverage for 2020 cancellations with the right to reinstate the policy limits one time if those limits are utilized.

The insurer has contested our right to reinstate the limits and to use reinstated limits to cover losses resulting from conferences cancelled due to COVID-19.

Gartner's two-year event cancellation policy also covered events that were planned for 2021 but cancelled, with limits of $150 million with the right to reinstate up to that amount one time if the initial limits are inadequate.

The insurer has contested all coverage for events cancelled in 2021 due to COVID-19.

We are in litigation with the insurer on these issues.

In 2021, we received $166.9 million of insurance proceeds related to 2020 event cancellation claims and recorded a gain of $152.3 million .

We received an additional $3.1 million related to 2020 event cancellation insurance claims in February 2023.

In its lawsuit against the insurer, Gartner is seeking to reinstate and recover up to an additional $20 million for cancelled 2020 Evanta meetings and to reinstate and recover up to an additional $150 million in losses from cancelled 2020 destination conferences.

Gartner is also seeking $150 million in initial limits for events cancelled in 2021 and to reinstate those limits up to an additional $150 million.

In 2022, Gartner also commenced litigation against the insurance broker who negotiated and procured our event cancellation insurance.

It is difficult to predict how long it will take to resolve these lawsuits and the resolution could affect our financial results.

Our event cancellation insurance included a two-year policy covering destination conferences during 2020 and 2021 and a policy covering Evanta conferences during 2020.

This insurance included coverage for cancellations due to communicable diseases and enabled us to receive an amount up to the lost contribution margin per conference plus incurred expenses, as more specifically set forth in the policies’ provisions for calculating the amount of recoverable loss, and subject to the policies’ limits of liability.

These policies provided up to $170 million in coverage for 2020 cancellations with the right to reinstate the policy limits for the payment of additional premium if those limits are utilized, for a maximum recovery of $340 million.

The insurer has accepted and paid claims on the initial $170 million of 2020 coverage.

However, the insurer has contested our right to reinstate the limits and use the reinstated limits to cover additional losses resulting from 2020 conferences cancelled due to COVID-19.

The insurer has contested all coverage for events that were planned for 2021 but were cancelled due to COVID-19, as well as Gartner’s right to reinstate the policy limits.

Our insurance coverage for 2023 (and likely beyond) excludes coverage for cancellations due to communicable diseases.

We are the plaintiff in litigation with the insurer and are seeking to reinstate the policy limits pursuant to the policies’ reinstatements of limits clause and recover up to an additional $170 million for events cancelled in 2020.

Gartner is also seeking $150 million in initial limits for events cancelled in 2021 and to reinstate those limits up to an additional $150 million.

We are also the plaintiff in litigation with the insurance broker that negotiated and procured our event cancellation insurance.

Although document discovery in our cases against the insurer and insurance broker is continuing, we cannot predict how long it will take to resolve these lawsuits, whether we will be successful or the impact the resolution could have on our financial results.

Our Consulting business depends on non-recurring engagements and our failure to secure new engagements could lead to a decrease in our revenues.

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Consulting engagements typically are project-based and non-recurring.

In addition, revenue from our contract optimization business can fluctuate significantly from period to period and is not predictable.

In addition, revenue

from our contract optimization business can fluctuate significantly from period to period and is not predictable.

Our ability to replace consulting engagements is subject to numerous factors, including the following:

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The market for highly skilled workers and leaders in our industry is extremely competitive.

We face competition for qualified professionals from, among others, technology companies, market research firms, consulting firms, financial services companies and electronic and print media companies, some of which have a greater ability to attract and compensate these professionals.

We face competition for qualified professionals from, among others, technology companies, market research firms, consulting firms, financial services companies and electronic and print media companies, some of which have significant financial resources and a willingness to deploy those resources to attract and compensate these professionals.

Moreover, increasing wage inflation may affect our profit margin as we strive to provide compensation packages that are competitive.

