UNITED STATES |
SECURITIES AND EXCHANGE COMMISSION |
Washington, DC 20549 |
FORM 8-K |
CURRENT REPORT |
Pursuant to Section 13 or 15(d) of the |
Securities Exchange Act of 1934 |
Date of Report (Date of earliest event reported) |
July 26, 2018 |
GARTNER, INC. |
(Exact name of registrant as specified in its charter) |
DELAWARE | 1-14443 | 04-3099750 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
P.O. Box 10212 |
56 Top Gallant Road |
Stamford, CT 06902-7747 |
(Address of Principal Executive Offices, including Zip Code) |
(203) 316-1111 |
(Registrant’s telephone number, including area code) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
EXHIBIT NO. | DESCRIPTION | |
Press Release issued August 1, 2018 with respect to financial results for Gartner, Inc. for the three and six months ended June 30, 2018. |
Gartner, Inc. | ||
Date: August 1, 2018 | By: | /s/ Craig W. Safian |
Craig W. Safian Executive Vice President and Chief Financial Officer |
Gartner | Press Release |
• | Revenues: $1.0 billion, +19%; adjusted revenues excluding divested operations: $1.0 billion, +14%. |
• | Net income: $46 million; adjusted EBITDA excluding divested operations: $191 million, +11%. |
• | Diluted EPS: $0.50; adjusted EPS: $1.03. |
• | Operating cash flow: $174 million; free cash flow: $183 million. |
• | Sold several non-core assets for $406 million in net cash. |
• | Repurchased 0.5 million common shares for $68 million and paid down $554 million of debt. |
• | Revenues $3.9-4.0 billion; adjusted revenues $3.9-4.0 billion. |
• | Net income $104-140 million; adjusted EBITDA $710-760 million. |
• | Diluted EPS $1.12-1.51; adjusted EPS $3.51-3.91. |
• | Operating cash flow $425-475 million; free cash flow $416-456 million. |
($ in millions, except per share data) | Three Months Ended | ||||||||||||
June 30, | % | ||||||||||||
2018 | 2017 | Change | |||||||||||
GAAP Metrics: | |||||||||||||
Revenues | $ | 1,001 | $ | 844 | 19 | % | (a) | ||||||
Net income (loss) | 46 | (92 | ) | >100% | |||||||||
Diluted EPS | 0.50 | (1.03 | ) | >100% | |||||||||
Operating cash flow | $ | 174 | $ | 112 | 55 | % |
Non-GAAP Metrics: | |||||||||||||
Adjusted revenues excluding divested operations | $ | 1,001 | $ | 879 | 14 | % | |||||||
Adjusted EBITDA excluding divested operations | 191 | 172 | 11 | % | |||||||||
Adjusted EPS | 1.03 | 0.88 | 17 | % | |||||||||
Free cash flow | $ | 183 | $ | 129 | 42 | % | |||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||||||
2018 | 2017 | % Change | FX Neutral | 2018 | 2017 | % Change | ||||||||||||||||||||
GAAP Metrics: | ||||||||||||||||||||||||||
Revenues | $ | 770 | $ | 614 | 25 | % | 23 | % | $ | 1,534 | $ | 1,125 | 36 | % | (a) | |||||||||||
Direct expense | 237 | 213 | 11 | % | 10 | % | 470 | 373 | 26 | % | ||||||||||||||||
Gross contribution | $ | 533 | $ | 401 | 33 | % | 29 | % | $ | 1,064 | $ | 752 | 42 | % | ||||||||||||
Contribution margin | 69 | % | 65 | % | 4 points | 69 | % | 67 | % | 2 points | ||||||||||||||||
Non-GAAP Metrics: | ||||||||||||||||||||||||||
