Gartner, Inc. (NYSE: IT), the world’s leading research and advisory company, today announced that out of an abundance of caution and in consideration of travel restrictions and guidelines implemented by governments and commercial organizations due to the novel coronavirus (COVID-19), it has cancelled or postponed destination conferences scheduled for the remainder of the first quarter of 2020. These conferences include the Gartner Data & Analytics Summit in London and the Gartner Data & Analytics Summit in Texas, as well as some other smaller conferences.
Since the onset of the COVID-19 outbreak, our teams have been closely monitoring the rapidly evolving situation. Gartner’s highest priority is the health and safety of our associates, clients, vendors, partners, and other stakeholders. As such, we determined earlier in the quarter that it was prudent to cancel two smaller conferences that were scheduled to be held in Tokyo and Dubai.
Gartner estimates the first quarter 2020 financial impact from cancelling or postponing conferences will be approximately $36 million of Adjusted EBITDA, with the largest impact from the Data & Analytics Summit in Texas. This is Gartner’s current estimate as of the date of this announcement, and the ultimate adverse financial impact from these cancellations and postponements may be affected by a number of factors, including, among others, our ability to reschedule these conferences later in the year, our ability to recoup certain costs already expended on these conferences, and our ability to obtain reimbursement under our insurance policies. Additionally, the ongoing impact of COVID-19 remains difficult to project given uncertainty related to its magnitude, duration, geographic reach, impact on the global economy and potential travel restrictions.
Gartner noted it will seek to reschedule some conferences later in 2020 where feasible. Conferences scheduled for the second quarter of 2020 and beyond are currently expected to proceed as planned. The Company will continue to monitor the evolving situation and will be making determinations for future conferences on a case-by-case basis, with Gartner’s highest priority being the health and safety of all those involved. The Company will provide further information and expects to update its outlook for full year 2020 to reflect the above financial impact on its first quarter 2020 earnings call in early May 2020.
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FORWARD LOOKING STATEMENTS
Statements contained in this press release regarding the estimated impact of the COVID-19 outbreak on Gartner’s projected financial results, operations and prospects, and all other statements in this release other than recitation of historical facts are forward-looking statements within the meaning of Section 27A of the Securities Exchange Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements involve known and unknown risks, estimates, uncertainties and other factors that may cause actual results to be materially different. Such factors include, but are not limited to, the following: our ability to achieve and effectively manage growth, including our ability to integrate our acquisitions and consummate and integrate future acquisitions; our ability to pay our debt obligations; our ability to maintain and expand our products and services; our ability to expand or retain our customer base; 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; our ability to achieve continued customer renewals and achieve new contract value, backlog and deferred revenue growth in light of competitive pressures; our ability to carry out our strategic initiatives and manage associated costs; our ability to successfully compete with existing competitors and potential new competitors; business disruptions resulting from natural disasters, public health issues including the outbreak of COVID-19, terrorist acts, wars or other geopolitical activities; our ability to enforce or protect our intellectual property rights; additional risks associated with international operations, including foreign currency fluctuations; the U.K.’s exit from the European Union and its impact on our results; the impact of restructuring and other charges on our businesses and operations; cybersecurity incidents; general economic conditions; risks associated with the creditworthiness, budget cuts, and shutdown of governments and agencies; the impact of changes in tax policy and heightened scrutiny from various taxing authorities globally; uncertainty from the expected discontinuance of LIBOR and transition to any other interest rate benchmark; changes to laws and regulations; and other factors described under "Risk Factors" in our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, which can be found on Gartner’s website at https://investor.gartner.com and the SEC’s website at www.sec.gov. Forward-looking statements included herein speak only as of the date hereof and Gartner disclaims any obligation to revise or update such statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events or circumstances, except as required by applicable law.
NON-GAAP FINANCIAL MEASURES
Certain financial measures used in this Press Release are not defined by U.S. generally accepted accounting principles ("GAAP") and as such are considered non-GAAP financial measures. We provide these measures to enhance the user’s overall understanding of Gartner’s current financial performance and Gartner’s prospects for the future. Investors are cautioned that these non-GAAP financial measures may not be defined in the same manner by other companies and, as a result, may not be comparable to other similarly titled measures used by other companies. Also, these non-GAAP financial measures should not be construed as alternatives, or superior, to other measures determined in accordance with GAAP. The non-GAAP financial measures used in this Press Release are defined as follows: Adjusted EBITDA: Represents GAAP net income (loss) adjusted for: (i) interest expense, net; (ii) tax provision (benefit); (iii) other operating expense/income, net; (iv) stock-based compensation expense; (v) depreciation, amortization, and accretion; (vi) the amortization of non-cash fair value adjustments on pre-acquisition deferred revenues, as applicable; (vii) acquisition and integration charges and certain other non-recurring items; (viii) EBITDA from pre-acquisition periods, as applicable; (ix) gain/loss on divestitures, as applicable; and (x) EBITDA from divested operations, as applicable. We believe Adjusted EBITDA is an important measure of our recurring operations as it excludes items not representative of our core operating results. Gartner is unable to estimate the expected first quarter 2020 net income from these cancelled or postponed conferences.
Source: Gartner, Inc.
GVP, Investor Relations, Gartner
Director, Investor Relations, Gartner