Tag: Technology

Research News and Market Data on III

Upcoming ISG Provider Lens™ report will evaluate providers offering a range of capabilities to improve the efficiency and agility of customers’ financial processes

STAMFORD, Conn.–(BUSINESS WIRE)– Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm, has launched a research study examining outsourcing services that help enterprises improve their finance and accounting operations and business decision-making.

The study results will be published in a comprehensive ISG Provider Lens™ report, called Finance and Accounting Outsourcing Services (FAO), scheduled to be released in October. The report will cover the global market for services related to procurement, reporting, budgeting, financial planning and other functions.

Enterprise buyers will be able to use information from the report to evaluate their current vendor relationships, potential new engagements and available offerings, while ISG advisors use the information to recommend providers to the firm’s buy-side clients.

Cost reduction, enhanced speed and higher levels of accuracy continue to be the primary drivers of FAO. But as the sector has matured over the last decade, enterprises are expecting their providers to be more consultative and partner-oriented, while leveraging advanced technologies such as AI, machine learning, automation and, most recently, GenAI to deliver more impactful outcomes. Such technologies streamline processes and enable predictive analysis and sophisticated decision-making capabilities essential for strategic planning and competitive advantage.

“Enterprises are looking for FAO providers that act not just as service executors but as advisors and collaborators able to navigate and leverage the broader ecosystem of partners and industry experts,” said Namratha Dharshan, chief business leader, ISG Research. “Providers are expected to understand and align themselves with their customers’ long-term business objectives.”

ISG has distributed surveys to more than 40 finance and accounting outsourcing providers. Working in collaboration with ISG’s global advisors, the research team will produce four quadrants representing the finance and accounting outsourcing services the typical enterprise is buying, based on ISG’s experience working with its clients. The four quadrants are:

• Procure to Pay (P2P), evaluating providers of services across the accounts payable process, including paying suppliers, reconciling accounts, tracking expenses and spending patterns and negotiating contracts. P2P providers use new technologies including AI and machine learning to automate processes and increase efficiency.
• Order to Cash (O2C),assessing providers of end-to-end O2C operations, including processing customer orders, ensuring payments are received promptly, managing credit risk and providing customer support. Clients look to these partners to streamline operations, often through automation to reduce manual processes.
• Record to Report (R2R), covering providers that manage clients’ financial record-keeping and reporting, including complex processes such as managing the end-of-period close process, preparing financial statements and assessing clients’ internal control systems.
• Financial Planning and Analysis (FP&A), evaluating providers of high-end financial functions including budgeting, forecasting, financial planning and M&A. These providers act as partners to clients, delivering comprehensive and meaningful data and insights.

The report resulting from this study will cover the global finance and accounting outsourcing market. ISG analysts Gaurang Pagdi and Sneha Jayanth will serve as authors of the report.

A list of identified providers and vendors and further details on the study are available in this digital brochure. Companies not listed as finance and accounting outsourcing providers can contact ISG and ask to be included in the study.

All 2024 ISG Provider Lens™ evaluations feature expanded customer experience (CX) data that measures actual enterprise experience with specific provider services and solutions, based on ISG’s continuous CX research. Enterprise customers wishing to share their experience about a specific provider or vendor are encouraged to register here to receive a personalized survey URL. Participants will receive a copy of this report in return for their feedback.

About ISG Provider Lens™ Research

The ISG Provider Lens™ Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG’s global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG’s enterprise clients. The research currently covers providers offering their services globally, across Europe, as well as in the U.S., Canada, Brazil, the U.K., France, Benelux, Germany, Switzerland, the Nordics, Australia and Singapore/Malaysia, with additional markets to be added in the future. For more information about ISG Provider Lens research, please 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 800 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 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 more information, visit www.isg-one.com.