We face risks related to global labor shortages, and competitive markets have increased attrition throughout our sector.

We face risks related to global and industry-specific labor shortages, and competitive markets can increase attrition throughout our sector.

Additionally, some of the personnel that we attempt to hire are subject to non-compete agreements that could impede our short-term recruitment efforts.

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We may also be limited in our ability to recruit internationally by restrictive domestic immigration laws, and changes to policies that restrain the flow of technical and professional talent could inhibit our ability to adequately staff our research and development and other efforts.

An inability to retain key personnel or to hire and train additional qualified personnel could materially adversely affect the quality of our products and services, as well as our future business and operating results or stock price.

In addition, effective succession planning is important to our long-term success, and failure to ensure effective transfer of knowledge and smooth transitions involving key employees could hinder our strategic planning and execution.

Additionally, as a result of the COVID-19 pandemic, the vast majority of our employees transitioned to working from home.

In early 2022, we began to operate under a hybrid virtual-first working environment, meaning that most of our employees have the option to work remotely at least some of the time for the foreseeable future.

The hybrid working environment may impair our ability to maintain our culture of collaboration and continuous improvement, and may cause disruptions among our employees, including lost productivity, communication challenges and, potentially, employee dissatisfaction and attrition.

If we are unable to enforce and protect our intellectual property rights, our competitive position may be harmed.

We rely on a combination of copyright, trademark, trade secret, patent, confidentiality, non-compete and other contractual provisions to protect our intellectual property rights.

Despite our efforts to protect our intellectual property rights, unauthorized third parties may obtain and use technology or other information that we regard as proprietary.

Despite our efforts to protect our intellectual property rights, third parties may obtain unauthorized access to our intellectual property, technology or other information that we regard as proprietary.

Our intellectual property rights may not survive a legal challenge to their validity or provide significant protection for us.

The laws and enforcement mechanisms of certain countries, particularly in emerging markets, do not protect our proprietary rights to the same extent as the laws of the United States.

Conducting business in certain foreign jurisdictions may require accepting compromised protections or yielding of rights to technology, data or intellectual property rights in order to access those markets.

Additionally, the laws and enforcement mechanisms to protect our intellectual property from unauthorized use in new technologies like AI and machine learning are evolving and may be inadequate.

Further, the laws and enforcement mechanisms of certain countries, particularly in emerging markets, do not protect our proprietary rights to the same extent as the laws of the United States.

Conducting business in certain foreign jurisdictions may require accepting compromised protections or yielding of rights to technology, data or intellectual property in order to access those markets.

Accordingly, we may not be able to protect our intellectual property against unauthorized or undesired third-party copying or use, which could adversely affect our competitive position.

Additionally, there can be no assurance that another party will not assert that we have infringed its intellectual property rights.

Our employees are subject to restrictive covenant agreements (which include provisions related to employees’ ability to compete and solicit customers and employees) and assignment of invention agreements, to the extent permitted under applicable law.

From time to time third parties have asserted, and may continue to assert, intellectual property claims that our products infringe the rights of others.

Such claims can be expensive and time-consuming to defend, regardless of their merit.

The inability to obtain rights to use third-party intellectual property on commercially reasonable terms could also have an adverse impact on our business.

We may face claims based on the theft or unauthorized use or disclosure of third-party trade secrets and other confidential business information.

Any such incidents and claims could harm our business and reputation, cause us to incur significant expenses, and prevent us from selling certain products, all of which could negatively impact our business and results of operations.

Additionally, our employees are subject to restrictive covenant agreements (which include provisions related to employees’ ability to compete and solicit customers and employees) and assignment of invention agreements, to the extent permitted under applicable law.

When the period expires relating to their particular restrictions, former employees may compete against us.

If a former employee violates the provisions of the restrictive covenant agreement, we seek to enforce the restrictions but there is no assurance that we will be successful in our efforts.

