Tag: Information Services Group

Tuesday, December 10, 2024

ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 700 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,300 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For additional information, visit www.ISG-One.com

Joe Gomes, CFA, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

NobleCon20. Information Services Group CEO Michael Connors and CFO Michael Sherrick presented at NobleCon20. Management highlighted the opportunity in AI, including ISG Tango, and driving recurring revenue. A rebroadcast is available at https://www.channelchek.com/videos/information-services-group-noblecon20-replay.

Growth in AI. The opportunity in AI for ISG is prevalent, as management noted that 55% of large enterprises are focused on developing an AI roadmap today. This focus translates into a roughly 3 times increase in projected enterprise AI spending through 2025. ISG has two services in AI Advisory and Research that companies can utilize for the application of AI and to be informed on the best use cases. In our view, ISG is well-equipped to handle increased demand through its services.

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Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Monday, November 11, 2024

ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 700 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,300 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For additional information, visit www.ISG-One.com

Joe Gomes, CFA, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

More Profitable. Topline performance at $61.3 million was lower sequentially, however, it was above management’s guidance of $60-$61 million and higher than our estimate of $61 million. Importantly, the quarter resulted in a record high utilization of 77%, leading towards a higher gross margin of 40.4% from 39.5% last quarter. The higher gross margin flowed through to higher adjusted EBITDA margin of 11.6% from 11.1% in the prior quarter.

Potential Growth in 2025. Management noted that the ISG Tango platform is continuing to see growth in its contract value, now at $5 billion compared to $4 billion last quarter, a 25% increase. Notably, the increase is an example of signs of increased demand in the U.S. and we believe the market will improve as the election uncertainty has passed and the macroeconomy continues to improve.

Get the Full Report

Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Research News and Market Data on III

• Reports third-quarter GAAP revenues of $61 million
• Reports third-quarter net income of $1.1 million, GAAP EPS of $0.02 and adjusted EPS of $0.05
• Reports third-quarter adjusted EBITDA of $7 million
• Reports strong cash flow from operations of $8.8 million
• Sells its automation unit on October 1, 2024, for $27 million in cash, with $7 million held in escrow
• Declares fourth-quarter dividend of $0.045 per share, payable December 20, 2024, to shareholders of record as of December 3, 2024
• Sets fourth-quarter guidance: revenues between $57 million and $58 million and adjusted EBITDA between $6.0 and $7.0 million

STAMFORD, Conn.–(BUSINESS WIRE)– Information Services Group (ISG) (Nasdaq: III ), a leading global technology research and advisory firm, today announced its financial results for the third quarter ended September 30, 2024.

“ISG closed the third quarter strong, achieving the top of our updated guidance, with strong operating cash flow in the quarter,” said Michael P. Connors, chairman and CEO. “As we look ahead to 2025, we see signs that client demand in the U.S. is on the rise, including $5 billion of contract value now flowing through ISG Tango™, our digital sourcing platform, up 25 percent sequentially from the second quarter.”

Divestiture of Automation Unit

On October 1, ISG sold its robotic process automation unit to UST, a leading digital transformation solutions company, for $27 million in an all-cash transaction. ISG received $20 million in cash at closing with the remaining $7 million held in escrow, $4 million of which is subject to meeting certain contractual conditions with clients within 90 days and the remaining amount subject to the divested automation unit meeting certain revenue objectives by the end of the first quarter of 2025.

Third-Quarter 2024 Results

Reported revenues for the third quarter were $61.3 million, down 15 percent from $71.8 million in the prior year’s third quarter. Reported revenues were $40.1 million in the Americas, down 5 percent; $16.2 million in Europe, down 27 percent; and $4.9 million in Asia Pacific, down 32 percent, all versus the prior year.

ISG reported third-quarter operating income of $4.3 million, compared with operating income of $6.2 million in the prior year. The firm’s reported third-quarter net income was $1.1 million, compared with net income of $3.2 million in the prior year. Income per fully diluted share was $0.02, compared with income per fully diluted share of $0.06 in the prior year.

Adjusted net income (a non-GAAP measure defined below under “Non-GAAP Financial Measures”) for the third quarter was $2.5 million, or $0.05 per share on a fully diluted basis, compared with adjusted net income of $5.7 million, or $0.11 per share on a fully diluted basis, in the prior year’s third quarter.