Adjusted revenues | $ | 771 | $ | 675 | 14 | % | 12 | % | $ | 1,541 | $ | 1,330 | 16 | % | ||||||||||||
Adjusted contribution | 534 | 462 | 16 | % | 13 | % | 1,071 | 915 | 17 | % | ||||||||||||||||
Adjusted contribution margin | 69 | % | 68 | % | 1 point | 70 | % | 69 | % | 1 point | ||||||||||||||||
Business Measurements: | ||||||||||||||||||||||||||
Total contract value (b) | $ | 2,940 | $ | 2,632 | 12 | % | ||||||||||||||||||||
For GTS (c) : | ||||||||||||||||||||||||||
Contract value (b) | $ | 2,329 | $ | 2,045 | 14 | % | ||||||||||||||||||||
Client retention | 82 | % | 83 | % | (1) point | |||||||||||||||||||||
Wallet retention | 105 | % | 104 | % | 1 point | |||||||||||||||||||||
Client enterprises | 12,375 | 11,696 | 6 | % | ||||||||||||||||||||||
For GBS (c) : | ||||||||||||||||||||||||||
Contract value (b) | $ | 611 | $ | 587 | 4 | % | ||||||||||||||||||||
Client retention | 83 | % | 79 | % | 4 points | |||||||||||||||||||||
Wallet retention | 97 | % | 97 | % | — | |||||||||||||||||||||
Client enterprises | 5,659 | 5,619 | 1 | % |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||||||
2018 | 2017 | % Change | FX Neutral | 2018 | 2017 | % Change | ||||||||||||||||||||
GAAP Metrics: | ||||||||||||||||||||||||||
Revenues | $ | 111 | $ | 91 | 22 | % | 21 | % | $ | 157 | $ | 126 | 24 | % | (a) | |||||||||||
Direct expense | 48 | 41 | 15 | % | 14 | % | 77 | 63 | 23 | % | ||||||||||||||||
Gross contribution | $ | 63 | $ | 50 | 28 | % | 27 | % | $ | 80 | $ | 63 | 26 | % | ||||||||||||
Contribution margin | 57 | % | 55 | % | 2 points | 51 | % | 50 | % | 1 point | ||||||||||||||||
Non-GAAP Metrics: | ||||||||||||||||||||||||||
Adjusted revenues | $ | 111 | $ | 95 | 17 | % | 16 | % | $ | 157 | $ | 131 | 20 | % | ||||||||||||
Adjusted contribution | 63 | 54 | 18 | % | 18 | % | 80 | 67 | 19 | % | ||||||||||||||||
Adjusted contribution margin | 57 | % | 57 | % | — | 51 | % | 51 | % | — | ||||||||||||||||
Business Measurements (b) : | ||||||||||||||||||||||||||
Number of destination events held | 24 | 26 | (8 | )% | ||||||||||||||||||||||
Number of destination events attendees | 20,896 | 18,539 | 13 | % |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||||||
2018 | 2017 | % Change | FX Neutral | 2018 | 2017 | % Change | ||||||||||||||||||||
GAAP Metrics: | ||||||||||||||||||||||||||
Revenues | $ | 96 | $ | 92 | 5 | % | 2 | % | $ | 179 | $ | 170 | 5 | % | (a) | |||||||||||
Direct expense | 62 | 61 | 4 | % | 1 | % | 121 | 115 | 5 | % | ||||||||||||||||
Gross contribution | $ | 34 | $ | 31 | 7 | % | 5 | % | $ | 58 | $ | 55 | 4 | % | ||||||||||||
Contribution margin | 35 | % | 34 | % | 1 point | 32 | % | 33 | % | (1) point | ||||||||||||||||
Non-GAAP Metrics: | ||||||||||||||||||||||||||
Adjusted revenues | $ | 96 | $ | 92 | 5 | % | 2 | % | $ | 179 | $ | 170 | 5 | % | ||||||||||||
Adjusted contribution | 34 | 31 | 7 | % | 5 | % | 58 | 55 | 5 | % | ||||||||||||||||
Adjusted contribution margin | 35 | % | 34 | % | 1 point | 32 | % | 32 | % | — | ||||||||||||||||
Business Measurements: | ||||||||||||||||||||||||||
