Information Services Group Announces Fourth-Quarter and Full-Year 2024 Results
-
Reports fourth-quarter GAAP revenues of
$58 million -
Reports fourth-quarter GAAP net income of
$3.0 million $0.06 $0.06 $2.3 million -
Reports fourth-quarter adjusted EBITDA of
$6.5 million 11% versus prior year -
Generates
$6.6 million -
Delivers full-year GAAP revenues of
$248 million $5.8 million $2.8 million $0.06 $25.1 million $10.0 million $0.20 $1.7 million -
Declares first-quarter dividend of
$0.04 5 - Launches AI-centered positioning to reflect expanding role helping enterprises adopt AI at scale
-
Sets first-quarter guidance: revenues between
$58 million $59 million $6.5 million $7.5 million
Commenting on the results, Chairman and CEO Michael P. Connors said: “We delivered a strong fourth quarter, beginning with the sale of our automation unit, which significantly strengthened our balance sheet. Our profitability improved, with adjusted EBITDA up 11 percent and our adjusted EBITDA margin up more than 200 basis points. We generated strong cash flow and have reduced our debt by 25 percent from a year ago. And we saw a return to growth in the
Commenting on the macro environment, Connors said: “Overall, we see a gradually improving demand environment in 2025, as clients accelerate their overall technology spending to facilitate broadscale adoption of AI, especially in areas including cloud computing, data analytics and data governance. ISG is ideally positioned to meet these needs with our robust AI advisory capabilities and sourcing ecosystem expertise. AI is at the center of everything we do to deliver operational excellence and faster growth to our clients.”
AI-Centered Repositioning
Last month, ISG announced a strategic repositioning of the firm to reflect the expanding role it plays in helping enterprises adopt AI at scale to drive greater levels of innovation and efficiency. ISG’s new descriptive phrase—“a global AI-centered technology research and advisory firm”—underscores the importance of AI in all areas of the firm’s business.
ISG has served more than 100 clients with AI-focused research and advisory services in the last 12 months and expects its AI-related activities to become an increasingly important component of its business over the next two years as enterprises move beyond the planning and experimentation phases and begin to adopt AI more broadly across their organizations.
At the same time, ISG is leveraging AI to improve the speed and efficiency of its proprietary client platforms, most notably ISG Tango™, the firm’s groundbreaking sourcing platform launched last year. More than
Fourth-Quarter 2024 Results
Reported revenues for the fourth quarter were
Revenues were
ISG reported fourth-quarter operating income of
During the fourth quarter of 2024, ISG recorded a
Adjusted net income (a non-GAAP measure defined below under “Non-GAAP Financial Measures”) for the fourth quarter of 2024 was
Fourth-quarter adjusted EBITDA (a non-GAAP measure defined below under “Non-GAAP Financial Measures”) was
Full-Year 2024 Results
Reported revenues for the full year were
Revenues were
ISG reported full-year operating income of
Adjusted net income (a non-GAAP measure defined below under “Non-GAAP Financial Measures”) for the full year was
Full-year adjusted EBITDA (a non-GAAP measure defined below under “Non-GAAP Financial Measures”) was
Other Financial and Operating Highlights
ISG generated
During the fourth quarter, ISG reduced debt by
2025 First-Quarter Revenue and Adjusted EBITDA Guidance
“We expect an acceleration in client demand and profitability throughout the course of this year, beginning in the
Quarterly Dividend
The ISG Board of Directors declared a first-quarter dividend of
Conference Call
ISG has scheduled a call for 9 a.m.,
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; (14) engagements may be terminated, delayed or reduced in scope by clients; (15) the effect of the divestiture of the automation unit on ISG’s relationships with its customers and suppliers and on its retained business generally; and (16) the success of ISG’s focus on AI advisory and AI-powered platforms. 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
Non-GAAP Financial Measures
ISG reports all financial information required in accordance with
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, gain on the sale of business, tax indemnity receivable, accounts receivables reserves, acquisition- and disposition-related cost, 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, gain on the sale of business, acquisition- and disposition-related cost, accounts receivables reserves, write-off of deferred financing costs 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 compare 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 (Nasdaq: III) is a global AI-centered technology research and advisory firm. A trusted partner to more than 900 clients, including 75 of the world’s top 100 enterprises, ISG is a long-time leader in technology and business services that is now at the forefront of leveraging AI to help organizations achieve operational excellence and faster growth. The firm, founded in 2006, is known for its proprietary market data, in-depth knowledge of provider ecosystems, and the expertise of its 1,600 professionals worldwide working together to help clients maximize the value of their technology investments.
