高德納諮詢公司 (IT) 2011 Q3 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to the Gartner conference call for the third quarter of 2011.

A replay of this call will be available through December 2, 2011.

The replay can be accessed by dialing 888-286-8010 for domestic calls and 617-801-6888 for international calls, and by entering the pass code 44261278.

This call is being simultaneously webcast and will be archived on Gartner's website at www.gartner.com for approximately 90 days.

I will now turn the conference over to Brian Shipman, Gartner's Vice President of Investor Relations for opening remarks and trucks.

Please go ahead, sir.

Thank you, and good morning, everyone.

Welcome to Gartner's third quarter 2011 earnings conference call.

With me today is our Chief Executive Officer, Gene Hall, and our Chief Financial Officer, Chris Lafond.

This call will begin with a discussion of the quarterly financial results disclosed in today's press release, as well as an update of our increased revenue guidance, followed by an opportunity for you to ask questions.

I'd like to remind everyone that the press release is available on our website, and that web address is www.gartner.com.

Before we begin we need to reminds you that certain statements made on this call may constitute forward-looking statements.

Forward-looking statements can vary materially from actual results and are subject to a number of risks and uncertainties, including those contained in the Company's 2010 annual report on Form 10-K and quarter reports on Form 10-Q, as well as in other filings with the SEC.

I would encourage all of you to review the risk factors listed in these documents.

The Company undertakes no obligation to update any of its forward-looking statements.

With that, I would like to hand the call over to Gartner's Chief Executive Officer, Gene Hall.

Gene?

Good morning, everyone.

Thanks for joining us.

Our third quarter results for 2011 continue the growth trend that we delivered through the successful and consistent execution of our long term strategy.

As you've heard me say before, the fundamentals for our strategy have been and remain to create extraordinary research insight, to build strong sales capability, to deliver high value differentiated offerings, to provide world class service, and to continuously improve our operational effectiveness.

This strategy has been successful across our lines of business and across all geographies.

In the third quarter of 2011, Research contract value continued to demonstrate strong growth.

We achieved 15% contract value growth, excluding the impact of foreign exchange, and ended the quarter at the highest level ever reported in Gartner's history.

The 15% year over year increase in research contract value was driven both -- driven by both strong third quarter new business, as well as strong client and wallet retention.

New business was the highest of any third quarter in Gartner's history, and wallet retention was 100% for the second quarter in a row.

Our Events business remains strong.

In the third quarter revenue growth of 12%, excluding the impact of foreign exchange, was above our long term target of 5% to 10%.

For our events held this quarter, attendees were up 12% and exhibitors were up 14%.

We also added two new events and continued to optimize our event portfolio for maximum value.

In Consulting, the solid pipeline we told you about on last quarter's call drove revenue growth of 4%, excluding the impact of foreign exchange, a notable improvement from the first results we reported previously.

The overall momentum in our business has been driven by the success of our initiatives to sales force productivity, draw up higher client retention, grow share of wallet among existing customers, and penetrate net new opportunities.

Information technology continues to grow in importance for virtually every institution in the world.

ITand supply chain management remain the best way for companies to improve in any macro economic environment.

These areas are and will continue to be complex and continuously evolving.

IT and supply chain professionals need expert assistance and insight to help them make the critical business decisions they face virtually every day.

Gartner is the best and most cost effective resource they can turn to for that health and often makes a difference between success and failure in any economic environment.

I just returned from our largest symposium event in Orlando, Florida.

This event had our highest attendance ever, with more that 8,000 attendees, including more than 2,000 CIOs.

I had the opportunity to meet with a number of clients, and they were there because IT is central to the key initiatives and strategies in their institutions, and they know that Gartner is the best source for help to ensure these critical initiatives are successful.

While at Orlando symposium I also had an opportunity to interact with many of our salespeople, and they are as energized and enthusiastic as I've ever seen.

I've never been more confident or excited our prospects for continued accelerated growth as I am today.