Backlog | $ | 106 | $ | 91 | 16 | % | ||||||||||||||||||||
Quarterly utilization | 67 | % | 65 | % | 2 points | |||||||||||||||||||||
Quarterly billable headcount | 710 | 667 | 6 | % | ||||||||||||||||||||||
Revenue per billable headcount (b) | $ | 397 | $ | 378 | 5 | % |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||||||
2018 | 2017 | % Change | FX Neutral | 2018 | 2017 | % Change | ||||||||||||||||||||
GAAP Metrics: | ||||||||||||||||||||||||||
Revenues | $ | 23 | $ | 47 | (51 | )% | (51 | )% | $ | 94 | $ | 47 | 100 | % | (a) | |||||||||||
Direct expense | 8 | 30 | (73 | )% | (73 | )% | 36 | 30 | 20 | % | ||||||||||||||||
Gross contribution | $ | 15 | $ | 17 | (13 | )% | (10 | )% | $ | 58 | $ | 17 | >100% | |||||||||||||
Contribution margin | 65 | % | 37 | % | 28 points | 62 | % | 37 | % | 25 points | ||||||||||||||||
Non-GAAP Metrics: | ||||||||||||||||||||||||||
Adjusted revenues | $ | 23 | $ | 74 | (69 | )% | (69 | )% | $ | 97 | $ | 143 | (32 | )% | ||||||||||||
Adjusted contribution | 15 | 44 | (66 | )% | (66 | )% | 61 | 81 | (25 | )% | ||||||||||||||||
Adjusted contribution margin | 65 | % | 59 | % | 6 points | 63 | % | 57 | % | 6 points | ||||||||||||||||
Adjusted revenues excluding divested operations | $ | 22 | $ | 17 | 29 | % | 41 | % | $ | 42 | $ | 35 | 20 | % | ||||||||||||
Adjusted contribution excluding divested operations | $ | 15 | $ | 9 | 67 | % | 84 | % | $ | 27 | $ | 17 | 59 | % | ||||||||||||
Adjusted contribution margin excluding divested operations | 68 | % | 53 | % | 15 points | 64 | % | 49 | % | 15 points |
($ in millions, except per share data) | ||||||||||
2018 Projected Range | ||||||||||
Revenues: | ||||||||||
Research | $ | 3,093 | — | $ | 3,143 | |||||
Events | 380 | — | 400 | |||||||
Consulting | 340 | — | 355 | |||||||
Other | 107 | — | 127 | |||||||
Total revenue | 3,920 | — | 4,025 | |||||||
Deferred revenue fair value adjustment | 10 | — | 10 | |||||||
Total adjusted revenue (Non-GAAP) (a) | $ | 3,930 | — | $ | 4,035 | |||||
Adjusted Segment Revenues: | ||||||||||
Research | $ | 3,100 | — | $ | 3,150 | |||||
Events | 380 | — | 400 | |||||||
Consulting | 340 | — | 355 | |||||||
Other | $ | 110 | — | $ | 130 | |||||
Income: | ||||||||||
Net income | $ | 104 | — | $ | 140 | |||||
Adjusted EBITDA (Non-GAAP) (a), (b) | 710 | — | 760 | |||||||
Diluted EPS | 1.12 | — | 1.51 | |||||||
Adjusted EPS (Non-GAAP) (a), (b) | $ | 3.51 | — | $ | 3.91 | |||||
Expense: | ||||||||||
Stock-based compensation expense | $ | 71 | — | $ | 71 | |||||
Depreciation | 80 | — | 80 | |||||||
Amortization of intangibles | 185 | — | 185 | |||||||
Deferred revenue fair value adjustment | 11 | — | 11 | |||||||
Acquisition and integration charges and other non-recurring items | 111 | — | 111 | |||||||
Gain on divestitures | $ | (25 | ) | — | $ | (25 | ) | |||
Interest expense | $ | 116 | — | $ | 116 | |||||
Amortization of deferred financing fees | 14 | — | 14 | |||||||
Total interest expense | $ | 130 | — | $ | 130 | |||||
Cash Flow: | ||||||||||
Operating cash flow | $ | 425 | — | $ | 475 | |||||
