Information Services Group Announces First-Quarter 2021 Results

Rhea-AI Summary

Information Services Group (III), a global technology research and advisory firm, reported record fee revenues for Q1 2021, totaling $66.6 million, marking a 4% increase year-over-year. Notably, fee revenues excluding reimbursable travel expenses rose 7%. The CEO highlighted a burgeoning demand for digital transformation post-COVID-19, aided by ISG's innovative operating model. A significant milestone includes a new automation contract valued at over $10 million. The company continues to experience improved margins and client growth opportunities.

Positive

• Record Q1 2021 fee revenues of $66.6 million, up 4% YoY.
• Fee revenues increased 7% when excluding reimbursable T&E.
• Contracts include a significant $10 million automation deal.
• Increased digital transformation demand post-COVID-19.

Negative

• Reimbursable travel and entertainment expenses decreased by $1.5 million due to pandemic-related restrictions.

Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm, today reported record fee revenues, profitability and cash flow for the first quarter ended March 31, 2021.

“ISG is off to its best start ever,” said Michael P. Connors, chairman and CEO. “With rising demand for all things digital and reaping the benefits of our new operating model and disciplined operating approach, we delivered record first-quarter fee revenues and profitability, with new first-quarter highs for adjusted EBITDA, net income and GAAP earnings per share. Momentum is on our side.”

Commenting on current market conditions, Connors said ISG clients are embracing “a new wave of digital transformation” coming out of the pandemic. “COVID-19 showed every company the power of digital to connect people, attract new customers, and enable a new era of business efficiency and growth. We see enterprises in many industries beginning to increase their digital investments, gradually moving beyond initial COVID cautiousness as the crisis begins to lift in many parts of the world.”

ISG is well positioned to capitalize on this demand with its growing array of digital offerings, in-depth market research and analysis, and SaaS-based platforms, including its market-leading ISG GovernX® vendor compliance and risk management platform, Connors said.

One area of high demand is automation technologies, Connors said, pointing to a recent automation contract ISG signed with a major entertainment company. The deal, valued at more than $10 million, is the largest ever signed by ISG Automation, the firm’s pure-play intelligent automation business.

Overall, ISG is realizing new client growth opportunities, higher consultant utilization and improved margins through its solution-centric ISG NEXT operating model, including the ISG iFlex™ global delivery network, Connors noted.

First-Quarter 2021 Results

Reported revenues for the first quarter were $66.6 million, up 4 percent versus last year (up 1 percent in constant currency). Currency translation positively impacted reported revenues by $2.4 million versus the prior year. Reported revenues include reimbursable client travel and entertainment expense (“T&E”), which was down $1.5 million, or 240 basis points, versus the prior year, due to pandemic-related travel restrictions. Excluding the impact of reimbursable T&E, fee revenues were up 7 percent, to a new record.

First-quarter rev

FAQ

What were the Q1 2021 financial results for ISG (III)?

ISG reported record Q1 2021 revenues of $66.6 million, which is a 4% increase compared to the previous year.

What does ISG attribute its growth to in Q1 2021?

ISG attributes its growth to rising demand for digital transformation and its new operating model.

What is the significance of the $10 million contract signed by ISG?

The $10 million contract is the largest ever for ISG Automation, reflecting strong demand for automation technologies.

How did currency translation impact ISG's revenues in Q1 2021?

Currency translation positively impacted reported revenues by $2.4 million compared to the prior year.