We have a vast untapped market opportunity for our services, which we estimate at over $45 billion for Research alone.

There are hundreds of thousands of IT and supply chain practitioners who could potentially be Gartner clients, but who have never been educated on the value we can provide.

The Gartner brand is in a class by itself.

Our products and services lead the market, and we have a highly compelling business model.

Gartner is the strongest company it's ever been.

With that, I'll turn it over to Chris for additional details on our results and financial outlook.

Thanks, Gene, and good morning, everyone.

We ended the third quarter with double digit growth in revenue, earnings and cash flow.

Our results again demonstrate the continued successful execution of our strategy, our ability to consistently deliver on the long term financial objectives we communicated over the past several years, and our overall importance to the strategic IT initiatives of our clients.

I'll start today with a review of our business segment results for the third quarter and finish with a discussion of our outlook for the remainder of 2011.

Starting with Research.

Third quarter Research revenue was up 19% as reported, and 15% excluding impact of foreign exchange.

The growth margin in this segment increased over 2 points year over year to 68%, as our strong execution continues to deliver on the operating leverage in the business.

All of our key Research business metrics remained very strong in the third quarter.

Contract value grew at a record level of $1.036 billion, a growth of 15% year over year excluding the impact of foreign exchange.

New business again increased year over year, continuing the trend we've seen since late 2009.

The new business mix was balanced between sales to new clients and sales of additional services and upgrades to existing clients.

While our contract value growth continues to benefit from our discipline of annual price increases and no discounting, approximately 75% of our contract value growth came from volume versus price.

This volume growth reflects our success in continuing to grow the business by penetrating our vast market opportunity with both new and existing clients.

As a result we ended the quarter with 11,770 client organizations, up 6% year over year.

This year over year growth is particularly notable given the uncertain economic environment.

And we expect to increase our price list by 3% to 6% per year on an annual basis.

Our client retention rate ended the quarter at 82%, consistent with last year's third quarter, and we maintained client retention near record high for five quarters in a row.

In addition to retaining more of our research clients, the clients we retained increased their spending.

Wallet retention increased 5 percentage points year over year to 100 percent.

Wallet retention is higher than client retention due to a combination of increased spending by retained clients and the fact that we retained a higher percentage of our larger clients.

As we discussed in the past, our retention metrics are reported on a four quarter rolling basis in order to eliminate any seasonality.

In summary, our Research segment continued its strong performance in the third quarter.

We grew our contract value by $131 million on a year over year basis, we continued to see high levels of demand for clients, and we expect continued acceleration in revenue and contract value growth over time.

We remain confident in our ability to deliver 15% to 20% annual revenue growth in this business over the long term.

Turning now to Events.

Events revenue increased 18% year over year on a reported basis, and 12% excluding impact of foreign exchange.

During the third quarter, we held 16 events with 6,676 attendees, compared to 5,954 attendees and 14 events held in the third quarter of 2010.

Total attendees at our events during Q3 were up 12% year over year, and exhibitors up 14%.

The Q3 contribution margin for events is seasonally lower in Q1 than Q3, given that both quarters are light and have fewer events scheduled.

In addition, during Q3 we launched two new events.

As we mentioned in the past, first time he vents have significantly lower margins as we build for the future.

We built our income of 2011 launches into our full year expectations in guidance at the start of the year.

During a seasonally light events quarter like Q3, new launches can have a material impact on the Events segment contribution margin.

In addition, two of our legacy summit events that have yet to be refreshed had solid year over year attendee growth but lower exhibitor participation.

As Gene mentioned, we recently held our largest symposium event in Orlando, Florida.

For those of you who attended this event, you saw first hand the strong attendance at this must-attend event.

This was our largest symposium ever, with over 8,000 attendees.

Our second largest symposium starts in a few days in Barcelona, Spain, and we also expect record attendance at this event.

Our remaining symposium events look equally strong, as do our fourth quarter summit events, including our largest summit, Data Centre, scheduled for early December.

