What changed in this filing

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Item 7. Management’s Discussion and Analysis

2024-02-15 compared with 2023-02-16 · 83 added, 106 removed, 283 unchanged (40% of the section changed)

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changes in macroeconomic and market conditions and market volatility, including interest rates and the effect on the credit markets and access to capital;

the impact of global economic and geopolitical conditions, including inflation, recession and the COVID-19 pandemic;

the impact of global economic and geopolitical conditions, including inflation, and recession;

our ability to carry out our strategic initiatives and manage associated costs;

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our ability to grow or sustain revenue from individual customers;

our ability to attract and retain a professional staff of research analysts and consultants as well as experienced sales personnel upon whom we are dependent, especially in light of increasing labor competition;

our ability to achieve continued customer renewals and achieve new contract value, backlog and deferred revenue growth in light of competitive pressures;

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our ability to enforce and protect our intellectual property rights;

our ability to keep pace with technological developments in artificial intelligence;

additional risks associated with international operations, including foreign currency fluctuations;

the impact on our business resulting from changes in international conditions, including those resulting from the war in Ukraine and current and future sanctions imposed by governments or other authorities;

the impact on our business resulting from changes in international conditions, including those resulting from the conflict in the Middle East, the war in Ukraine and current and future sanctions imposed by governments or other authorities;

the impact of restructuring and other charges on our businesses and operations;

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our ability to meet ESG commitments;

the impact of changes in tax policy (including the recently enacted Inflation Reduction Act of 2022) and heightened scrutiny from various taxing authorities globally;

the impact of changes in tax policy (including global minimum tax legislation) and heightened scrutiny from various taxing authorities globally;

changes to laws and regulations;

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Factors that might cause such a difference include, but are not limited to, those listed above or described under “Risk Factors” in Item 1A of this Annual Report on Form 10-K.

In addition, historical, current and forward-looking sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future.

Readers should not place undue reliance on these forward-looking statements, which reflect management’s opinion only as of the date on which they were made.

Forward-looking statements in this Annual Report on Form 10-K speak only as of the date hereof, and forward-looking statements in documents attached that are incorporated by reference speak only as of the date of those documents.

Forward-looking statements in this Annual Report on Form 10-K speak

only as of the date hereof, and forward-looking statements in documents attached that are incorporated by reference speak only as of the date of those documents.

Except as required by law, we disclaim any obligation to review or update these forward-looking statements to reflect events or circumstances as they occur.

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Gartner, Inc.

IT) delivers actionable, objective insight to executives and their teams.

Our expert guidance and tools enable faster, smarter decisions and stronger performance on an organization’s mission critical priorities.

We are a trusted advisor and an objective resource for more than 15,000 enterprises in approximately 90 countries and territories — across all major functions, in every industry and enterprise size.

IT) delivers actionable, objective insight that drives smarter decisions and stronger performance on an organization’s mission-critical priorities.

We are a trusted advisor and an objective resource for close to 15,000 enterprises in approximately 90 countries and territories — across all major functions, in every industry and enterprise size.

Gartner delivers its products and services globally through three business segments – Research, Conferences and Consulting, as described below.

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Through custom analysis and on-the-ground support we enable optimized technology investments and stronger performance on our clients’ mission critical priorities.

Recent Events

The invasion of Ukraine by Russia and the sanctions and other measures being imposed in response to this conflict have increased the level of economic and political uncertainty.

In March 2022, we began winding down our business in Russia.

Russia has not composed a material portion of our consolidated revenues, net income, net assets or workforce.

We do not have a business in Ukraine.

Other impacts due to this evolving situation are currently unknown and could subject our business to materially adverse consequences should the situation escalate or cause an expansion of economic disruption beyond its current scope to the rest of Europe, where a material portion of our business is carried out.

A prolonged disruption may adversely affect our business operations, financial performance and results of operations.

Inflation rates, particularly in North America and Europe, have increased significantly in the past year.

Inflation has not had a material effect on our business operations, financial performance and results of operations, other than its impact on the general economy.

However, if our costs, in particular personnel-related costs, were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases in future periods.

Our inability or failure to realize these offsets could adversely affect our business operations, financial performance and results of operations.

On August 16, 2022, the Inflation Reduction Act of 2022 was enacted into law in the United States.