Privacy concerns could damage our reputation and deter current and potential clients from using our products and services or attending our conferences.

If a former employee violates the provisions of the restrictive covenant agreement, we seek to enforce the restrictions but there is no assurance that we will be successful in our efforts, and enforceability of certain restrictive covenants may decrease significantly

due to recent regulatory scrutiny in the U.S.

If the laws change to provide greater rights to employees, that could further reduce the effectiveness and enforceability of our restrictive covenant agreements.

Privacy concerns could damage our reputation and deter current and potential clients from using our products and services.

Concerns relating to global data privacy have the potential to damage our reputation and deter current and prospective clients from using our products and services or attending our conferences.

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While we believe our overall data privacy procedures are adequate, the theft or loss of such data, or concerns about our practices, even if unfounded, with regard to the collection, use, disclosure, or security of this personal information or other data protection related matters could damage our reputation and materially adversely affect our operating results.

Any systems failure or compromise of our security that results in the disclosure of our users’ personal data could seriously limit the consumption of our products and services and the attendance at our conferences, as well as harm our reputation and brand and, therefore, our business.

Any system or process failure, or compromise of our security that results in the disclosure of our users’ personal data, could seriously limit the consumption of our products and services and the attendance at our conferences, as well as harm our reputation and brand and, therefore, our business.

We are exposed to risks related to cybersecurity.

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To date, none have resulted in any material adverse impact to our business, operations, products, services or customers.

We have implemented various security controls to both meet our security obligations, while also defending against constantly evolving security threats.

We have implemented various security controls to meet our security obligations, while also defending against constantly evolving security threats.

Our security controls help to secure our information systems, including our computer systems, intranet, proprietary websites, email and other telecommunications and data networks, and we scrutinize the security of outsourced website and service providers prior to retaining their services.

However, the security measures implemented by us or by our outside service providers may not be effective and our systems (and those of our outside service providers) are vulnerable to theft, loss, damage and interruption from a number of potential sources and events, including unauthorized access or security breaches, cyber attacks, computer viruses, power loss, or other disruptive events.

As a result of transitioning to a virtual-first hybrid, remote-work environment, most of our employees are working remotely, which magnifies the importance of the integrity of our remote access security measures.

Additionally, the security compliance landscape continues to evolve, requiring us to stay apprised of changes in cybersecurity laws, regulations, and security requirements required by our clients, such as the European Union General Data Protection Regulation (GDPR), the California Consumer Privacy Act (CCPA) and California Privacy Rights Act (CPRA), the Brazilian General Data Protection Law (LGPD), the Chinese Cybersecurity, Data Security and Personal Information Protection laws (and other new and proposed data protection laws), International Organization for Standardization (ISO), and National Institute of Standards and Technology (NIST).

As a result of operating in a hybrid work environment, most of our employees are working virtually for a period of time, which magnifies the importance of the integrity of our remote access security measures.

Cyber criminals use artificial intelligence tools to increase the effectiveness, speed and complexity of attacks, requiring increased vigilance and threat defense.

Additionally, the security compliance landscape continues to evolve, requiring us to stay apprised of changes in cybersecurity and data privacy laws, regulations, and security requirements required by our clients, such as the European Union General Data Protection Regulation (GDPR), the California Consumer Privacy Act (CCPA) and California Privacy Rights Act (CPRA), the Brazilian General Data Protection Law (LGPD), the Chinese Cybersecurity, Data Security and Personal Information Protection laws (and other new and proposed data protection laws), International Organization for Standardization (ISO), and National Institute of Standards and Technology (NIST).

Recent well-publicized security breaches at other companies have led to enhanced government and regulatory scrutiny of the measures taken by companies to protect against cyber attacks, and may in the future result in heightened cybersecurity requirements, including additional regulatory expectations for oversight of vendors and service providers.

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However, any inefficiencies or operational failures could diminish the quality of our products, services, and user experience, resulting in damage to our reputation and loss of current and potential users, subscribers, and advertisers, potentially harming our financial condition and operating results.