As a result we increased our full year guidance for Events business segment.

Moving on to Consulting.

As we told you last quarter, our pipeline heading into the third quarter was solid and shoulddrive improved results for the consulting business as the year progressed.

That did occur, and our Consulting revenue grew over 8%, or 4% excluding impact of foreign exchange.

Backlog, the key leading indicator of future revenue growth for our Consulting business, ended the quarter at $93 million, which represents a healthy four months of backlog.

Additionally, our pipeline looks equally solid again as we start the fourth quarter.

Billable head count of 482 was down slightly from the second quarter and up 6% for the third quarter of 2010.

This reflects our continued investment in transitioning to a managing partner model for this business.

Third quarter utilization was 61%, and revenue for billable head count remained above $400,000 per year, ending the quarter at 404,000.

Moving to the income statement.

During the third quarter, our total gross contribution margin increased by more than one percentage point year over year to 58.7%.

This increase was due primarily to the successful execution of our strategy to capitalize in the high incremental margins and operating leverage inherent in our Research business.

SG&A increased by $23 million year over year during the third quarter.

The increase was primarily attributable to the growth in our sales force as well as the impact of foreign exchange.

As of September 30, we have 1,215 [quarter] bearing sales associates, as compared to 1,027 the year earlier.

Since December 31, we've added 166 salespeople to remain on track to achieve our target of growing sales force by 15% to 20% for the full year.

Finally, G&A is flat year over year as a percent of revenue in Q3 down for the first nine months of the year, as we continued to tightly control G&A costs across the entire Company.

Moving on to earnings.

We delivered another strong quarter with solid earnings growth.

Normalized EBITDA was $62.4 million, up 22% year over year, and diluted income per share was $0.31, up 41% year over year.

Our normalized EBITDA margin increased to 18% from 17.3%, or 70 basis points.

This trends continues to reflect our commitment to improving margins while investing in the growth of our business.

As expected, our Q3 2011 GAAP diluted income per share includes minimal noncash amortization costs associated with AMR and [Burke].

Turning to cash.

Our strong performance in the quarter translated into an increase cash flow, mainly driven by cash from operation, which increased by 75% to $112 million.

For the full year 2011 and over the long term, we continue to expect to generate free cash flow substantially greater than our net income, given our tight cash management and the negative working capital characteristics of our Research business.

During the third quarter, we utilized our cash to return capital to shareholders through our share repurchase program.

We repurchased over 1.5 million shares at a total cost of $53.4 million.

We ended the quarter with a strong balance sheet and cash position and net debt of $53 million.

Our current credit facility runs through December 2015 and at this time provides us with over $360 million of remaining borrowing capacity.

We have ample cash flow and liquidity to continue to grow our business and execute initiatives that drive increased in shareholder value.

We continue to look for attractive acquisition opportunities and potential use of cash.

In absence of appropriate acquisition opportunities, we believe that repurchasing our shares remains compelling use of our capital ,and we have over $360 million remaining under our Board authorization.

Now let me turn to our business outlook for the remainder of 2011.

We have had a strong year so far for 2011, and we well positioned for the double digit full year revenue, earnings and cash flow growth we expected as the year began.

The details of our guidance are included in the earnings release issued this morning, but let me take a minute to highlight some of the changes.

Overall, on a consolidated basis we are raising the low end of our previous issued revenue guidance by $5 million, and we are maintaining the high end of our previous issued revenue guidance at the same level.

With respect to our Research segment, we now expect revenues between $1 billion and $1.015 billion for the year.

We're raising the low end of our range by $5 million and expect this segment to grow revenues between 16% and 17% for the full year.

With respect to Consulting, we are now looking at revenues of between $305 million and $320 million.

We modestly reduced the bottom and top end of our previous guidance range and now expect this segment will grow between 1% and 6% in 2011.