Acquisition, integration, and other non-recurring payments | 126 | — | 126 | |||||||
Capital expenditures | (135 | ) | — | (145 | ) | |||||
Free cash flow (Non-GAAP) (a) | $ | 416 | — | $ | 456 |
Research | Events | Consulting | Other | Unallocated | Total | |||||||||||||||||||
GAAP revenue | $ | 770 | $ | 111 | $ | 96 | $ | 23 | $ | — | $ | 1,001 | ||||||||||||
Add: Amortization of deferred revenue fair value adjustment (a) | 1 | — | — | — | — | 1 | ||||||||||||||||||
Adjusted revenue | 771 | 111 | 96 | 23 | — | 1,002 | ||||||||||||||||||
Less: divested operations | — | — | — | (1 | ) | — | (1 | ) | ||||||||||||||||
Adjusted revenue excluding divested operations | $ | 771 | $ | 111 | $ | 96 | $ | 22 | $ | — | $ | 1,001 | ||||||||||||
GAAP contribution | $ | 533 | $ | 63 | $ | 34 | $ | 15 | $ | — | $ | 645 | ||||||||||||
Add: Amortization of deferred revenue fair value adjustment (a) | 1 | — | — | — | — | 1 | ||||||||||||||||||
Less: Unallocated expense (b) | — | — | — | — | (11 | ) | (11 | ) | ||||||||||||||||
Adjusted contribution | 534 | 63 | 34 | 15 | (11 | ) | 635 | |||||||||||||||||
Less: divested operations | — | — | — | — | — | — | ||||||||||||||||||
Adjusted contribution excluding divested operations | $ | 534 | $ | 63 | $ | 34 | $ | 15 | $ | (11 | ) | $ | 635 | |||||||||||
Adjusted contribution margin excluding divested operations | 69 | % | 57 | % | 35 | % | 68 | % | — | 63 | % | |||||||||||||
Research | Events | Consulting | Other | Unallocated | Total | |||||||||||||||||||
GAAP revenue | $ | 1,534 | $ | 157 | $ | 179 | $ | 94 | $ | — | $ | 1,965 | ||||||||||||
Add: Amortization of deferred revenue fair value adjustment (a) | 7 | — | — | 3 | — | 10 | ||||||||||||||||||
Adjusted revenue | 1,541 | 157 | 179 | 97 | — | 1,975 | ||||||||||||||||||
Less: divested operations | — | — | — | (55 | ) | — | (55 | ) | ||||||||||||||||
Adjusted revenue excluding divested operations | $ | 1,541 | $ | 157 | $ | 179 | $ | 42 | $ | — | $ | 1,920 | ||||||||||||
GAAP contribution | $ | 1,064 | $ | 80 | $ | 58 | $ | 58 | $ | — | $ | 1,260 | ||||||||||||
Add: Amortization of deferred revenue fair value adjustment (a) | 7 | — | — | 3 | — | 10 | ||||||||||||||||||
Less: Unallocated expense (b) | — | — | — | — | (20 | ) | (20 | ) | ||||||||||||||||
Adjusted contribution | 1,071 | 80 | 58 | 61 | (20 | ) | 1,250 | |||||||||||||||||
Less: divested operations | — | — | — | (34 | ) | — | (34 | ) | ||||||||||||||||
Adjusted contribution excluding divested operations | $ | 1,071 | $ | 80 | $ | 58 | $ | 27 | $ | (20 | ) | $ | 1,216 | |||||||||||
Adjusted contribution margin excluding divested operations | 70 | % | 51 | % | 32 | % | 64 | % | — | 63 | % |
Research | Events | Consulting | Other | Unallocated | Total | |||||||||||||||||||
GAAP revenue | $ | 614 | $ | 91 | $ | 92 | $ | 47 | $ | — | $ | 844 | ||||||||||||
Add: Amortization of deferred revenue fair value adjustment (a) | 61 | 4 | — | 27 | — | 92 | ||||||||||||||||||
Adjusted revenue | 675 | 95 | 92 | 74 | — | 936 | ||||||||||||||||||
Less: divested operations | — | — | — | (57 | ) | — | (57 | ) | ||||||||||||||||