We have grown, and may continue to grow, through acquisitions and strategic investments, which could involve substantial risks.

Our acquisitions, dispositions, and strategic investments, involve substantial risks.

We have made and may continue to make acquisitions of, or significant investments in, businesses that offer complementary products and services or otherwise support our growth objectives.

the time to train the sales force to market and sell the products of the acquired business, the potential disruption of our ongoing business and the distraction of management from our day to day business.

The realization of any of these risks could adversely affect our business.

The risks involved in each acquisition or investment include the possibility of paying more than the value we derive from the acquisition, dilution of the interests of our current stockholders should we issue stock in the acquisition, decreased working capital, increased indebtedness, the assumption of undisclosed liabilities and unknown and unforeseen risks, the ability to retain key personnel of the acquired company, the inability to complete the transaction due to regulatory review, the inability to integrate the business of the acquired company, increase revenue or fully realize anticipated synergies, the time to train the sales force to market and sell the products of the acquired business, the potential disruption of our ongoing business and the distraction of management from our day to day business.

Additionally, we face competition in identifying acquisition targets and consummating acquisitions.

Our dispositions involve additional risks and uncertainties, such as ability to sell such businesses on satisfactory price and terms and in a timely manner, or at all, disruption to other parts of the businesses and distraction of management, allocation of internal resources that would otherwise be devoted to completing strategic acquisitions, loss of key employees or customers, and exposure to unanticipated liabilities or ongoing obligations to support the businesses following such dispositions, and other adverse financial impacts.

The realization of any of these risks could adversely affect our business.

We face risks related to leased office space.

We assumed a significant amount of leased office space, in particular in Arlington, Virginia, in connection with the acquisition of CEB Inc.

In Arlington, we have consolidated all our businesses into a single building and have sublet substantially all of the excess space in our other properties.

We lease all the properties used for our ongoing business operations.

In several locations, we have consolidated our operations and sublet substantially all the excess space.

Through our real estate consolidations and other related activities, we seek to secure quality subtenants with appropriate sublease terms.

However, if we fail to secure quality subtenants, or subtenants default on their sublease obligations with us or otherwise terminate their subleases with us, we may experience a loss of planned sublease rental income, which could result in a material charge against our operating results.

Additionally, the long-term impact of responses to COVID-19 on leased office space availability and rental costs of leased office space is not yet known.

To accommodate our growth going forward, we have moved to a global hoteling model to better manage our footprint and operating expenses, and will secure new space when the opportunities and need arise.

If the new spaces are not completed on schedule, or if the landlord defaults on its commitments and obligations pursuant to the new leases, we may incur additional expenses.

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We derive significant revenues from research and consulting contracts with the United States government and its respective agencies, numerous state and local governments and their respective agencies, and foreign governments and their agencies.

At December 31, 2022 and 2021, approximately $932 million and $790 million, respectively, of our outstanding revenue contracts were attributable to government entities.

At December 31, 2023 and 2022, approximately $1.0 billion and $932 million, respectively, of our outstanding revenue contracts were attributable to government entities.

government contracts are subject to the approval of appropriations by the U.S.

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No assurance can be given that we would be successful in doing so, or that any accommodations that we were able to negotiate would be on terms as favorable as those currently in place.

The outstanding debt may limit the

amount of cash or additional credit available to us, which could restrain our ability to expand or enhance products and services, respond to competitive pressures or pursue future business opportunities requiring substantial investments of additional capital.

In addition, variable-rate borrowings under our 2020 Credit Agreement typically use LIBOR as a benchmark based on market participant judgments for establishing the rate of interest.

We expect LIBOR to disappear entirely after June 2023 for rates applicable to the 2020 Credit Agreement and our existing derivatives contracts.