Third-quarter adjusted EBITDA (a non-GAAP measure defined below under “Non-GAAP Financial Measures”) was $7.1 million, down 34 percent from the prior-year third quarter. Adjusted EBITDA margin (a non-GAAP measure calculated by dividing adjusted EBITDA by reported revenues) was 11.6 percent, compared with 14.8 percent in the prior year.

Other Financial and Operating Highlights

ISG generated $8.8 million of cash from operations in the third quarter, compared with generating $3.2 million of cash in the third quarter last year. The firm’s cash balance totaled $9.7 million at September 30, 2024, down from $11.8 million at June 30, 2024. During the third quarter, ISG paid down $8.0 million of debt, paid dividends of $2.3 million and repurchased $0.8 million of shares. As of September 30, 2024, ISG had $66.2 million in debt outstanding, down from $79.2 million at the end of last year.

2024 Fourth-Quarter Revenue and Adjusted EBITDA Guidance

“For the fourth quarter, ISG is targeting revenues of between $57 million and $58 million and adjusted EBITDA of between $6.0 million and $7.0 million. We will continue to monitor the macroeconomic environment, including the impact of FX, inflation and other factors, and adjust our business plans accordingly,” said Connors.

Quarterly Dividend

The ISG Board of Directors declared a fourth-quarter dividend of $0.045 per share, payable on December 20, 2024, to shareholders of record as of December 3, 2024.

“ISG remains committed to a disciplined capital allocation strategy that includes reinvesting in our business, managing our debt, returning capital to shareholders in the form of dividends and share repurchases, and supplementing our organic growth with strategic acquisitions to drive long-term shareholder value,” Connors said.

Conference Call

ISG has scheduled a call for 9 a.m., U.S. Eastern Time, November 8, 2024, to discuss the firm’s third-quarter results. The call can be accessed by dialing +1 (800) 715-9871 , or, for international callers, by dialing +1 (646) 307-1963 . The access code is 8229408 . A recording of the conference call will be accessible on ISG’s investor relations page for approximately four weeks following the call.

Forward-Looking Statements

This communication contains “forward-looking statements” which represent the current expectations and beliefs of management of ISG concerning future events and their potential effects. Statements contained herein including words such as “anticipate,” “believe,” “contemplate,” “plan,” “estimate,” “target,” “expect,” “intend,” “will,” “continue,” “should,” “may,” and other similar expressions are “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not guarantees of future results and are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated. Those risks relate to inherent business, economic and competitive uncertainties and contingencies relating to the businesses of ISG and its subsidiaries, including without limitation: (1) the failure to secure new engagements or loss of important clients; (2) the ability to hire and retain enough qualified employees to support operations; (3) the ability to maintain or increase billing and utilization rates; (4) management of growth; (5) the success of expansion internationally; (6) competition; (7) the ability to move the product mix into higher margin businesses; (8) the effect of the divestiture of the automation unit on ISG’s relationships with its customers and suppliers and on its retained business generally; (9) general political and social conditions such as war, political unrest and terrorism; (10) healthcare and benefit cost management; (11) the ability to protect ISG and its subsidiaries’ intellectual property or data and the intellectual property or data of others; (12) currency fluctuations and exchange rate adjustments; (13) the ability to successfully consummate or integrate strategic acquisitions; (14) outbreaks of diseases, including coronavirus, or similar public health threats or fear of such an event; and (15) potential terminations of engagements, delays or reductions in scope by clients. Certain of these and other applicable risks, cautionary statements and factors that could cause actual results to differ from ISG’s forward-looking statements are included in ISG’s filings with the U.S. Securities and Exchange Commission. ISG undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events or circumstances.

Non-GAAP Financial Measures

ISG reports all financial information required in accordance with U.S. generally accepted accounting principles (GAAP). In this release, ISG has presented both GAAP financial results as well as non-GAAP information for the three and nine months ended September 30, 2024 and September 30, 2023. ISG believes that evaluating its ongoing operating results will be enhanced if it discloses certain non-GAAP information. These non-GAAP financial measures exclude non-cash and certain other special charges that many investors believe may obscure the user’s overall understanding of ISG’s current financial performance and the Company’s prospects for the future. ISG believes that these non-GAAP measures provide useful information to investors because they improve the comparability of the financial results between periods and provide for greater transparency of key measures used to evaluate the Company’s performance.