Finally, with regard to our Events business, we now expect revenues of between $140 million and $150 million, an increase of $5 million to both low and high ends of our previous guidance range.

From a seasonality perspective, I would remind you that the fourth quarter is the largest quarter of the year for the Events business and will make up roughly 50% of the full year revenues.

There are no other changes to our previously issued guidance.

So to summarize, all three of our business segments delivered solid year over year revenue growth.

Gartner's Research business experienced another strong quarter.

We grew CV by 15% and generated double-digit growth in Research revenue.

Our Events business continued to show double-digit increases revenue after a very strong 2010.

Our Consulting business delivered year over year revenue growth during Q3 and has a solid backlog going into Q4.

We are deploying our substantial cash flow to invest in our businesses and to return capital to our shareholders through our share repurchase program.

And finally, we are currently and remain well positioned for double-digit revenue, earnings and contract value growth, increasing returns to our shareholders for the full year and over the long term.

With that, we are ready to open the call to your questions.

Operator?

Thank you.

(Operator Instructions).

Your first question comes from the line of Peter Appert with Piper Jaffray.

Please proceed.

Thanks.

Good morning.

So, Gene, the Consulting backlog, down a little bit on a year over year basis.

Do you view that as an indication of flow through from the weaker macro environment?And then just more broadly on that question, what are you hearing back from the sales force in terms of what the customers are telling you about spending plans going forward?

Hey, Peter.

Our Consulting backlog, we aim to be in the three to four month revenues range, and that's exactly where we are with it now.

If you have it less than three months, that's a little tight.

If you have it more than four months then what happens is clients get a little anxious because when they commission work they want to go ahead and get started on it.

So we're kind of right in the sweet spot of where we want with that business.

And if you look at our business, we're seeing really robust growth in Research, really robust growth in Events, becausethat's where we're focusing -- where wefocus most -- the majority of our efforts.

So I don't think -- Consultant is exactly where we want it to be.

It doesn't really reflect the macro economic situation at all.

How about just in terms of -- for the overall Research business, things like sales cycle, average order size?

Anything that might indicate tone of business -- better, worse -- in the context of the macro environment?

The selling cycle remains about the same.

There's no measurable change.

We're seeing things looking very solid, very good, and no change on that.

Got it.

And then last thing, sales productivity, you accelerated the sales force growth in the current quarter.

Just talk a little bit about the productivity experienced in terms of new sales associates.

Is it similar to what you've been seeing, et cetera?

The -- if you look -- we track our sales productivity, as you know, very closely, and one of the things we're very focused on is sales productivity for our new people.

If we look at sales productivity for our new hires over the last period of time, that productivity has been increasing, and it's been because of the focus on it.

And so when we feel very comfortable accelerating the amount of our new hires because we have see this increasing productivity of the new hires that we get.

Great.

Thanks, Gene.

Your next question comes from the line of Dave Lewis with JPMorgan.

Please proceed.

Good morning.

The first question is, Gene, you touched on supply chain in your open commentary, and I was just hoping you could give us an update.

It might be more anecdotal on the AMR business.

And strategically, your latest thoughts on that building out over time?

So the AMR business -- well, we now call it supply chain.

The supply chain business is doing very well.

We had a supply chain conference this year in Phoenix, andit was literally sold out it was so busy.

And in fact, we're looking for a different venue in the future perhaps because of the growth we expect there.

We also held a conference in Europe which was equally successful.

AMR had not had conferences in Europe.

We had one last year, and then we had one this year.

The one this year had huge growth over the previous year and was very successful there.

We've expanded the number of salespeople selling supply chain, and we again are seeing very good bookings in that business.

So we're very happy with the supply chain business.

Thanks, Gene.

That's great.

And then just if you could just touch on Europe, if you're seeing any -- regionally it sounds like from the information you provided on the Barcelona conference, it doesn't sound like there's any softness there.

But regionally is there any outperformance in one region or the other?

So as Chris said, in terms of -- I'll start with the events since you mentioned that.