Adjusted revenue excluding divested operations | $ | 675 | $ | 95 | $ | 92 | $ | 17 | $ | — | $ | 879 | ||||||||||||
GAAP contribution | $ | 401 | $ | 50 | $ | 31 | $ | 17 | $ | — | $ | 499 | ||||||||||||
Add: Amortization of deferred revenue fair value adjustment (a) | 61 | 4 | — | 27 | — | 92 | ||||||||||||||||||
Less: Unallocated expense (b) | — | — | — | — | (7 | ) | (7 | ) | ||||||||||||||||
Adjusted contribution | 462 | 54 | 31 | 44 | (7 | ) | 584 | |||||||||||||||||
Less: divested operations | — | — | — | (35 | ) | — | (35 | ) | ||||||||||||||||
Adjusted contribution excluding divested operations | $ | 462 | $ | 54 | $ | 31 | $ | 9 | $ | (7 | ) | $ | 549 | |||||||||||
Adjusted contribution margin excluding divested operations | 68 | % | 57 | % | 34 | % | 53 | % | — | 62 | % | |||||||||||||
Research | Events | Consulting | Other | Unallocated | Total | |||||||||||||||||||
GAAP revenue | $ | 1,125 | $ | 126 | $ | 170 | $ | 47 | $ | — | $ | 1,469 | ||||||||||||
Add: Pre-acquisition revenue | 144 | 1 | — | 69 | — | 214 | ||||||||||||||||||
Add: Amortization of deferred revenue fair value adjustment (a) | 61 | 4 | — | 27 | — | 92 | ||||||||||||||||||
Adjusted revenue | 1,330 | 131 | 170 | 143 | — | 1,775 | ||||||||||||||||||
Less: divested operations | — | — | — | (108 | ) | — | (108 | ) | ||||||||||||||||
Adjusted revenue excluding divested operations | $ | 1,330 | $ | 131 | $ | 170 | $ | 35 | $ | — | $ | 1,667 | ||||||||||||
GAAP contribution | $ | 752 | $ | 63 | $ | 55 | $ | 17 | $ | — | $ | 888 | ||||||||||||
Add: Pre-acquisition contribution | 102 | — | — | 37 | — | 139 | ||||||||||||||||||
Add: Amortization of deferred revenue fair value adjustment (a) | 61 | 4 | — | 27 | — | 92 | ||||||||||||||||||
Less: Unallocated expense (b) | — | — | — | — | (8 | ) | (8 | ) | ||||||||||||||||
Adjusted contribution | 915 | 67 | 55 | 81 | (8 | ) | 1,111 | |||||||||||||||||
Less: divested operations | — | — | — | (64 | ) | — | (64 | ) | ||||||||||||||||
Adjusted contribution excluding divested operations | $ | 915 | $ | 67 | $ | 55 | $ | 17 | $ | (8 | ) | $ | 1,047 | |||||||||||
Adjusted contribution margin excluding divested operations | 69 | % | 51 | % | 32 | % | 49 | % | — | % | 63 | % | ||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
GAAP net income (loss) | $ | 46 | $ | (92 | ) | $ | 26 | $ | (56 | ) | ||||||
Interest expense, net | 37 | 44 | 72 | 50 | ||||||||||||
Gain on divestitures | (25 | ) | — | (25 | ) | — | ||||||||||
Other (income) expense, net | (1 | ) | — | (2 | ) | (1 | ) | |||||||||
Tax (benefit) provision | 29 | (50 | ) | 6 | (38 | ) | ||||||||||
Operating income (loss) | 86 | (98 | ) | 77 | (45 | ) | ||||||||||
Adjustments: | ||||||||||||||||
Stock-based compensation expense (a) | 14 | 16 | 44 | 39 | ||||||||||||
Depreciation, accretion, and amortization (b) | 67 | 84 | 136 | 100 | ||||||||||||
Amortization of deferred revenue fair value adjustment (c) | 1 | 91 | 10 | 92 | ||||||||||||
Acquisition and integration charges and other non-recurring items (d) | 23 | 92 | 85 | 105 | ||||||||||||