The Alternative Reference Rates Committee (ARRC), which was convened by the Federal Reserve Board and the New York Fed, has identified the Secured Overnight Financing Rate (SOFR) as the recommended risk-free alternative rate for USD LIBOR.

The future consequences of a transition away from LIBOR on our variable-rate borrowings, including the possible transition to rates based on observable transactions, such as SOFR, cannot be predicted at this time, but could include an increase in the cost of our variable-rate indebtedness and volatility in our earnings.

The outstanding debt may limit the amount of cash or additional credit available to us, which could restrain our ability to expand or enhance products and services, respond to competitive pressures or pursue future business opportunities requiring substantial investments of additional capital.

We may require additional cash resources which may not be available on favorable terms or at all.

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The occurrence of, or concerns related to, a major weather event, earthquake, hurricane, flood, drought, volcanic activity, disease or pandemic, or other natural disaster could significantly disrupt our operations.

In addition, acts of civil unrest, failure of critical infrastructure, terrorism, armed conflict, war (including the war in Ukraine), and abrupt political change, as well as responses by various governments and the international community to such acts, can have a negative effect on our business.

In addition, acts of civil unrest, failure of critical infrastructure, terrorism, armed conflict (including in the Middle East), war (including the war in Ukraine), and abrupt political change, as well as responses by various governments and the international community to such acts, can have a negative effect on our business.

Such events could cause delays in initiating or completing sales, impede delivery of our products and services to our clients, disrupt or shut down the internet or other critical client-facing and business processes, impede the travel of our personnel and clients, dislocate our critical internal functions and personnel, and in general harm our ability to conduct normal business operations, any of which can negatively impact our financial condition and operating results.

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If any of these arrangements are terminated by our agent or us, we may not be able to replace the arrangement on beneficial terms or on a timely basis, or clients of the local distributor or sales agent may not want to continue to do business with us or our new agent.

Additionally, tariffs, trade barriers and restrictions, and other acts by governments to protect domestic markets or to retaliate against the trade tariffs and restrictions of other nations could negatively affect our business operations.

In addition, the withdrawal of nations from existing common markets or trading blocs, such as the exit of the United Kingdom (UK) from the European Union (the EU), commonly referred to as Brexit, could be disruptive and negatively impact the business of our clients.

We continue to monitor Brexit and its potential impacts on our results of operations and financial condition.

Depending on the application of the terms of the trade and cooperation agreement, there could be near or long-term negative impacts on our clients who have significant operations in the UK.

This may cause clients in the UK to forgo new purchases, and decrease renewals of subscription-based services and to request to cancel or renegotiate current subscription-based services.

The impact of any of these effects of Brexit, among others, could materially harm our business and financial results.

Additionally, tariffs, trade barriers

and restrictions, and other acts by governments to protect domestic markets or to retaliate against the trade tariffs and restrictions of other nations could negatively affect our business operations.

Our operating results could be negatively impacted by global economic conditions.

Our business is impacted by general economic conditions and trends in the United States and abroad, including without limitation inflation, slowing growth, rising interest rates and recession.

In its recent report, Global Economics Prospects, January 2023, the World Bank reported that

global growth is projected to decelerate sharply in 2023, to its third weakest pace in nearly three decades, overshadowed only by the 2009 and 2020 global recessions.

According to the World Bank, this reflects policy tightening aimed at containing very high inflation, worsening financial conditions, and continued disruptions from Russia’s invasion of Ukraine.

The report also notes that further negative shocks – such as higher inflation, even tighter policy, financial stress, deeper weakness in major economies, or rising geopolitical tensions – could push the global economy into recession.

The World Bank predicts that global growth is expected to decelerate sharply to 1.7% in 2023 and increase modestly to 2.7% in 2024.

In its recent report, Global Economics Prospects, January 2024, the World Bank reported that global growth is projected to slow to 2.4% in 2024—the third consecutive year of deceleration—reflecting the lagged and ongoing effects of tight monetary policies to rein in decades-high inflation, restrictive credit conditions, and anemic global trade and investment.