ISG provides adjusted EBITDA (defined as net income, plus interest, taxes, depreciation and amortization, foreign currency transaction gains/losses, non-cash stock compensation, interest accretion associated with contingent consideration, change in contingent consideration, acquisition-related costs, and severance, integration and other expense), adjusted net income (defined as net income, plus amortization of intangible assets, non-cash stock compensation, foreign currency transaction gains/losses, interest accretion associated with contingent consideration, change in contingent consideration, acquisition-related costs, write-off of deferred financing cost and severance, integration and other expense on a tax-adjusted basis), adjusted net income per diluted share, adjusted EBITDA margin, and selected financial data on a constant currency basis which are non-GAAP measures that the Company believes provide useful information to both management and investors by excluding certain expenses and financial implications of foreign currency translations, which management believes are not indicative of ISG’s core operations. These non-GAAP measures are used by ISG to evaluate the Company’s business strategies and management’s performance.

We evaluate our results of operations on both an as reported and a constant currency basis. The constant currency presentation, which is a non-GAAP financial measure, excludes the impact of year-over-year fluctuations in foreign currency exchange rates. We believe providing constant currency information provides valuable supplemental information regarding our results of operations, thereby facilitating period-to-period comparisons of our business performance, and is consistent with how management evaluates the Company’s performance. We calculate constant currency percentages by converting our current and prior periods’ local currency financial results using the same point in time exchange rates and then comparing the adjusted current and prior period results. This calculation may differ from similarly titled measures used by others and, accordingly, the constant currency presentation is not meant to be a substitution for recorded amounts presented in conformity with GAAP, nor should such amounts be considered in isolation.

Management believes this information facilitates comparison of underlying results over time. Non-GAAP financial measures, when presented, are reconciled to the most closely applicable GAAP measure. Non-GAAP measures are provided as additional information and should not be considered in isolation or as a substitute for results prepared in accordance with GAAP. A reconciliation of the forward-looking non-GAAP estimates contained herein to the corresponding GAAP measures is not being provided, due to the unreasonable efforts required to prepare it.

About ISG

ISG (Information Services Group) (Nasdaq: III ) is a leading global technology research and advisory firm. A trusted business partner to more than 900 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including AI, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs 1,600 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com.

Friday, November 08, 2024

ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 700 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,300 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For additional information, visit www.ISG-One.com

Joe Gomes, CFA, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Hitting the Top of Revised Guidance. ISG reported revenue and net income at the top end of the Company’s revised guidance and in-line with our estimates. Revenue for the quarter was $61.3 million, which while down 15% from last year, was slightly above our estimate of $61 million. Net income was $1.1 million, or EPS of $0.02, beating out our estimate of $0.2 million or flat EPS.

Rising Client Demand. Management noted that ISG Tango now includes over $5 billion of contract value, up from $4 billion in the previous earnings release. Management is seeing signs that client demand in the U.S. is on the rise, translating to higher spending. We believe that the rise in contract value offers a sign towards higher spending on projects.

Get the Full Report

Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Research News and Market Data on III

STAMFORD, Conn.–(BUSINESS WIRE)– Information Services Group (ISG) (Nasdaq: III ), a leading global technology research and advisory firm, said today it will release its third-quarter financial results on Thursday, November 7, 2024, at approximately 4:15 p.m., U.S. Eastern Time.

The firm will host a conference call with investors and industry analysts at 9 a.m., U.S. Eastern Time, the following day, Friday, November 8. Dial-in details are as follows:

• The dial-in number for U.S. participants is +1 (800) 715-9871 .
• International participants should call +1 (646) 307-1963 .
• The security code to access the call is 8229408 .

Participants are requested to dial in at least five minutes before the scheduled start time.

A recording of the conference call will be accessible on ISG’s investor relations page for approximately four weeks following the call.