The statute includes a 15% corporate alternative minimum tax on U.S.

corporations with adjusted financial statement income in excess of $1.0 billion which is effective for taxable years beginning after December 31, 2022.

The statute also includes a 1% excise tax on publicly traded U.S.

corporations for the value of any of its stock that is repurchased by the corporation, excluding certain excepted repurchases.

We do not expect it will have a material impact on our future U.S.

tax expense, cash taxes and effective tax rate.

We also do not expect it to have a material impact on the amount of potential future share repurchases.

In November 2022, we entered into a definitive agreement to sell our TalentNeuron business.

As of December 31, 2022, the assets and liabilities of TalentNeuron were considered held for sale, resulting in $49.0 million of assets held for sale and $30.8 million of liabilities held for sale on the Consolidated Balance Sheet.

The majority of the held for sale assets were goodwill, intangible assets, net and accounts receivable, with carrying amounts of $16.0 million, $9.5 million and $15.9 million, respectively, while the majority of the held for sale liabilities was deferred revenues, with a carrying amount of $27.1 million.

TalentNeuron is included in our Research segment.

On February 2, 2023, we completed the sale of TalentNeuron for approximately $164.0 million, prior to final working capital adjustments.

In February 2023, we completed the sale of a non-core business, TalentNeuron, for approximately $161.1 million after considerations of post-close adjustments.

TalentNeuron was included in the Company’s Research segment.

$161.1 million cash was received from the sale during the year ended December 31, 2023.

We recognized a pre-tax gain of $135.4 million on the sale of TalentNeuron, which is included in Gain from sale of divested operation in the Consolidated Statement of Operations for the year ended December 31, 2023.

BUSINESS MEASUREMENTS

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Utilization rates are calculated for billable headcount on a percentage basis by dividing total hours billed by total hours available to bill.

Billing rate represents earned billable revenue divided by total billable hours.

Average annualized revenue per billable headcount represents a measure of the revenue generating ability of an average billable consultant and is calculated periodically by multiplying the average billing rate per hour times the utilization percentage times the billable hours available for one year.

EXECUTIVE SUMMARY OF OPERATIONS AND FINANCIAL POSITION

The fundamentals of our strategy include a focus on creating actionable insights for executive leaders and their teams, delivering innovative and highly differentiated product offerings, building a strong sales capability, providing world class client service with a focus on client engagement and retention, and continuously improving our operational effectiveness.

We had total revenues of $5.5 billion in 2022, an increase of 16% compared to 2021 on a reported basis and 20% excluding the foreign currency impact.

We had total revenues of $5.9 billion in 2023, an increase of 8% compared to 2022 on both a reported basis and excluding the foreign currency impact.

Net income increased to $882.5 million in 2023 from $807.8 million in 2022 and diluted earnings per share was $11.08 in 2023 compared to $9.96 in 2022.

Research revenues increased to $4.6 billion in 2022, an increase of 12% compared to 2021 on a reported basis and 16% excluding the foreign currency impact.

Research revenues increased to $4.9 billion in 2023, an increase of 6% compared to 2022 on both a reported basis and excluding the foreign currency impact.

The Research gross contribution margin was 74% in both 2023 and 2022.

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The Conferences gross contribution margin was 50% and 54% in 2023 and 2022, respectively.

We held 25 in-person and 16 virtual conferences in 2022, and 39 virtual conferences in 2021.

We held 47 in-person conferences in 2023, and 25 in-person and 16 virtual conferences in 2022.

Consulting revenues increased to $514.7 million in 2023, an increase of 7% compared to 2022 on a reported basis and 8% excluding the foreign currency impact.

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Cash provided by operating activities was $1.2 billion and $1.1 billion during 2023 and 2022, respectively.

As of December 31, 2022, we had $698.0 million of cash and cash equivalents and approximately $1.0 billion of available borrowing capacity on our revolving credit facility.

As of December 31, 2023, we had $1.3 billion of cash and cash equivalents and approximately $1.0 billion of available borrowing capacity on our revolving credit facility.

During 2023, we repurchased 1.8 million shares of the Company’s common stock for an aggregate purchase price of approximately $0.6 billion.

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Note 1 — Business and Significant Accounting Policies and Note 9 — Revenue and Related Matters in the Notes to Consolidated Financial Statements provide additional information regarding our revenues.