Subtotal | 191 | 185 | 352 | 291 | ||||||||||||
Plus: CEB pre-acquisition EBITDA (e) | — | — | — | 36 | ||||||||||||
Adjusted EBITDA | 191 | 185 | 352 | 327 | ||||||||||||
Less: Divested operations EBITDA (f) | — | (13 | ) | (8 | ) | (19 | ) | |||||||||
Adjusted EBITDA excluding divested operations | $ | 191 | $ | 172 | $ | 344 | $ | 308 |
Three Months Ended June 30, | ||||||||||||||||
2018 | 2017 | |||||||||||||||
Amount | Per share | Amount | Per share | |||||||||||||
GAAP net income (loss) | $ | 46 | $ | 0.50 | $ | (92 | ) | $ | (1.03 | ) | ||||||
Acquisition and other adjustments: | ||||||||||||||||
Amortization of acquired intangibles (a) | 50 | 0.54 | 65 | 0.72 | ||||||||||||
Amortization of deferred revenue fair value adjustment (b) | 1 | 0.01 | 91 | 1.01 | ||||||||||||
Acquisition & integration charges and other non-recurring items (c), (d) | 31 | 0.34 | 101 | 1.11 | ||||||||||||
Gain on divestitures | (25 | ) | (0.28 | ) | — | — | ||||||||||
Impact of Tax Cuts & Jobs Act of 2017 - provisional adjustment | 1 | 0.01 | — | — | ||||||||||||
Tax impact of adjustments (e) | (9 | ) | (0.09 | ) | (86 | ) | (0.95 | ) | ||||||||
Rounding | — | — | — | 0.02 | ||||||||||||
Adjusted net income and Adjusted EPS (f) | $ | 95 | $ | 1.03 | $ | 79 | $ | 0.88 |
Six Months Ended June 30, | ||||||||||||||||
2018 | 2017 | |||||||||||||||
Amount | Per share | Amount | Per share | |||||||||||||
GAAP net income (loss) | $ | 26 | $ | 0.29 | $ | (56 | ) | $ | (0.65 | ) | ||||||
Acquisition and other adjustments: | ||||||||||||||||
Amortization of acquired intangibles (a) | 102 | 1.10 | 72 | 0.82 | ||||||||||||
Amortization of deferred revenue fair value adjustment (b) | 10 | 0.11 | 92 | 1.05 | ||||||||||||
Acquisition & integration charges and other non-recurring items (c), (d) | 96 | 1.04 | 114 | 1.30 | ||||||||||||
Gain on divestitures | (25 | ) | (0.28 | ) | — | — | ||||||||||
Impact of Tax Cuts and Jobs Act of 2017 - provisional adjustment | 1 | 0.01 | — | — | ||||||||||||
Tax impact of adjustments (e) | (49 | ) | (0.53 | ) | (92 | ) | (1.04 | ) | ||||||||
Rounding | — | 0.01 | — | 0.01 | ||||||||||||
Adjusted net income and Adjusted EPS (f) | $ | 161 | $ | 1.75 | $ | 130 | $ | 1.49 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||
2018 | 2017 | 2018 | 2017 | (a) | |||||||||||||
GAAP cash provided by operating activities | $ | 174 | $ | 112 | $ | 177 | $ | 83 | |||||||||
Adjustments: | |||||||||||||||||
Plus: cash paid for acquisition, integration, and other non-recurring items | 31 | 48 | 73 | 65 | |||||||||||||
Less: cash paid for capital expenditures | (22 | ) | (31 | ) | (40 | ) | (42 | ) | |||||||||
Free Cash Flow | $ | 183 | $ | 129 | $ | 210 | $ | 106 |
2018 Full Year Guidance | ||||||||
Low | High | |||||||
Net income | $ | 104 | $ | 140 | ||||
Interest expense, net (a) | 130 | 130 | ||||||
Other (income) expense, net | 2 | 2 | ||||||
Gain on divestitures | (25 | ) | (25 | ) | ||||
Tax provision | 41 | 55 | ||||||
Operating income | 252 | 302 | ||||||
Normalizing adjustments: | ||||||||