About ISG

ISG (Information Services Group) (Nasdaq: III ) is a leading global technology research and advisory firm. A trusted business partner to more than 900 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including AI, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,600 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com.

Press Contact:
Will Thoretz
+1 203 517 3119
will.thoretz@isg-one.com

Investor Contact:
Michael Sherrick
+1 203 517 3104
michael.sherrick@isg-one.com

Source: Information Services Group, Inc.

Friday, October 04, 2024

ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 700 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,300 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For additional information, visit www.ISG-One.com

Joe Gomes, CFA, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Sale of a Unit. Wednesday, ISG announced the sale of its non-core automation unit to UST, a digital transformation solutions company, for $27 million. At closing, ISG received $20 million in cash with $4 million to be released over the next 90 days and $3 million to be released at the end of 1Q25. Proceeds will be used for reducing debt, re-investing in the business, and returning capital to shareholders. Automation contributed roughly $30 million of annual revenue, including $18 million of recurring revenue.

AI Business. With large enterprises’ increasing focus on AI, ISG is placing more emphasis in this area and we believe is poised to capitalize on future spending through its AI Advisory and Research segments. Early indications of growing demand are showing with ISG Tango’s total contract value rising at the end of the second quarter.

Get the Full Report

Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Research News and Market Data on III

Comprehensive approach to automating contract generation and negotiation wins patent protection

STAMFORD, Conn.–(BUSINESS WIRE)– Information Services Group ( ISG ) (Nasdaq: III ), a leading global technology research and advisory firm, today announced it has secured a U.S. patent for its proprietary AI-powered contracting technology.

The automated intelligent contracting solution is offered as part of the ISG GovernX ® vendor compliance and risk management platform to simplify contract generation, negotiation and management, including renewals of existing contracts.

ISG said the solution also has future application for ISG Tango ™, the firm’s groundbreaking sourcing platform launched earlier this year that digitizes all elements of ISG’s market-leading sourcing transactions business to better serve clients, improve transaction speed and efficiency, and allow ISG to expand into other market segments. It would be used initially, ISG said, to support the sourcing transaction needs of midmarket companies—a new market segment and growth area for ISG—and later for larger, more complex contracts as the AI model that powers the solution grows in capability and sophistication.

The newly awarded patent, #12,067,060, issued on August 21, 2024, covers a solution that uses AI to analyze and understand the preferences of all parties to a contract and suggest tailored terms for any contract scenario. It builds on U.S. patent #10,936,672, which was awarded to ISG in 2021 for a system that leverages machine learning and AI to generate documents based on historical contracts and data sets.

A third invention, currently patent pending, leverages machine learning and AI across the entire contract generation, pricing and negotiation process with a chatbot-like interaction for multiple parties involved in creating a contract.

“We can now offer our clients exclusive access to automation technology that can build tailored contracts, increase compliance and compress negotiation timeframes,” said Todd Dreger, partner and president, ISG GovernX. “We are delighted to have received patent recognition for our distinctive and important inventions of AI-powered, automated document generation capabilities.”

The patents include methods for training models on historical documents to understand and predict the best language to include in a new contract. This involves determining associations between different document sections and optimizing the document generation process.

Users can input their preferences, view ranked candidate documents, and interact with the system to refine the final document. The interface can emphasize selected sections and provide feedback based on a scoring mechanism. The system also facilitates automated negotiation by adjusting document sections in real-time based on the preferences and priorities of multiple parties, reducing the need for manual negotiation.

“Our AI-driven contract automation inventions will help our clients improve their business operations and the management of their supplier ecosystems while lowering operational costs,” Dreger said. “As the field of AI continues to evolve, we’re confident the technologies covered by these patents will drive meaningful value for our clients by meeting their needs for fast, accurate, compliant contracting.”

The patents bolster the market-leading ISG GovernX platform, which currently has more than $65 billion of annual contact value under management across more than 13,000 client contracts. GovernX automates the management of the entire contract lifecycle and provides a complete, customized view of the user’s contract and supplier ecosystem to improve supplier performance, decrease spend and reduce third-party risk.

For more information about ISG GovernX, visit this webpage .

About ISG

ISG (Information Services Group) (Nasdaq: III ) is a leading global technology research and advisory firm. A trusted business partner to more than 900 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including AI, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,600 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com .

Source: Information Services Group, Inc.

Research News and Market Data on III

• Reports second-quarter GAAP revenues of $64 million
• Reports second-quarter net income of $2.0 million, GAAP EPS of $0.04 and adjusted EPS of $0.08
• Reports second-quarter adjusted EBITDA of $7 million
• Generates $2.2 million of cash from operations
• Declares third-quarter dividend of $0.045 per share, payable October 4, 2024, to shareholders of record as of September 6, 2024
• Sets third-quarter guidance: revenues between $64 million and $66 million and adjusted EBITDA between $7.0 and $8.0 million

STAMFORD, Conn.–(BUSINESS WIRE)– Information Services Group ( ISG ) (Nasdaq: III ), a leading global technology research and advisory firm, today announced its financial results for the second quarter ended June 30, 2024.

“ISG delivered sequentially stronger results in the second quarter,” said Michael P. Connors, chairman and CEO. “Adjusted EBITDA was up more than 60 percent, utilization was up more than 800 basis points, and adjusted EBITDA margin was up 400 basis points, driven by an improved product and services mix, all as our revenue base stabilized versus the first quarter.

“Though clients continue to delay the start of new initiatives and extend their spending over longer periods, our pipeline is strong, and with inflation easing and the prospect of interest rate cuts on the horizon, we anticipate demand picking up again late this year.”

Connors said an increase in contract value flowing through the ISG Tango™ sourcing platform is a sign of accelerating client activity. “Contract value on our AI-powered ISG Tango platform now exceeds $4 billion,” said Connors. “This innovative platform solution accelerates speed to value for our clients and generates expanded margins for ISG.”

Second-Quarter 2024 Results

Reported revenues for the second quarter were $64.3 million, down 14 percent from $74.6 million in the prior year’s second quarter. Reported revenues were $40.0 million in the Americas, down 5 percent; $18.8 million in Europe, down 23 percent; and $5.5 million in Asia Pacific, down 31 percent, all versus the prior year.

ISG reported second-quarter operating income of $3.7 million, compared with operating income of $4.9 million in the prior year. The firm’s reported second-quarter net income was $2.0 million, compared with net income of $2.3 million in the prior year. Income per fully diluted share was $0.04, compared with income per fully diluted share of $0.05 in the prior year.

Adjusted net income (a non-GAAP measure defined below under “Non-GAAP Financial Measures”) for the second quarter was $3.8 million, or $0.08 per share on a fully diluted basis, compared with adjusted net income of $5.3 million, or $0.11 per share on a fully diluted basis, in the prior year’s second quarter.

Second-quarter adjusted EBITDA (a non-GAAP measure defined below under “Non-GAAP Financial Measures”) was $7.1 million, down 30 percent from the prior-year second quarter. Adjusted EBITDA margin (a non-GAAP measure calculated by dividing adjusted EBITDA by reported revenues) was 11.1 percent, compared with 13.6 percent in the prior year.

Other Financial and Operating Highlights

ISG generated $2.2 million of cash from operations in the second quarter, compared with generating $2.8 million of cash in the second quarter last year. The firm’s cash balance totaled $11.8 million at June 30, 2024, down from $14.0 million at March 31, 2024.

During the second quarter, ISG repurchased $2.0 million of shares and paid $1.7 million of contingent consideration for prior acquisitions. As of June 30, 2024, ISG had $74.2 million in debt outstanding, down from $79.2 million at the end of last year.

2024 Third-Quarter Revenue and Adjusted EBITDA Guidance

“For the third quarter, ISG is targeting revenues of between $64 million and $66 million and adjusted EBITDA of between $7.0 million and $8.0 million. We will continue to monitor the macroeconomic environment, including the impact of FX, inflation and other factors, and adjust our business plans accordingly,” said Connors.

Quarterly Dividend

The ISG Board of Directors declared a third-quarter dividend of $0.045 per share, payable on October 4, 2024, to shareholders of record as of September 6, 2024.

“ISG remains committed to a disciplined capital allocation strategy that includes reinvesting in our business, managing our debt, returning capital to shareholders in the form of dividends and share repurchases, and supplementing our organic growth with strategic acquisitions to drive long-term shareholder value,” Connors said.

Conference Call

ISG has scheduled a call for 9 a.m., U.S. Eastern Time, Tuesday, August 6, 2024, to discuss the firm’s second-quarter results. The call can be accessed by dialing +1 (800) 715-9871 , or, for international callers, by dialing +1 (646) 307-1963 . The access code is 6237254 . A recording of the conference call will be accessible on ISG’s investor relations page for approximately four weeks following the call.

Forward-Looking Statements

This communication contains “forward-looking statements” which represent the current expectations and beliefs of management of ISG concerning future events and their potential effects. Statements contained herein including words such as “anticipate,” “believe,” “contemplate,” “plan,” “estimate,” “target,” “expect,” “intend,” “will,” “continue,” “should,” “may,” and other similar expressions are “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not guarantees of future results and are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated. Those risks relate to inherent business, economic and competitive uncertainties and contingencies relating to the businesses of ISG and its subsidiaries, including without limitation: (1) failure to secure new engagements or loss of important clients; (2) ability to hire and retain enough qualified employees to support operations; (3) ability to maintain or increase billing and utilization rates; (4) management of growth; (5) success of expansion internationally; (6) competition; (7) ability to move the product mix into higher margin businesses; (8) general political and social conditions such as war, political unrest and terrorism; (9) healthcare and benefit cost management; (10) ability to protect ISG and its subsidiaries’ intellectual property or data and the intellectual property or data of others; (11) currency fluctuations and exchange rate adjustments; (12) ability to successfully consummate or integrate strategic acquisitions; (13) outbreaks of diseases, including coronavirus, or similar public health threats or fear of such an event; and (14) potential terminations of engagements, delays or reductions in scope by clients. Certain of these and other applicable risks, cautionary statements and factors that could cause actual results to differ from ISG’s forward-looking statements are included in ISG’s filings with the U.S. Securities and Exchange Commission. ISG undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events or circumstances.

Non-GAAP Financial Measures

ISG reports all financial information required in accordance with U.S. generally accepted accounting principles (GAAP). In this release, ISG has presented both GAAP financial results as well as non-GAAP information for the three and six months ended June 30, 2024, and June 30, 2023. ISG believes that evaluating its ongoing operating results will be enhanced if it discloses certain non-GAAP information. These non-GAAP financial measures exclude non-cash and certain other special charges that many investors believe may obscure the user’s overall understanding of ISG’s current financial performance and the Company’s prospects for the future. ISG believes that these non-GAAP measures provide useful information to investors because they improve the comparability of the financial results between periods and provide for greater transparency of key measures used to evaluate the Company’s performance.

ISG provides adjusted EBITDA (defined as net income, plus interest, taxes, depreciation and amortization, foreign currency transaction gains/losses, non-cash stock compensation, interest accretion associated with contingent consideration, acquisition-related costs, and severance, integration and other expense), adjusted net income (defined as net income, plus amortization of intangible assets, non-cash stock compensation, foreign currency transaction gains/losses, interest accretion associated with contingent consideration, acquisition-related costs, write-off of deferred financing cost and severance, integration and other expense on a tax-adjusted basis), adjusted net income per diluted share, adjusted EBITDA margin, and selected financial data on a constant currency basis which are non-GAAP measures that the Company believes provide useful information to both management and investors by excluding certain expenses and financial implications of foreign currency translations, which management believes are not indicative of ISG’s core operations. These non-GAAP measures are used by ISG to evaluate the Company’s business strategies and management’s performance.

We evaluate our results of operations on both an as reported and a constant currency basis. The constant currency presentation, which is a non-GAAP financial measure, excludes the impact of year-over-year fluctuations in foreign currency exchange rates. We believe providing constant currency information provides valuable supplemental information regarding our results of operations, thereby facilitating period-to-period comparisons of our business performance, and is consistent with how management evaluates the Company’s performance. We calculate constant currency percentages by converting our current and prior periods’ local currency financial results using the same point in time exchange rates and then comparing the adjusted current and prior period results. This calculation may differ from similarly titled measures used by others and, accordingly, the constant currency presentation is not meant to be a substitution for recorded amounts presented in conformity with GAAP, nor should such amounts be considered in isolation.

Management believes this information facilitates comparison of underlying results over time. Non-GAAP financial measures, when presented, are reconciled to the most closely applicable GAAP measure. Non-GAAP measures are provided as additional information and should not be considered in isolation or as a substitute for results prepared in accordance with GAAP. A reconciliation of the forward-looking non-GAAP estimates contained herein to the corresponding GAAP measures is not being provided, due to the unreasonable efforts required to prepare it.

About ISG

ISG (Information Services Group) (Nasdaq: III ) is a leading global technology research and advisory firm. A trusted business partner to more than 900 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including AI and automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs 1,600 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com .

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Tuesday, August 06, 2024

ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 700 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,300 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For additional information, visit www.ISG-One.com

Joe Gomes, CFA, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

2Q Results. Reported revenues totaled $64.3 million, slightly below our estimate of $65 million. Clients are continuing to delay projects, as these are being pushed further. Net income was better than expected at $2.0 million, or $0.04 per diluted share, compared to $2.3 million or $0.05 last year. We estimated a net loss of $0.2 million or breakeven EPS.

Silver Lining. The continued headwind of client decision making has offered a light at the end of the tunnel for management. An increase in contract value through ISG Tango, now exceeding $4 billion from $2.6 billion in the previous quarter, offers a sign that clients are allocating more towards projects in our view. The increase in overall contract value showcases management’s belief in increasing business spending as the year progresses.

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Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Tuesday, July 02, 2024

ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 700 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,300 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For additional information, visit www.ISG-One.com

Joe Gomes, CFA, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Conference. We hosted Information Services Group CEO Michael Connors and CFO Michael Sherrick at the Noble Capital Emerging Growth Conference on June 26th. The entire presentation and Q&A session can be found at https://www.channelchek.com/videos/isg-iii-noble-capital-markets-virtual-consumer-tmt-conference-replay. The following are key highlights of the presentation.

Recurring Revenue. ISG highlighted its goal of reaching $150 million in recurring revenue. The Company had recurring revenue of $125 million in 2023, a 16% uplift from 2022. ISG is already off to a good start in 2024 as approximately half of the Company’s $64.3 million of first quarter revenue was recurring. We believe that the Company can achieve its goal.

Get the Full Report

Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Monday, May 13, 2024

ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 700 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,300 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For additional information, visit www.ISG-One.com

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Continued Slow Environment. ISG’s performance continued to be impacted by slower client decision making. Clients are taking longer to commit to new investments and are developing their AI strategy. We believe that the decision making will continue to affect the Company over the fiscal year, however, the impact will lessen over the quarters as clients start to spend more.

Recurring Revenue. Management’s focus on increasing its recurring revenue continues to be showcased, as half the revenue during the quarter was recurring. The Company’s services on platforms such as GovernX and ProBenchmark continue to experience increased demand and the addition of Ventana Research is providing new relationships, potentially increasing opportunities for cross-selling, in our view. With AI looming, ISG is poised to strike with its AI services when businesses start to invest more in the technology.

Get the Full Report

Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Friday, May 10, 2024

ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 700 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,300 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For additional information, visit www.ISG-One.com

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Results. Revenue was reported at $64.3 million, down 18% from $78.5 million in the previous year. We estimated revenue of $66 million. Continued slower client decision making meant revenue is being pushed into later quarters. Net loss for the quarter was $3.4 million, or a loss of $0.07 per share, compared to net income of $3.5 million, or $0.07 per share last year. We estimated a net loss of $0.7 million, or a loss of $0.01 per share.

Recurring Revenue and Tango. Recurring revenues for the Company continue to grow, accounting for about half of ISG’s revenues in 1Q24. For the trailing 12 months, recurring revenues totaled $126 million, up 10% from the previous 12-month period. We expect recurring revenues to continue to grow with management’s focus on growing platforms such as ISG GovernX and ISG ProBenchmark. With the launch of the next-gen sourcing platform ISG Tango in March, the Company is already seeing the platform gaining interest, as over $2.6 billion of contract value is already running on the platform.

Get the Full Report

Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.