Accounting for income taxes — The Company uses the asset and liability method of accounting for income taxes.

We estimate our income taxes in each of the jurisdictions where the Company operates.

Accounting for income taxes — We use the asset and liability method of accounting for income taxes.

We estimate our income taxes in each of the jurisdictions where we operate.

This process involves estimating our current tax expense or benefit together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes.

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Recognized tax positions are measured at the largest amount of benefit with greater than a 50% likelihood of being realized.

The Company uses estimates in determining the amount of unrecognized tax benefits associated with uncertain tax positions.

We use estimates in determining the amount of unrecognized tax benefits associated with uncertain tax positions.

Significant judgment is required in evaluating tax law and measuring the benefits likely to be realized.

Uncertain tax positions are periodically re-evaluated and adjusted as more information about their ultimate realization becomes available.

Accounting for stock-based compensation — The Company accounts for stock-based compensation awards in accordance with FASB ASC Topics 505 and 718 and SEC Staff Accounting Bulletins No.

The Company recognizes stock-based compensation expense, which is based on the fair value of the award on the date of grant, over the related service period.

Accounting for stock-based compensation — We account for stock-based compensation awards in accordance with FASB ASC Topics 505 and 718 and SEC Staff Accounting Bulletins No.

We recognize stock-based compensation expense, which is based on the fair value of the award on the date of grant, over the related service period.

Note 10 — Stock-Based Compensation in the Notes to Consolidated Financial Statements provides additional information regarding stock-based compensation.

Determining the appropriate fair value model and calculating the fair value of stock-based compensation awards requires the use of certain subjective assumptions, including the expected life of a stock-based compensation award and the Company’s common stock price volatility.

In addition, determining the appropriate periodic stock-based compensation expense requires management to estimate the likelihood of the achievement of certain performance targets.

The assumptions used in calculating the fair values of stock-based compensation awards and the related periodic expense represent management’s best estimates, which involve inherent uncertainties and the application of judgment.

As a result, if circumstances change and the Company deems it necessary in the future to modify the assumptions it made or to use different assumptions, or if the quantity and nature of the Company’s stock-based compensation awards changes, then the amount of expense may need to be adjusted and future stock-based compensation expense could be materially different from what has been recorded in the current period.

As a result, if circumstances change and we deem it necessary in the future to modify the assumptions we made or to use different assumptions, or if the quantity and nature of our stock-based compensation awards changes, then the amount of expense may need to be adjusted and future stock-based compensation expense could be materially different from what has been recorded in the current period.

A change in any of the terms or conditions of stock-based compensation awards is accounted for as a modification of the award.

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Acquisition and integration charges 9,587 9,079 508 6

Gain from sale of divested operation (135,410) — (135,410) nm

Operating income 1,236,894 1,100,106 136,788 12

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nm = not meaningful

Total revenues for 2022 were $5.5 billion, an increase of $741.9 million compared to 2021, or 16% on a reported basis and 20% excluding the foreign currency impact.

Total revenues for 2023 were $5.9 billion, an increase of $431.1 million compared to 2022, or 8% on both a reported basis and excluding the foreign currency impact.

The tables below present (i) revenues by geographic region (based on where the sale is fulfilled) and (ii) revenues by segment for the years indicated (in thousands).

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Refer to the section of this MD&A below entitled “Segment Results” for a discussion of revenues and results by segment.

Cost of services and product development was $1.7 billion in 2022, an increase of $249.7 million compared to 2021, or 17% on a reported basis and 21% excluding the foreign currency impact.

The increase in Cost of services and product development was primarily due to:

(i) increased compensation costs as a result of higher headcount, (ii) increased conference related expenses, due to the return to in-person destination conferences and (iii) increased research program expenses.

Cost of services and product development as a percent of revenues was 31% for both 2022 and 2021, respectively.

Selling, general and administrative (“SG&A”) expense was $2.5 billion in 2022, an increase of $325.3 million compared to 2021, or 15% on a reported basis and 19% excluding the foreign currency impact.

The increase in SG&A during the year ended December 31, 2022, as compared to the prior fiscal year, was primarily due to higher personnel costs in the current year, including higher salary expense due to increased headcount, as well as higher commission expense, following strong contract value growth in 2021, which is amortized as the related revenue is recognized.