Our Barcelona conference, we're seeing as strong as the Orlando conference.

And by the way, we're just -- that one starts on Sunday.

So we have a pretty good handle on what it's going to be like.

If you look at the other ones that we have rolling out in the other geographies, they look very strong as well.

In terms of our Research business in Europe and our Consulting business in Europe, I'd say that it's pretty much the same as everywhere else.

You see growth slightly faster in Asia, slightly slower in Europe, but not any -- not to any large degree.

Again -- it's Chris -- just to give a little more color there on the growth, I think if you look across whether it's geographic, whether it's industry, whether it's client sizes, we still continue to deliver very balanced results actually in all three of the segments.

So no matter how you look at our performance, whether it's geographically or otherwise, really good solid growth coming from pretty much everywhere across the business.

That's great.

Thanks, guys.

I'll hop off.

Your next question comes from the line of William Bird with Lazard.

Please proceed.

Yes, Gene, I was wondering if you could talk a little bit about what you heard from CIOs at symposium?And second, your full year guidance range seems to kind of imply fairly wide range of growth for Q4.

I'm just wondering if you're trying to communicate uncertainty, or has there been any real change in the tone of business?

Maybe you could comment on it.

Thank you.

Yes, greatquestion about symposium.

It was actually very exciting to be down there with so many CIOs.

And there was a really common theme, which is IT is central to everything they do in their institutions and in their business.

And that they're very cognizant of that.

And it's traditional things like implementing CRM systems, consolidation, implementing virtualization.

But also there's a whole new set of things on things like mobile computing and how does cloud impact their business and things like that.

So we're seeing a tremendous amount of interest and -- in those issues, and then also looking to Gartner to help with those issues.

And it was really fun seeing all the excitement and enthusiasm that was down there.

And I'll turn it over to Chris for the second question.

Hey, Bill.

Thanks for the question.

Just in terms of our guidance and outlooks, so a couple things that I'll share.

First, we've not made any assumptions in our guidance for foreign exchange movement.

So that's the first thing you should understand, which is there has been a lot of variability there, but we essentially have assumed that foreign exchange will stay where it is today.

So if that moves, that could change ultimately where we're at.

So we're not in the business of trying to predict foreign exchange.

If you go through each of the segments in terms of our revenue guidance, the Research revenue is pretty tight; $15 million on a $1 billion revenue number, so we feel pretty confident, as you can imagine.

Given it's a subscription business, we pretty much know where that will come in, give or take a little bit.

Consulting, at the $305 million to $320 million range.

As we talked about in the past, we have a contract optimization business that does have some variability and is a little less predictable in terms of forward pipeline, and those deals can come in relatively quickly, and that's why we have a little bit of a wide range there.

And again, it's still relatively small given it's a $300 million consulting business with a $15 million range.

And then finally, events we increased -- we have great visibility into what we're seeing now at symposium.

Good visibility in the forward-looking bookings for all of the events happening in Q4, so we feel pretty confident there.

So what I would tell you is in no way does our guidance range mean to imply that there's any uncertainty or anything else in our business.

We're very confident where we are and very comfortable with the ranges that we've established.

Thanks.

And, Gene, just a follow-up on productivity.

It looked like your dollar growth in contract value per salesperson just dependent a little bit in the third quarter.

I would think there's some dilutive effect from on-boarding.

I was wondering if you could comment on productivity from Q3.

Great question.

So the productivity in Q3, as you mentioned, we had a richer mix of new people who have less productivity than the people who have been here over a longer period of time, and obviously that that will have an impact on productivity.

But, again, as we said earlier, we're actually -- while the mix was richer, the actual productivity we're seeing out of new people has been increasing over time.

Great.

Thank you.

Your next question comes from the line of Manav Patnaik with Barclays Capital.

Please proceed

Good morning, gentlemen.

On the deferred revenue -- I mean I guess on the contract value growth, rather, I mean given what you already see in the fourth quarter, should we expect the growth rates to accelerate like they did last quarter, or how should we try to model that?

