Gartner Shares Plunge Over 27% Despite Beating Q2 Estimates, Raising Buyback Authorization

Gartner Inc. IT shares are trading lower Tuesday despite the company reporting better-than-expected second-quarter 2025 results.

Check IT share price action here.

What To Know: The sharp decline comes as investors react to slowing contract value growth and broader concerns about future demand, overshadowing the company's strong headline numbers and expanded share repurchase plan.

For the quarter, Gartner posted revenue of $1.7 billion, up 5.7% year-over-year, or 4.6% on a foreign exchange-neutral basis. Net income came in at $241 million, and adjusted EBITDA rose 6.6% to $443 million.

Diluted earnings per share were $3.11, while adjusted EPS came in at $3.53, up nearly 10% from the prior year.

Free cash flow reached $347 million, and the company repurchased 700,000 shares for $274 million during the quarter. In July, Gartner's board increased its repurchase authorization by $700 million.

The company also announced the rollout of its new AI tool, AskGartner, which aims to improve the client experience by delivering faster access to its research and insights. CEO Gene Hall said the company is seeing strong momentum in its core metrics and expects continued value creation as the AI platform expands.

Still, investors appear to be focusing on the slowing pace of contract value growth, which increased just 4.9% year-over-year on a constant currency basis, a deceleration from previous quarters. Despite beating expectations across major financial metrics, the modest contract growth may be viewed as an early signal of weakening enterprise spending or demand for Gartner's services.

The market's reaction suggests that strong earnings alone aren't enough to offset concerns about future topline momentum. While the company is returning significant capital to shareholders and integrating new AI features, the steep selloff reflects heightened sensitivity to forward-looking indicators in the current market environment.

IT Price Action: Gartner shares were down 27.55% at $243.93 at publication on Tuesday, according to Benzinga Pro.

Read Next:

• Stocks Drop As Trump Tariffs Fuel Inflation, Palantir Hits $400 Billion Value: What’s Moving Market Tuesday?

Image Via Shutterstock.