Cost of services and product development was $1.9 billion in 2023, an increase of $209.5 million compared to 2022, or 12% on both a reported basis and excluding the foreign currency impact.

The increase in Cost of services and product development was primarily due to increased compensation costs as a result of higher headcount, as well as increased conference related expenses, due to the return to in-person destination conferences, partially offset by decreased research program expenses.

Cost of services and product development as a percent of revenues was 32% and 31% for 2023 and 2022, respectively.

Selling, general and administrative (“SG&A”) expense was $2.7 billion in 2023, an increase of $220.6 million compared to 2022, or 9% on both a reported basis and excluding the foreign currency impact.

The increase in SG&A during the year ended December 31, 2023, as compared to the prior fiscal year, was primarily due to higher personnel costs in the current year, including higher salary expense due to increased headcount.

These increases were partially offset by a reduction in facilities expense, related to a reduction of our real estate footprint.

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During 2023, we incurred charges associated with the impairment of right-of-use assets and other long-lived assets, related to certain office locations we no longer intend to use, of $20.4 million, compared to $54.0 million in 2022.

The year ended December 31, 2021 also included expenses related to cancelled conferences.

The number of quota-bearing sales associates in Global Technology Sales increased by 18% to 3,630 and in Global Business Sales increased by 22% to 1,144, compared to December 31, 2021.

The number of quota-bearing sales associates in Global Technology Sales increased slightly to 3,641 and in Global Business Sales increased by 8% to 1,188, compared to December 31, 2022.

On a combined basis, the total number of quota-bearing sales associates increased by 2% when compared to December 31, 2022.

SG&A expense as a percent of revenues was 46% and 45% during 2023 and 2022, respectively.

Depreciation decreased by 9% during 2022 compared to 2021.

The decrease for the year ended December 31, 2022 was primarily due to a reduction in leasehold improvements depreciation as a result of the impairment losses recorded in the fourth quarter of 2021 and the year ended December 31, 2022.

Amortization of intangibles decreased by 10% during 2022 compared to 2021 due to certain intangible assets that became fully amortized in 2021.

Depreciation increased by 6% during 2023 compared to 2022.

The increase for the year ended December 31, 2023 was primarily due to increased computer equipment and software additions in 2022 and 2023, partially offset by a reduction in leasehold improvements depreciation as a result of the impairment losses recorded during 2022 and 2023.

Amortization of intangibles decreased by 6% during 2023 compared to 2022 primarily due to intangible assets divested as part of the sale of our TalentNeuron business.

Acquisition and integration charges increased by $0.5 million during the year ended December 31, 2023, compared to the same period in 2022.

The increase is primarily due to expenses related to the pending divestiture of our TalentNeuron business.

Operating income was $1.1 billion and $915.8 million during 2022 and 2021, respectively.

The increase in operating income was due to increased revenue, partially offset by an increase in cost of services and product development and selling, general and administrative expenses.

Interest expense, net increased by $4.7 million during 2022 compared to 2021.

The increase in interest expense, net was primarily due to an increase in debt as a result of the issuance of the 2029 Notes in June 2021 and higher interest rates on our term loan, partially offset by increased interest income, as well as lower interest expense due to the maturation of $700.0 million in fixed-for-floating interest rate swap contracts in March 2022.

Gain on event cancellation insurance claims of $152.3 million during the year ended December 31, 2021 reflected proceeds, net of expense recoveries, related to the 2020 conference cancellation insurance claims.

Gain from sale of divested operation was attributable to the sale of our TalentNeuron business in February 2023.

We recognized a pre-tax gain of $135.4 million during the year ended December 31, 2023.

Operating income was $1.2 billion and $1.1 billion during 2023 and 2022, respectively.

The increase in operating income was primarily due to the gain from sale of divested operation, as well as increased revenue, partially offset by an increase in cost of services and product development and selling, general and administrative expenses.

Interest expense, net decreased by $27.1 million during 2023 compared to 2022.

The decrease in interest expense, net was primarily due to increased interest income, as well as lower interest expense due to the maturation of $700.0 million in fixed-for-floating interest rate swap contracts in March 2022, partially offset by higher interest expense on our term loan.

Gain on event cancellation insurance claims of $3.1 million during the year ended December 31, 2023 reflected proceeds related to the 2020 conference cancellation insurance claims.