Well, when you look at the full-year revenue guidance, essentially you can back into what we expect Q4 to be.

It will be pretty consistent in terms of growth rates that we've seen in the early part of the year.

Obviously, the ending contract values as we get through Q4 will be what will drive 2012, and that we'll talk about as we get through the fourth quarter and into the first quarter when we do our earnings call there.

So I would expect to see Research continue to be strong.

We've seen good solid performance all year.

It's been very consistent in delivering those results, and we expect Research to end the year between 16% and 17% revenue growth.

Got it.

And based on your commentary and just trying to get an early read on 2012.

it seems there's no reason to believe, at least now, that the growth or the contract value growth or the continued increase in backlog is going to show any signs of slowdown.

Is that fair?

It's a little too early to be talking about 2012.

We obviously need to finish out 2011 first.

But it's our objective, as we've continued to talk about and continued to remain confident in, of growing Research at 15% to 20%, growing Consulting 3% to 8% and Events 5% to 10%, and obviously we've been doing much better than that on the Events business.

All of our metrics continue to be in those ranges, and so at this point we feel very comfortable that our business continues to perform in those ranges today and into the future.

Got it.

And one final one, just on -- again, just I guess the variance on the EPS guidance range.

Assuming the FX doesn't really move from where it is today, based on your model are we on the higher end of that range?

We feel very confident in that range.

Okay.

We generally don't provide color around where we are in the range, so we feel very confident that we're going to be in that range that we've given.

Okay.

Fair enough.

Thanks, guys.

Your next question comes from the line of Robert Riggs with William Blair.

Please proceed.

Good morning.

Thanks for taking my question.

Just in the Consulting business, are there any notable trends in the types of engagements the clients are looking for; maybe versus -- cost savings versus growth strategy going forward?

Anything to note there?

Yes, it's Gene.

I don't think so.

I think basically the mix of business -- the mix of the kind of engagements we're doing has been pretty constant over time,other than we purposely change it had.

So we have some areas we think might be a little higher growth and might focus in on those areas, butit's on the margin as opposed to any major change.

Okay.

And then, Chris, you touched on the switch to the -- or the continued transition to more of a managing partner approach in Consulting.

Kind of how far along are we with that process there?

We are probably kind of three quarters -- two-thirds, three quarters of the way through.

We've been working on that over the past few years.

And you say know, what we've been trying to do there is make that investment while also managing improvements in the overall productivity and profitability of the Consulting business, which I think we've done a good job of over the last few years.

So I think we'll still be on that path for a couple more years as we continue to ramp up and get the full managing partner capacity.

Great.

Thank you.

Your next question comes from the line of Bill Sutherland with Northland Capital.

Please proceed.

Thanks.

Thanks for taking the questions.

Most have been asked actually, but I was wondering about head count plans at this point in Consulting?

Hi, Bill.

Good to hear you again.

The -- from a Consulting perspective as we talked about over time, what our objective there is to hire a capacity to deliver as we see the pipeline and backlog grow.

And so what you saw early part of the year was our backlog was flat to slightly down, and so our head count has been flat to slightly down in the last couple of quarters.

As that continues to build and grow, we will add capacity appropriately.

We still believe that the utilization of our consultants has some room for improvement, so we can drive incremental revenue growth without adding capacity in some areas.

But as we grow over time, if we expect the Consulting business to grow 3% to 8%, you will expect over time for the head count growth to be in that range as we continue to move ahead.

And so the utilization number for the quarter, your -- is there a -- I know it's a tricky quarter just in terms of time off and so forth.

Any other thoughts on that number for the quarter?

Yes,I mean a couple things.

Third quarter is seasonally lower because of the summer holiday period.

So if you look back in time, it is a seasonally lower utilization figure for Consulting.

We have been higher in the past and I would say our long term target continues to be 70%, so we're continuing to drive efforts to get the business to be at that level consistently over time.