Stock-based compensation expense | 71 | 71 | ||||||
Depreciation, accretion, and amortization | 266 | 266 | ||||||
Deferred revenue fair value adjustment | 10 | 10 | ||||||
Acquisition and integration charges and other nonrecurring items | 111 | 111 | ||||||
Adjusted EBITDA | $ | 710 | $ | 760 |
2018 Full Year Guidance | ||||||||
Low | High | |||||||
GAAP EPS | $ | 1.12 | $ | 1.51 | ||||
Normalizing adjustments: | ||||||||
Amortization of acquired intangibles | 1.49 | 1.49 | ||||||
Acquisition and integration charges and other nonrecurring items | 1.00 | 1.00 | ||||||
Deferred revenue fair value adjustment | 0.08 | 0.08 | ||||||
Gain on divestitures | (0.18 | ) | (0.18 | ) | ||||
Rounding | — | 0.01 | ||||||
Adjusted EPS | $ | 3.51 | $ | 3.91 |
June 30, | December 31, | ||||||
2018 | 2017 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 141,805 | $ | 538,908 | |||
Fees receivable, net | 1,083,990 | 1,176,843 | |||||
Deferred commissions | 183,481 | 205,260 | |||||
Prepaid expenses and other current assets | 199,208 | 124,632 | |||||
Assets held-for-sale | — | 542,965 | |||||
Total current assets | 1,608,484 | 2,588,608 | |||||
Property, equipment and leasehold improvements, net | 225,901 | 221,507 | |||||
Goodwill | 2,974,513 | 2,987,294 | |||||
Intangible assets, net | 1,177,297 | 1,292,022 | |||||
Other assets | 166,742 | 193,742 | |||||
Total Assets | $ | 6,152,937 | $ | 7,283,173 | |||
Liabilities and Stockholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable and accrued liabilities | $ | 542,071 | $ | 666,821 | |||
Deferred revenues | 1,687,724 | 1,630,198 | |||||
Current portion of long-term debt | 284,009 | 379,721 | |||||
Liabilities held-for-sale | — | 145,845 | |||||
Total current liabilities | 2,513,804 | 2,822,585 | |||||
Long-term debt, net of deferred financing fees | 2,146,829 | 2,899,124 | |||||
Other liabilities | 570,872 | 577,999 | |||||
Total Liabilities | 5,231,505 | 6,299,708 | |||||
Stockholders’ Equity | |||||||
Preferred stock | — | — | |||||
Common stock | 82 | 82 | |||||
Additional paid-in capital | 1,798,075 | 1,761,383 | |||||
Accumulated other comprehensive (loss) income, net | (24,051 | ) | 1,508 | ||||
Accumulated earnings | 1,659,658 | 1,647,284 | |||||
Treasury stock | (2,512,332 | ) | (2,426,792 | ) | |||
Total Stockholders’ Equity | 921,432 | 983,465 | |||||
Total Liabilities and Stockholders’ Equity | $ | 6,152,937 | $ | 7,283,173 |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenues: | |||||||||||||||
Research | $ | 770,314 | $ | 613,732 | $ | 1,534,238 | $ | 1,125,038 | |||||||
Events | 111,253 | 91,205 | 157,340 | 126,474 | |||||||||||
Consulting | 96,458 | 91,693 | 179,354 | 170,287 | |||||||||||
Other | 23,311 | 47,101 | 93,969 | 47,101 | |||||||||||
Total revenues | 1,001,336 | 843,731 | 1,964,901 | 1,468,900 | |||||||||||
Costs and expenses: | |||||||||||||||
Cost of services and product development | 367,637 | 352,004 | 724,846 | 589,613 | |||||||||||
Selling, general and administrative | 460,803 | 408,226 | 948,548 | 712,470 | |||||||||||