Other income, net for the years presented herein included the net impact of foreign currency gains and losses from our hedging activities, as well as sales of certain state tax credits and the recognition of other tax incentives.

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Provision for income taxes was $264.7 million and $219.4 million during 2023 and 2022, respectively, with an effective income tax rate of 23.1% and 21.4% for 2023 and 2022, respectively.

The 2021 effective tax rate includes a benefit of approximately $54.1 million from intercompany sales of certain intellectual property, while no such benefit occurred in 2022.

This benefit represents the value of future tax deductions for amortization of the assets in the acquiring jurisdiction, net of any tax recognized in the selling jurisdiction.

The Company’s intellectual property footprint continues to evolve and may result in tax rate volatility in the future.

The increase in the effective income tax rate in 2023 was primarily the result of changes in unrecognized tax benefits year over year.

Note 12 — Income Taxes in the Notes to Consolidated Financial Statements provides additional information regarding the Company’s income taxes.

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Additionally, our diluted net income per share increased by $1.12 in 2023 compared to 2022.

These year-over-year changes reflect the increase in our 2022 operating income and higher Other income, net, partially offset by the gain on event cancellation insurance claims recognized in 2021 and increased income tax expense in 2022 compared to 2021.

The increase in net income during 2023 was primarily the result of the gain from sale of divested operations, as well as increased revenue and interest income, partially offset by increased operating expenses, a lower gain from de-designated interest rate swaps and higher income tax expense.

SEGMENT RESULTS

We evaluate reportable segment performance and allocate resources based on gross contribution margin.

Gross contribution is defined as operating income or loss excluding certain Cost of services and product development expenses, SG&A expenses, Depreciation, Amortization of intangibles, and Acquisition and integration charges.

Gross contribution is defined as operating income or loss excluding certain Cost of services and product development expenses, SG&A expenses,

Depreciation, Amortization of intangibles, and Acquisition and integration charges.

Gross contribution margin is defined as gross contribution as a percent of revenues.

Reportable Segments

The sections below present the results of the Company’s three reportable business segments:

Research, Conferences and Consulting.

The sections below present the results of the Company’s three business segments – Research, Conferences and Consulting, as described below.

The Year Ended December 31, 2023 The Year Ended December 31, 2022 Increase

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Business Measurements:

Contract Value (1), (3)

$ 4,838,600 $ 4,490,700 $ 347,900 8 %

Global Technology Sales (2):

Contract value (1), (3) $ 3,747,600 $ 3,524,000 $ 223,600 6 %

Client retention 86 % 86 % — point —

Wallet retention 105 % 106 % (1) point —

Client retention 83 % 86 % (3) points —

Wallet retention 101 % 105 % (4) points —

Global Business Sales (2):

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Contract values as of December 31, 2022 have been calculated using the same foreign currency rates as 2023.

Research revenues increased by $503.4 million during 2022 compared to 2021, or 12% on a reported basis and 16% excluding the foreign currency impact.

The gross contribution margin was 74% in both 2022 and 2021.

The increase in revenues during 2022 was primarily due to strong Research contract value growth in 2021 and 2022.

Research revenues increased by $282.3 million during 2023 compared to 2022, or 6% on both a reported basis and excluding the foreign currency impact.

The increase in revenues during 2023 was primarily due to strong Research contract value growth in 2022.

The gross contribution margin was 74% in both 2023 and 2022, as the increase in revenue and decreased research program expenses were offset by an increase in personnel expenses to support future growth.

Contract value increased to $4.8 billion at December 31, 2023, or 8% compared to December 31, 2022 on a foreign currency neutral basis.

All industry sectors grew at double-digit rates, other than technology and media, which grew at high single digit rates.

The fastest growth was in the transportation, retail and manufacturing sectors.

All industry sectors grew at least high single-digit rates, other than technology and media.

The fastest growth was in the public, energy and manufacturing sectors.

Global Technology Sales (“GTS”) contract value increased by 6% at December 31, 2023 when compared to December 31, 2022.

The increase in GTS contract value was primarily due to new business from new and existing clients.

GTS contract value increased by double-digits for the majority of sectors.

Global Business Sales (“GBS”) contract value increased by 19% year-over-year, also primarily driven by new business from new and existing clients.