Okay.

And then last one, the three groups within Consulting, are they pretty much tracking kind of in the same course?

I would say generally continuing to track consistently across all three of those segments.

Okay.

Thanks, guys.

Thanks, Bill.

Your next question comes from the line of Kelly Flynn with Credit Suisse.

Please proceed.

Thanks, guys.

A couple questions.

First question, it relates to a couple other questions people have asked, butI just want to drill down further into what you're saying about near term contract value expectations for Research.

I wanted to look at it this way.

Can you talk about if new sales renewals or any other indicators deteriorated at all as Q3 progressed, and then what we saw in October?

And just -- I know you can't really predict the future, but whether or not so far what we've seen in the fourth quarter is tracking kind of in line with mid-teens contract value growth?Thank you

Hi, Kelly.

Thanks.

So a couple things would I say there.

First, overall from a renewal perspective, our renewals are pretty balanced throughout the whole year.

So every single quarter we're seeing a pretty good indication.

So give or take a few points around 25%, that's how much our book of business comes up for renewal.

What I would say, as you look at our retention rates, they've held very steady.

So from a retention point of view we're seeing no issues or no changes in what we've seen earlier in the year, and they've been pretty consistent for quite some time.

From a new business perspective, we've had record new business again in Q3.

It's the highest Q3 we've ever had.

So we still are seeing really good demand from clients, still seeing really good new business bookings.

We've continued to add to the number of client organizations, so penetrating new organization, and because of our wallet retention number, increasing at again, [continuing to] penetrate the existing client base.

So no matter how we kind of slice and dice and look at -- and as I said earlier, if you look at our CV growth geographically, industry-wise, client size, all of those are up, so we're seeing very broad based performance.

So at this point, there's nothing that we're seeing that says we can't continue on the delivery we've seen this year and keep Research revenue in our long term expectation range of 15% to 20%.

Okay.

So -- but for October specifically, I guess, versus the third quarter, does what you just said apply to October, as wells September?

October, when you look at -- in between quarters, the early part of the quarter tends to be relatively small.

We've seen nothing.

We don't go into a lot of details in quarter.

But we haven't seen anything that we've seen so far, and in addition to the comments Gene made, we're seeing great demand in our Events business, and we're seeing great demand in Consulting, still seeing the continued performance in Research.

So nothing we're seeing in the business at this point suggests anything.

Okay.

Great.

And then could I ask a second question related to the Orlando symposium?

I don't know if you can get into this much detail, but you mentioned record attendees, and I think exhibitors, as well.

Can you talk about the growth for each of those for that symposium year over year?

We don't have that actually handy.

If there's another question, Kelly, you have I will try to do that while you're --

No.

That's okay.

We can take it off line, or if you have it later in the call let me know, but I'll leave it at that.

Thank you.

Your next question comes from the line of Daniel Leben with Robert W.

Baird.

Please proceed.

Thank you.

Good morning.

We talked about AMR earlier.

Could you talk about Burton and the kind of the growth rates you're seeing there, as well the aggregate contribution of those two products to the overall contract value growth?

So -- it's Gene.

We're seeing very strong growth with the what's now IT1, and the aggregate -- that's just been a complete home run.

As you can imagine, that's a product where all of our IT salespeople can sell it.

It's applicable to every one of our IT clients.

And so it's having extremely -- I'd say very strong growth.

And if you look at the contributions together, both are doing great, and we're very happy with both of the results of those.

Okay.

And then, Gene, you said you had a lot of conversations with CIOs at symposium.

Can you talk about the tone you're hearing from them as they're thinking about their 2012 budget planning process?

Basically, there's a full range, and this is true kind of in any economic times.

There are some people that are focused on growth oriented activities, and there are some groups that are more cost reduction, like data center consolidation and stuff like that, and then virtually everyone is asking questions about these disruptive technologies like things like do I need an iPad app?