| Information Services Group, Inc. | |||||||||||||||
| Condensed Consolidated Statement of Income and Comprehensive Income | |||||||||||||||
| (unaudited) | |||||||||||||||
| (in thousands, except per share amounts) | |||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
2024 |
2023 |
2024 |
2023 |
||||||||||||
| Revenues | $ |
57,777 |
|
$ |
66,186 |
|
$ |
247,585 |
|
$ |
291,054 |
|
|||
| Operating expenses | |||||||||||||||
| Direct costs and expenses for advisors |
|
33,821 |
|
|
40,865 |
|
|
150,306 |
|
|
178,913 |
|
|||
| Selling, general and administrative |
|
22,613 |
|
|
27,276 |
|
|
85,634 |
|
|
91,271 |
|
|||
| Depreciation and amortization |
|
1,164 |
|
|
1,567 |
|
|
5,888 |
|
|
6,258 |
|
|||
| Operating income |
|
179 |
|
|
(3,522 |
) |
|
5,757 |
|
|
14,612 |
|
|||
| Interest income |
|
81 |
|
|
212 |
|
|
782 |
|
|
497 |
|
|||
| Interest expense |
|
(1,165 |
) |
|
(1,513 |
) |
|
(5,837 |
) |
|
(6,190 |
) |
|||
| Gain on the sale of business |
|
4,536 |
|
|
- |
|
|
4,532 |
|
|
- |
|
|||
| Foreign currency transaction loss |
|
17 |
|
|
(118 |
) |
|
(7 |
) |
|
(158 |
) |
|||
| Income before taxes |
|
3,648 |
|
|
(4,941 |
) |
|
5,227 |
|
|
8,761 |
|
|||
| Income tax provision |
|
606 |
|
|
(2,072 |
) |
|
2,388 |
|
|
2,607 |
|
|||
| Net income (loss) | $ |
3,042 |
|
$ |
(2,869 |
) |
$ |
2,839 |
|
$ |
6,154 |
|
|||
| Weighted average shares outstanding: | |||||||||||||||
| Basic |
|
48,909 |
|
|
48,810 |
|
|
48,785 |
|
|
48,609 |
|
|||
| Diluted |
|
50,638 |
|
|
49,838 |
|
|
50,049 |
|
|
50,175 |
|
|||
| Earnings (loss) per share: | |||||||||||||||
| Basic | $ |
0.06 |
|
$ |
(0.06 |
) |
$ |
0.06 |
|
$ |
0.13 |
|
|||
| Diluted | $ |
0.06 |
|
$ |
(0.06 |
) |
$ |
0.06 |
|
$ |
0.12 |
|
|||
| Information Services Group, Inc. | |||||||||||||||
| Reconciliation from GAAP to Non-GAAP | |||||||||||||||
| (unaudited) | |||||||||||||||
| (in thousands, except per share amounts) | |||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
2024 |
2023 |
2024 |
2023 |
||||||||||||
| Net income (loss) | $ |
3,042 |
|
$ |
(2,869 |
) |
$ |
2,839 |
|
$ |
6,154 |
|
|||
| Plus: | |||||||||||||||
| Interest expense (net of interest income) |
|
1,084 |
|
|
1,301 |
|
|
5,055 |
|
|
5,693 |
|
|||
| Income taxes |
|
606 |
|
|
(2,072 |
) |
|
2,388 |
|
|
2,607 |
|
|||
| Depreciation and amortization |
|
1,164 |
|
|
1,567 |
|
|
5,888 |
|
|
6,258 |
|
|||
| Interest accretion associated with contingent consideration |
|
12 |
|
|
26 |
|
|
77 |
|
|
104 |
|
|||
| Change in contingent consideration |
|
- |
|
|
- |
|
|
(2,390 |
) |
|
- |
|
|||
| Acquisition and disposition-related cost (1) |
|
2,201 |
|
|
102 |
|
|
2,880 |
|
|
201 |
|
|||
| Severance, integration and other expense |
|
625 |
|
|
497 |
|
|
4,887 |
|
|
2,513 |
|
|||
| Gain on the sale of business |
|
(4,536 |
) |
|
- |
|
|
(4,532 |
) |
|
- |
|
|||
| Account receivable reserves |
|
- |
|
|
4,822 |
|
|
- |
|
|
4,822 |
|
|||
| Tax indemnity receivable |
|
- |
|
|
35 |
|
|
- |
|
|
35 |
|
|||
| Foreign currency transaction (gain) loss |
|
(17 |
) |
|
118 |
|
|
7 |
|
|
158 |
|
|||
| Non-cash stock compensation |
|
2,356 |
|
|
2,380 |
|
|
8,046 |
|
|
9,132 |
|
|||
| Adjusted EBITDA | $ |
6,537 |
|
$ |
5,907 |
|
$ |
25,145 |
|
$ |
37,677 |
|
|||