Nearly all of our GBS practices achieved double-digit growth rates, with the majority of enterprise size and sectors growing more than 15% year-over-year.

GTS client retention was 86% as of both December 31, 2022 and 2021, while wallet retention was 105% and 106%, as of December 31, 2022 and 2021, respectively.

The increase in GTS contract value was primarily due to new business from existing clients.

GTS contract value increased by at least mid single-digits for the majority of enterprise sizes and sectors.

Global Business Sales (“GBS”) contract value increased by 13% year-over-year, also primarily driven by new business from existing clients.

The majority of our GBS practices achieved double-digit growth rates, with the majority of enterprise sizes and sectors also growing double-digits year-over-year.

GTS client retention was 83% and 86% as of December 31, 2023 and 2022, respectively, while wallet retention was 101% and 105%, as of December 31, 2023 and 2022, respectively.

GBS client retention was 87% and 89% as of December 31, 2023 and 2022, respectively, while wallet retention was 107% and 112% as of December 31, 2023 and 2022, respectively.

The decrease in GTS and GBS wallet retention was largely due to lower levels of incremental spending by existing clients compared to the same period in 2022.

The Year Ended December 31, 2023 The Year Ended December 31, 2022 Increase

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Conferences revenues increased by $115.9 million during 2023 compared to 2022, or 30% on a reported basis and 29% excluding the foreign currency impact.

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

We held 25 in-person destination conferences and 16 virtual conferences during the year ended December 31, 2022.

We held 39 virtual conferences during the year ended December 31, 2021.

The increase in revenues for the year ended December 31, 2022 was primarily due the return to in-person destination conferences.

We re-launched in-person destination conferences during the second quarter of 2022.

We held 47 in-person destination conferences during the year ended December 31, 2023.

We held 25 in-person conferences and 16 virtual conferences during the year ended December 31, 2022.

The increase in revenues for the year ended December 31, 2023 was primarily due the increase in in-person destination conferences.

The segment gross contribution margin was 50% and 54% in 2023 and 2022, respectively.

The lower gross contribution margin during 2022 was primarily due to the return to in-person destination conferences.

We expect Conferences gross contribution margin to decrease from 2021 and 2022 levels as the mix of in-person destination conferences increases.

The lower gross contribution margin during 2023 was also primarily due to the increase in in-person destination conferences.

As Of And For The Year Ended December 31, 2023 As Of And For The Year Ended December 31, 2022 Increase

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Gross contribution (1) $ 181,501 $ 189,834 $ (8,333) (4) %

Gross contribution margin 39 % 38 % 1 point —

Gross contribution margin 35 % 39 % (4) points —

Business Measurements:

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Backlog as of December 31, 2022 has been calculated using the same foreign currency rates as 2023.

We changed our method of calculating backlog beginning in 2022 to include multi-year contracts.

Consulting revenues increased 7% during 2023 compared to 2022 on a reported basis and 8% excluding the foreign currency impact.

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The segment gross contribution margin was 35% and 39% in 2023 and 2022, respectively.

The increase in gross contribution margin during 2022 was primarily due to the increase in revenue.

The decrease in gross contribution margin during 2023 was primarily due to increased personnel expense related to higher headcount, partially offset by the increase in revenue.

Backlog increased by $27.6 million, or 21%, from December 31, 2022 to December 31, 2023.

The change in our method of calculating backlog noted above contributed approximately 13 percentage points to the backlog growth rate.

LIQUIDITY AND CAPITAL RESOURCES

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Note 6 — Debt in the Notes to Consolidated Financial Statements provides additional information regarding the Company’s outstanding debt obligations.

At December 31, 2022, we had $698.0 million of cash and cash equivalents and approximately $1.0 billion of available borrowing capacity on the revolving credit facility under our 2020 Credit Agreement.

At December 31, 2023, we had $1.3 billion of cash and cash equivalents and approximately $1.0 billion of available borrowing capacity on the revolving credit facility under our 2020 Credit Agreement.

We believe that the Company has adequate liquidity and access to capital markets to meet its currently anticipated needs for both the next twelve months and the foreseeable future.

We have historically generated significant cash flows from our operating activities.

Our operating cash flow has been continuously maintained by the leverage characteristics of our subscription-based business model in our Research segment, which is our largest business segment and historically has constituted a significant portion of our total revenues.