How does mobile effect me?

How is consumer amortization of IT affecting?

How does social computing affect me?

Cloud?

So these -- all the traditional stuff that's on people's mind is still I'd say more important than it's ever been.

And then you layer on top of that all these what I call disruptive technologies that's on their mind, and in fact I think that's one of the things that's really driving strong demand at symposium and throughout our business, the combination of traditional drivers with the layering on top of it of all these new technologies that have opportunities and, frankly, risks for these companies too.

Great.

And then last one for me, the Consulting utilization down at 61%.

Struggling a little bit there.

What does that -- does that number change in terms of targets for all the historicals where we've been -- we've seen utilization in excess of 70% with the new managing partner model?

How should we think about a target for that one going forward?

We have not changed our long term expectations.

We still absolutely expect and believe we can have that business in the 70% range.

So what we're seeing in the short term has not caused us any reason to think differently about that business or differently about utilization.

Do you need to do something on the head count nearer term to start to get that number back, or is it simply by driving the top line you're going to get there?

We don't -- as I said, we manage our capacity to the backlog.

But right now, they -- our expectation is that we'll continue to see the kind of demand we saw in the Q3.

So if you look back at the first couple quarters, we commented earlier in the year and again that the first couple of quarters of the year were a little weaker than we expected.

Q3 was a much stronger quarter after a strong end of Q2 bookings-wise, and we expect that to continue and therefore ultimately drive utilization back to levels that we would expect.

Great.

Thank you.

(Operator Instructions).

Your next question comes from the line of Brian Karimzad with Goldman Sachs.

Please proceed.

Hi.

I guess the first one would be at your symposium in Orlando you guys did share some preliminary results for your CIO survey for budgets next year.

I wonder if you could share that with us and put in some context what that survey said last year?

And then I have a follow-up question.

Yes, wedon't actually have that handy so we'll have to get that to you separately.

Okay, I can [delve too].

That's all right.

I mean, generally it was pointed to low single digit growth in budgets for next year, but looking at historic numbers am I correct in saying the last couple of years, that survey has also pointed to low single digit growth?

Yes.

And you've grown in spite of that.

I guess my follow-up is what do you need to see to be confident that you can achieve the mid to high end of that 15% to 20% Research revenue growth next year?

What are some indicators you need to see happen and some benchmarks for that.

Yes, Gene.

So the key thing in driving it -- there are two key components in driving it.

The most important one is our sales force productivity.

And so we are continuing to drive sales force productivity.

It's been increasing over time.

As I mentioned, we are focused on existing salespeople and getting their productivity, as well as the new salespeople.

Ranges from things like training, the tools we give them, making sure we hire the right profile, et cetera.

And so all of those things are driving sales productivity, and that's the single biggest driver.

And then the second one is obviously adding capacity over time, which is we're planning to add between 15% and 20% more salespeople over time.

And that helps with the long term, but the thing that really drives is, is what we get with productivity, which is why we're so focused on that.

Okay.

And one of your competitors had some issues with productivity.

Did you get a sense that you were able to take some share in the quarter as a result of that?

Well, as I mentioned we're very happy with our productivity, and as I said, the productivity's good, it's going the right direction and that's what we like to see.

Okay.

Thank you.

(Operator Instructions).

With no further question in the queue, I would now like to turn the call over to Mr.

Hall for any closing remarks.

Please goad, sir.

Great, and beforeGene finishes up, I just wanted to follow up on Kelly's question on the symposium.

Kelly, we're seeing good double-digit growth in both attendees and exhibitors at our Orlando symposium.

So in excess of 10% on the attendee side, and even faster than that on the exhibitor side.

So I don't have all the final, final calculations, but it's in that range, and it was a very strong events.

Gene?

This is Gene.

I just want to thank everyone for joining us today.

We look forward to talking again next quarter.

Ladies and gentlemen, that concludes today's conference.

Thank you for your participation.

You may now disconnect.

Have a great day.