| Net income (loss) | $ |
3,042 |
|
$ |
(2,869 |
) |
$ |
2,839 |
|
$ |
6,154 |
|
|||
| Plus: | |||||||||||||||
| Non-cash stock compensation |
|
2,356 |
|
|
2,380 |
|
|
8,046 |
|
|
9,132 |
|
|||
| Intangible amortization |
|
376 |
|
|
812 |
|
|
2,606 |
|
|
3,164 |
|
|||
| Interest accretion associated with contingent consideration |
|
12 |
|
|
26 |
|
|
77 |
|
|
104 |
|
|||
| Change in contingent consideration |
|
- |
|
|
- |
|
|
(2,390 |
) |
|
- |
|
|||
| Acquisition and disposition-related cost (1) |
|
2,201 |
|
|
102 |
|
|
2,880 |
|
|
201 |
|
|||
| Gain on the sale of business |
|
(4,536 |
) |
|
- |
|
|
(4,532 |
) |
|
- |
|
|||
| Account receivables reserves |
|
- |
|
|
4,822 |
|
|
- |
|
|
4,822 |
|
|||
| Severance, integration and other expense |
|
625 |
|
|
497 |
|
|
4,887 |
|
|
2,513 |
|
|||
| Write-off of deferred financing costs |
|
- |
|
|
- |
|
|
- |
|
|
379 |
|
|||
| Foreign currency transaction (gain) loss |
|
(17 |
) |
|
118 |
|
|
7 |
|
|
158 |
|
|||
| Tax effect (2) |
|
(1,073 |
) |
|
(2,802 |
) |
|
(4,452 |
) |
|
(6,551 |
) |
|||
| Adjusted net income | $ |
2,986 |
|
$ |
3,086 |
|
$ |
9,968 |
|
$ |
20,076 |
|
|||
| Weighted average shares outstanding: | |||||||||||||||
| Basic |
|
48,909 |
|
|
48,810 |
|
|
48,785 |
|
|
48,609 |
|
|||
| Diluted |
|
50,638 |
|
|
49,838 |
|
|
50,049 |
|
|
50,175 |
|
|||
| Adjusted earnings per share: | |||||||||||||||
| Basic | $ |
0.06 |
|
$ |
0.06 |
|
$ |
0.20 |
|
$ |
0.41 |
|
|||
| Diluted | $ |
0.06 |
|
$ |
0.06 |
|
$ |
0.20 |
|
$ |
0.40 |
|
|||
(1) |
Consists of expenses from acquisition-related costs and non-cash fair value adjustments on pre-acquisition contract liabilities. | |||||||||||||
(2) |
Marginal tax rate of |
|||||||||||||
| Information Services Group, Inc. | |||||||||||||||||
| Selected Financial Data | |||||||||||||||||
| Constant Currency Comparison | |||||||||||||||||
| Three Months | Three Months | ||||||||||||||||
| Three Months | Constant | Ended | Three Months | Constant | Ended | ||||||||||||
| Ended | currency | December 31, 2024 | Ended | currency | December 31, 2023 | ||||||||||||
| December 31, 2024 | impact | Adjusted | December 31, 2023 | impact | Adjusted | ||||||||||||
| Revenue | $ |
57,777 |
$ |
235 |
|
$ |
58,012 |
$ |
66,186 |
|
$ |
514 |
|
$ |
66,700 |
|
|
| Operating income | $ |
179 |
$ |
(14 |
) |
$ |
165 |
$ |
(3,522 |
) |
$ |
107 |
|
$ |
(3,415 |
) |
|
| Adjusted EBITDA | $ |
6,537 |
$ |
(4 |
) |
$ |
6,533 |
$ |
5,907 |
|
$ |
126 |
|
$ |
6,033 |
|
|
| Twelve Months | Twelve Months | ||||||||||||||||
| Twelve Months | Constant | Ended | Twelve Months | Constant | Ended | ||||||||||||
| Ended | currency | December 31, 2024 | Ended | currency | December 31, 2023 | ||||||||||||
| December 31, 2024 | impact | Adjusted | December 31, 2023 | impact | Adjusted | ||||||||||||
| Revenue | $ |
247,585 |
$ |
59 |
|
$ |
247,644 |
$ |
291,054 |
|
$ |
751 |
|
$ |
291,805 |
|
|
| Operating income | $ |
5,757 |
$ |
(305 |
) |
$ |
5,452 |
$ |
14,612 |
|
$ |
(11 |
) |
$ |
14,601 |
|
|
| Adjusted EBITDA | $ |
25,145 |
$ |
(293 |
) |
$ |
24,852 |
$ |
37,677 |
|
$ |
21 |
|
$ |
37,698 |
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20250306903042/en/
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.