The report also notes that downside risks to the outlook predominate.

The recent conflict in the Middle East, coming on top of the Russian invasion of Ukraine, has heightened geopolitical risks.

Conflict escalation could lead to surging energy prices, with broader implications for global activity and inflation.

Other risks highlighted in the report include financial stress related to elevated real interest rates, persistent inflation, weaker-than-expected growth in China, further trade fragmentation, and climate change-related disasters.

The World Bank predicts that global growth is expected to tick up to 2.7% in 2025.

The World Bank notes that the expected growth rates for 2024 and 2025 would be far below the 3.1% average of the 2010s.

A downturn in growth could negatively and materially affect future demand for our products and services in general, in certain geographic regions, in particular countries, or industry sectors, or could reduce demand for our in-person conferences.

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Furthermore, we will not be successful if we cannot compete effectively on quality of research and analysis, timely delivery of information, customer service, the ability to offer products to meet changing market needs for information and analysis, or price.

The COVID-19 pandemic had a material adverse impact on our operations and financial performance, specifically our Conferences segment, and may continue to have an adverse impact on our operations.

We face challenges from evolving factors related to the COVID-19 pandemic that are not within our control, remain uncertain and to which we may not effectively respond.

For example, our operations span numerous locations around the world, and many local governments and countries may impose various restrictions on our employees, partners and customers’ physical movement to limit the spread of COVID-19.

These restrictions are constantly changing, and we cannot predict how long and to what extent they will continue.

We also face increased operational hurdles as we make efforts to promote employee health and safety, including limiting travel and implementing a hybrid virtual-first work policy, meaning that most of our employees will have the option to work remotely at least some of the time, for the foreseeable future.

Additionally, for the continuing risks we face in our Conferences segment related to COVID-19, please refer above to the risk factor “The profitability and success of our conferences and other meetings are subject to external factors beyond our control.”

We are exposed to volatility in foreign currency exchange rates from our international operations.

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We have large offices in Connecticut, Florida, India, the United Kingdom, Spain and Australia, and other locations that are vulnerable to climate change effects.

Additionally, scarcity of fuel and/or rising green energy costs may increase our operations costs or affect client travel to our Conferences.

Changing market dynamics, global policy developments, and the increasing frequency and impact of extreme weather events on critical infrastructure in the U.S.

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We have committed to achieve net-zero greenhouse gas emissions by 2035 in accordance with the SBTi's Net-Zero Standard.

Our ability to achieve this and other ESG goals is subject to numerous risks outside of our control.

Our failure to achieve them or continue practices that meet evolving stakeholder expectations in ESG could harm our reputation, adversely affect our ability to attract and retain employees or clients and expose us to increased scrutiny from investors and regulatory authorities.

approved Gartner’s near-term science-based emissions reductions targets.

Our ability to achieve these and other ESG goals is subject to numerous risks outside of our control.

In addition, standards and processes for measuring and reporting carbon emissions and other sustainability metrics may change over time, and may result in inconsistent data, or could result in significant revisions to our strategies and targets, or our ability to achieve them.

Our failure to achieve them or continue practices that meet evolving, and sometimes conflicting, stakeholder expectations in ESG could harm our reputation, adversely affect our ability to attract and retain employees or clients and expose us to increased scrutiny from investors and regulatory authorities.

Legal and Regulatory Risks

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In parallel, we commenced an internal investigation regarding this matter.

We voluntarily disclosed the matter to the SEC and Department of Justice (DOJ) in November 2018.

Since that time, we have cooperated fully with their review, and we are working toward a resolution.

At this time, we do not believe the ultimate outcome of these matters will have a material effect on our financial results, however, an unexpected adverse resolution of these matters could negatively impact our financial condition, results of operations, and liquidity.

