Fitch Ratings affirmed Gartner's Long-Term Issuer Default Rating (IDR) at 'BBB' with a Stable Outlook on October 11, 2024. The rating also affirmed Gartner's senior unsecured revolver and notes at 'BBB'. This affirmation is supported by Gartner's recurring revenue base and strong wallet retention, which provide stability and visibility for near-term revenue growth.
Fitch noted that Gartner's subscription-based model is credit-positive, with 90% of Research revenue being recurring. The company maintains high renewal rates, with over 70% of all contracts being multiyear, resulting in strong client retention of approximately 85% and wallet retention exceeding 100%.
The rating agency projects Gartner's EBITDA margins to remain in the 23%-24% range for the next several years, a level that is materially above 2021's performance. This is expected to lead to strong free cash flow generation, providing the company with flexibility in its capital allocation strategy, including share repurchases.
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