Research News and Market Data on III

Information Services Group Announces First-Quarter 2024 Results

• Reports first-quarter GAAP revenues of $64 million
• Reports first-quarter net loss of $3.4 million, GAAP loss per share of $0.07 and adjusted net income per share of $0.01
• Reports first-quarter adjusted EBITDA of $4 million
• Generates $2.3 million of cash from operations
• Declares second-quarter dividend of $0.045 per share, payable July 5, 2024, to shareholders of record as of June 14, 2024
• Sets second-quarter guidance: revenues between $65 million and $67 million and adjusted EBITDA between $7.0 million 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 first quarter ended March 31, 2024.

“As anticipated, we saw market uncertainty impact the broader global technology industry during the first quarter,” said Michael P. Connors, chairman and CEO. “With that said, our opportunity pipeline is growing, so we believe the worst is behind us. We see the market turning and gaining momentum over the course of the year.”

Connors said clients slowed their pace of spending and generally have been taking longer to decide on new investments, as they weigh economic conditions and wait to see how AI shapes the technology landscape before committing to major new initiatives.

“As the market transitions from the planning to the execution phase of AI, there will be significant investments in infrastructure and implementation,” Connors said. “Additionally, we see a notable increase in demand for cost and spend transformation, as companies continue to adapt to uncertain macroeconomic conditions. Early indicators, such as a rise in sourcing activity, suggest the demand environment is evolving and will accelerate going forward.”

Connors also said ISG is encouraged by the continuing growth of its recurring revenue business. “Demand for our research, governance and platforms continues, as clients seek market intelligence and governance solutions to shape their future investment decisions,” Connors said. “Our next-gen sourcing platform, ISG Tango™, launched in March, has been well-received, with over $2.6 billion of contract value already running on the platform.”

Connors noted that recurring revenues represented about half of the firm’s revenues in the first quarter and totaled $126 million for the trailing 12 months, up 10 percent from the previous 12-month period.

First-Quarter 2024 Results

Reported revenues for the first quarter were $64.3 million, down 18 percent from $78.5 million in the prior year’s first quarter. Reported revenues were $40.8 million in the Americas, down 16 percent; $17.8 million in Europe, down 23 percent; and $5.6 million in Asia Pacific, down 20 percent, all versus the prior year.

ISG reported a first-quarter operating loss of $2.4 million, compared with operating income of $7.1 million in the prior year. The firm’s reported first-quarter net loss was $3.4 million, compared with net income of $3.5 million in the prior year. Loss per fully diluted share was $0.07, compared with income per fully diluted share of $0.07 in the prior year.

Adjusted net income (a non-GAAP measure defined below under “Non-GAAP Financial Measures”) for the first quarter was $0.7 million, or $0.01 per share on a fully diluted basis, compared with adjusted net income of $6.0 million, or $0.12 per share on a fully diluted basis, in the prior year’s first quarter.

First-quarter adjusted EBITDA (a non-GAAP measure defined below under “Non-GAAP Financial Measures”) was $4.4 million, down 60 percent from the prior-year first quarter. Adjusted EBITDA margin (a non-GAAP measure calculated by dividing adjusted EBITDA by reported revenues) was 6.9 percent, compared with 14.0 percent in the prior year.

Other Financial and Operating Highlights

ISG generated $2.3 million of cash from operations in the first quarter, compared with using $3.4 million of cash in the first quarter last year. The firm’s cash balance totaled $14.0 million at March 31, 2024, down from $22.6 million at December 31, 2023.

During the first quarter, ISG paid dividends of $2.4 million, repurchased $2.5 million of shares and paid down debt of $5.0 million. As of March 31, 2024, ISG had $74.2 million in debt outstanding, down from $79.2 million at the end of last year.

2024 Second-Quarter Revenue and Adjusted EBITDA Guidance

“For the second quarter, ISG is targeting revenues of between $65 million and $67 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 second-quarter dividend of $0.045 per share, payable on July 5, 2024, to shareholders of record as of June 14, 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, Friday, May 10, 2024, to discuss the firm’s first-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 7294332. A recording of the conference call will be accessible on ISG’s website (www.isg-one.com ) 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 months ended March 31, 2024, and March 31, 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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