In addition, continuously evolving data protection laws and regulations, such as the European Union General Data Protection Regulation (GDPR) and the decision in the Schrems II case, the California Consumer Privacy Act (CCPA) and California Privacy Rights Act (CPRA), the Brazilian General Data Protection Law (LGPD), the Chinese Cybersecurity, Data Security and Personal Information laws and other new and proposed data protection laws, pose increasingly complex compliance challenges.

We voluntarily disclosed the matter to the SEC and Department of Justice (DOJ) in November 2018 and cooperated fully with their review.

In May 2023, Gartner entered into a settlement agreement with the SEC, without admitting or denying the SEC’s allegations, which fully resolved this matter.

In addition, continuously evolving data protection laws and regulations, such as the European Union General Data Protection Regulation (GDPR), the California Consumer Privacy Act (CCPA) and California Privacy Rights Act (CPRA), the Brazilian General Data Protection Law (LGPD), the Chinese Cybersecurity, Data Security and Personal Information laws and other new and proposed data protection laws, pose increasingly complex compliance challenges.

We have implemented GDPR, CCPA, CPRA and LGPD compliance programs, as well as policies and processes to comply with the applicable Chinese data protection laws.

12 unchanged sentences

Corporate tax reform, base-erosion efforts and tax transparency continue to be high priorities in many countries.

Tax reform legislation is being proposed or enacted in a number of jurisdictions where we do business.

The Organization for Economic Co-operation and Development (“the OECD”) has issued various proposals that would change long-standing global tax principles.

These proposals include a two-pillar approach to global taxation (BEPS 2.0/ Pillar Two), focusing on global profit allocation and a global minimum tax rate.

On December 12, 2022, the European Union member states agreed to implement the OECD’s global corporate minimum tax rate of 15%, to be effective as of January 2024.

Other countries are also actively considering changes to their tax laws to adopt certain parts of the OECD’s proposals.

In December 2022, South Korea

enacted new global minimum tax rules to align with Pillar Two.

The enactment of this and similar legislation could significantly increase our tax obligations in many countries where we do business.

These proposals include a two-pillar approach to global taxation (BEPS 2.0/ Pillar Two), focusing on global profit allocation and a 15% global corporate minimum tax rate.

In December 2022, the European Union adopted a directive requiring member states to incorporate similar provisions into their domestic laws, to be effective as of January 2024 and January 2025.

In 2023, the OECD issued administrative guidance providing transition and safe harbor rules that may effectively delay the application of these legislative changes in certain countries until January 2027.

Several countries in which Gartner does business have proposed or enacted new laws or are actively considering changes to their tax laws to align

with OECD proposals.

Significant details around the provisions are still uncertain as the OECD and participating countries continue to work on defining the underlying rules and administrative procedures.

Enactment of this and similar legislation could significantly increase our tax obligations in countries where we do business.

These actual, potential, and other changes, both individually and collectively, could materially increase our effective tax rate and negatively impact our financial position, results of operations, and cash flows.

8 unchanged sentences

However, failure of any employee to comply with any of these laws, regulations or our policies, could result in a range of liabilities for the employee and for the Company, including, but not limited to, significant penalties and fines, sanctions and/or litigation, and the expenses associated with defending and resolving any of the foregoing, any of which could have a negative impact on our reputation and business.

Risks Related to Our Common Stock

Our anti-takeover protections may discourage or prevent a change of control, even if a change in control would be beneficial to our stockholders.

Provisions of our restated certificate of incorporation and bylaws and Delaware law may make it difficult for any party to acquire control of us in a transaction not approved by our Board of Directors.

These provisions include:

(i) the ability of our Board of Directors to issue and determine the terms of preferred stock;

(ii) advance notice requirements for inclusion of stockholder proposals at stockholder meetings;

and (iii) the anti-takeover provisions of Delaware law.

These provisions could discourage or prevent a change of control or change in management that might provide stockholders with a premium to the market price of their common stock.

UNRESOLVED STAFF COMMENTS.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors