Income Taxes

6 Months Ended

Jun. 30, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The provision for income taxes was $69.7 million and $66.1 million for the three months ended June 30, 2024 and 2023, respectively. The effective income tax rate was 23.3% and 25.0% for the three months ended June 30, 2024 and 2023, respectively. The effective income tax rate is lower in the current year primarily due to larger benefit of research and development tax credits.

The provision for income taxes was $118.8 million and $151.6 million for the six months ended June 30, 2024 and 2023, respectively. The effective income tax rate was 21.3% and 23.5% for the six months ended June 30, 2024 and 2023, respectively. The effective income tax rate was higher in the prior year primarily due to the impact of the sale of the TalentNeuron business.

The Company had gross unrecognized tax benefits of $157.6 million on June 30, 2024 and $148.4 million on December 31, 2023. It is reasonably possible that gross unrecognized tax benefits will decrease by approximately $9.3 million within the next twelve months due to the anticipated closure of audits and the expiration of certain statutes of limitation.

In January 2024, the Company completed an intercompany transfer of certain intellectual property (“IP”). The tax impact of the transfer did not have a significant impact on our effective tax rate. Prior to the sale, the Company had a $103.1 million deferred

tax asset for tax basis in the related IP and a full valuation allowance due to no expected local tax benefit of the asset. As a result of the IP transfer, the deferred tax asset and related valuation allowance were written off with no impact to tax expense. The Company’s intellectual property footprint continues to evolve and may result in tax rate volatility in the future.

The Organization for Economic Co-operation and Development (“the OECD”) has issued various tax proposals including a two-pillar approach to global taxation (BEPS 2.0/ Pillar Two), focusing on global profit allocation and a 15% global corporate minimum tax rate. Several countries in which Gartner does business have proposed or enacted new laws to align with OECD Pillar Two proposals. The minimum tax is treated as a current cost beginning in 2024 and does not have a significant impact on the Company's effective tax rate for the current period. Significant details around the provisions are still uncertain as the OECD and participating countries continue to work on defining the underlying rules and administrative procedures. The Company will continue to monitor and reflect the impact of such legislative changes in future financial statements as appropriate.