The majority of our Research customer contracts are paid in advance and, combined with a strong customer retention rate and high incremental margins, has resulted in continuously strong operating cash flow.

We have historically generated significant cash flows from our operating activities, benefiting from the favorable working capital dynamics of our subscription-based business model in our Research segment, which is our largest business segment and historically has constituted a significant portion of our total revenues.

The majority of our Research customer contracts are paid in advance and, combined with a strong customer retention rate and high incremental margins, our subscription-based business model has resulted in continuously strong operating cash flow.

Cash flow generation has also benefited from our ongoing efforts to improve the operating efficiencies of our businesses as well as a focus on the optimal management of our working capital as we increase sales.

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Cash provided by operating activities $ 1,155,737 $ 1,101,422 $ 54,315

Cash used in investing activities (117,558) (80,467) (37,091)

Cash provided by (used in) investing activities 54,157 (117,558) 171,715

Cash used in financing activities (588,881) (1,027,442) 438,561

Net (decrease) increase in cash and cash equivalents and restricted cash (43,578) 74,394 (117,972)

Net increase (decrease) in cash and cash equivalents and restricted cash 621,013 (43,578) 664,591

Effects of exchange rates (13) (18,425) 18,412

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Cash provided by operating activities was $1.2 billion and $1.1 billion in 2023 and 2022, respectively.

The year-over-year decrease was primarily due to $166.9 million of insurance proceeds received in the 2021 period related to 2020 event cancellation claims, as well as higher commission and interest payments in 2022, partially offset by reduced income tax payments.

Cash used in investing activities was $117.6 million and $80.5 million in 2022 and 2021, respectively.

The increase from 2021 to 2022 was the result of increased capital expenditures primarily due to higher capitalized software and computer equipment additions, partially offset by lower spending on acquisitions.

The year-over-year increase was primarily due to increased operating income, excluding the gain from sale of divested operation, and strong collections, partially offset by increased income tax payments, in part as a result of the gain from sale of divested operation in 2023.

Cash provided by (used in) investing activities was $54.2 million and $(117.6) million in 2023 and 2022, respectively.

The increase from 2022 to 2023 was primarily the result of the proceeds received from the sale of our TalentNeuron business in February 2023.

Cash used in financing activities was $0.6 billion and $1.0 billion in 2023 and 2022, respectively.

During the 2023 period, we used $0.6 billion of cash for share repurchases and paid a net $7.8 million in debt principal repayments.

During the 2021 period, we issued $600.0 million of 3.625% Senior Notes due 2029, and repaid $100.0 million on our term loan facility under the 2020 Credit Agreement with a portion of the proceeds from the issuance of the 2029 Notes.

During 2021, we used $1.7 billion for share repurchases.

Additionally during 2021, we paid $7.3 million in deferred financing fees related to our financing activities.

See Note 6 — Debt in the Notes to Consolidated Financial Statements provides additional information regarding the Company’s financing activities in 2021.

During the 2022 period, we used $1.0 billion for share repurchases and paid a net $5.9 million in debt principal repayments.

OBLIGATIONS AND COMMITMENTS

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Note 6 — Debt in the Notes to Consolidated Financial Statements provides additional information regarding the Company’s outstanding debt obligations.

From time to time, the Company may seek to retire or repurchase its outstanding debt through various methods including open

market repurchases, negotiated block transactions, or otherwise, all or some of which may be effected through Rule 10b5-1 plans.

Such transactions, if any, depend on prevailing market conditions, our liquidity and capital requirements, contractual restrictions, and other factors, and may involve material amounts.

Off-Balance Sheet Arrangements

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In addition to the contractual cash commitments included in the above table, the Company has other payables and liabilities that may be legally enforceable but are not considered contractual commitments.

Information regarding the Company’s payables and liabilities is included in Note 5 — Accounts Payable and Accrued and Other Liabilities in the Notes to Consolidated Financial Statements.

Information regarding the Company’s payables and liabilities is included in Note 5 — Accounts Payable and Accrued and Other Liabilities and Note 12 — Income Taxes in the Notes to Consolidated Financial Statements.

RECENTLY ISSUED ACCOUNTING STANDARDS

2 unchanged sentences

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 7. Management’s Discussion and Analysis