Depreciation | 16,711 | 18,057 | 33,121 | 28,297 | |||||||||||
Amortization of intangibles | 50,127 | 65,500 | 101,773 | 71,790 | |||||||||||
Acquisition and integration charges | 19,962 | 98,332 | 79,228 | 111,604 | |||||||||||
Total costs and expenses | 915,240 | 942,119 | 1,887,516 | 1,513,774 | |||||||||||
Operating income (loss) | 86,096 | (98,388 | ) | 77,385 | (44,874 | ) | |||||||||
Interest expense, net | (37,604 | ) | (43,956 | ) | (72,663 | ) | (49,862 | ) | |||||||
Gain from divested operations | 25,460 | — | 25,460 | — | |||||||||||
Other income (expense), net | 1,120 | (407 | ) | 2,019 | 482 | ||||||||||
Income (loss) before income taxes | 75,072 | (142,751 | ) | 32,201 | (94,254 | ) | |||||||||
Provision (benefit) for income taxes | 28,802 | (50,470 | ) | 5,518 | (38,406 | ) | |||||||||
Net income (loss) | $ | 46,270 | $ | (92,281 | ) | $ | 26,683 | $ | (55,848 | ) | |||||
Net income (loss) per share: | |||||||||||||||
Basic | $ | 0.51 | $ | (1.03 | ) | $ | 0.29 | $ | (0.65 | ) | |||||
Diluted | $ | 0.50 | $ | (1.03 | ) | $ | 0.29 | $ | (0.65 | ) | |||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 91,048 | 89,297 | 91,026 | 86,066 | |||||||||||
Diluted | 92,156 | 89,297 | 92,252 | 86,066 |
Six Months Ended | |||||||
June 30, | |||||||
2018 | 2017 | ||||||
Operating activities: | |||||||
Net income (loss) | $ | 26,683 | $ | (55,848 | ) | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||
Depreciation and amortization | 134,894 | 100,087 | |||||
Stock-based compensation expense | 45,300 | 53,573 | |||||
Deferred taxes | (18,019 | ) | (78,004 | ) | |||
Gain on divestitures | (25,460 | ) | — | ||||
Amortization and write-off of deferred financing fees | 10,601 | 9,475 | |||||
Changes in assets and liabilities, net of acquisitions and divestitures | 2,748 | 53,435 | |||||
Cash provided by operating activities | 176,747 | 82,718 | |||||
Investing activities: | |||||||
Additions to property, equipment and leasehold improvements | (40,126 | ) | (41,627 | ) | |||
Acquisitions - cash paid (net of cash acquired) | — | (2,604,178 | ) | ||||
Divestitures - cash received | 405,542 | — | |||||
Other | 1,000 | — | |||||
Cash provided by (used in) investing activities | 366,416 | (2,645,805 | ) | ||||
Financing activities: | |||||||
Proceeds from employee stock purchase plan | 7,627 | 5,662 | |||||
Proceeds from borrowings | — | 2,885,000 | |||||
Payments for deferred financing fees | — | (51,170 | ) | ||||
Payments on borrowings | (858,609 | ) | (119,812 | ) | |||
Purchases of treasury stock | (96,271 | ) | (33,786 | ) | |||
Cash (used in) provided by financing activities | (947,253 | ) | 2,685,894 | ||||
Net (decrease) increase in cash and cash equivalents and restricted cash | (404,090 | ) | 122,807 | ||||
Effects of exchange rates on cash and cash equivalents and restricted cash | (3,012 | ) | 10,406 | ||||
Cash and cash equivalents and restricted cash, beginning of period | 567,058 | 499,354 | |||||
Cash and cash equivalents and restricted cash, end of period | $ | 159,956 | $ | 632,567 |