Information Services Group Announces Third-Quarter 2024 Results
Information Services Group (ISG) reported Q3 2024 results with revenues of $61.3 million, down 15% year-over-year. The company posted net income of $1.1 million, with GAAP EPS of $0.02 and adjusted EPS of $0.05. Adjusted EBITDA was $7.1 million, representing an 11.6% margin. Notable events include the sale of its automation unit to UST for $27 million and strong cash flow from operations of $8.8 million. For Q4 2024, ISG guides revenues between $57-58 million and adjusted EBITDA of $6-7 million. The company declared a quarterly dividend of $0.045 per share.
Information Services Group (ISG) ha riportato i risultati del terzo trimestre 2024 con ricavi di 61,3 milioni di dollari, in calo del 15% rispetto all'anno precedente. L'azienda ha registrato un utile netto di 1,1 milioni di dollari, con un EPS GAAP di 0,02 dollari e un EPS rettificato di 0,05 dollari. EBITDA rettificato è stato di 7,1 milioni di dollari, rappresentando un margine dell'11,6%. Eventi significativi includono la vendita della sua unità di automazione a UST per 27 milioni di dollari e un forte flusso di cassa dalle operazioni di 8,8 milioni di dollari. Per il quarto trimestre 2024, ISG prevede ricavi tra 57 e 58 milioni di dollari e un EBITDA rettificato di 6-7 milioni di dollari. L'azienda ha dichiarato un dividendo trimestrale di 0,045 dollari per azione.
Information Services Group (ISG) reportó resultados del tercer trimestre de 2024 con ingresos de 61,3 millones de dólares, una caída del 15% interanual. La compañía registró un ingreso neto de 1,1 millones de dólares, con un EPS GAAP de 0,02 y un EPS ajustado de 0,05. EBITDA ajustado fue de 7,1 millones de dólares, lo que representa un margen del 11,6%. Eventos notables incluyen la venta de su unidad de automatización a UST por 27 millones de dólares y un sólido flujo de efectivo de las operaciones de 8,8 millones de dólares. Para el cuarto trimestre de 2024, ISG estima ingresos entre 57 y 58 millones de dólares y un EBITDA ajustado de 6-7 millones de dólares. La empresa declaró un dividendo trimestral de 0,045 dólares por acción.
정보 서비스 그룹 (ISG)은 2024년 3분기 실적을 보고하며, 수익이 6,130만 달러로 지난해 대비 15% 감소했다고 발표했습니다. 이 회사의 순이익은 110만 달러였으며, GAAP EPS는 0.02달러, 조정 EPS는 0.05달러였습니다. 조정된 EBITDA는 710만 달러로, 11.6%의 마진을 나타냅니다. 주요 사건으로는 자동화 부문을 UST에 2,700만 달러에 매각한 것과 880만 달러의 운영에서 강한 현금 흐름을 기록한 것이 있습니다. 2024년 4분기 ISG는 5,700만에서 5,800만 달러의 수익과 600만에서 700만 달러의 조정 EBITDA를 예상하고 있습니다. 회사는 주당 0.045달러의 분기 배당금을 선언했습니다.
Information Services Group (ISG) a annoncé les résultats du troisième trimestre 2024 avec des revenus de 61,3 millions de dollars, en baisse de 15 % par rapport à l'année précédente. L'entreprise a affiché un bénéfice net de 1,1 million de dollars, avec un BPA GAAP de 0,02 dollar et un BPA ajusté de 0,05 dollar. EBITDA ajusté s'élevait à 7,1 millions de dollars, représentant une marge de 11,6 %. Parmi les événements notables, on note la vente de son unité d'automatisation à UST pour 27 millions de dollars et un flux de trésorerie solide provenant des opérations de 8,8 millions de dollars. Pour le quatrième trimestre 2024, ISG anticipe des revenus compris entre 57 et 58 millions de dollars et un EBITDA ajusté de 6 à 7 millions de dollars. L'entreprise a déclaré un dividende trimestriel de 0,045 dollar par action.
Information Services Group (ISG) berichtete über die Ergebnisse des dritten Quartals 2024 mit Einnahmen von 61,3 Millionen Dollar, was einem Rückgang von 15 % im Jahresvergleich entspricht. Das Unternehmen erzielte einen Nettoertrag von 1,1 Millionen Dollar, mit GAAP EPS von 0,02 Dollar und angepasstem EPS von 0,05 Dollar. Bereinigtes EBITDA betrug 7,1 Millionen Dollar, was einer Marge von 11,6 % entspricht. Zu den bemerkenswerten Ereignissen gehören der Verkauf seiner Automatisierungseinheit an UST für 27 Millionen Dollar und ein starker Cashflow aus dem operativen Geschäft von 8,8 Millionen Dollar. Für das vierte Quartal 2024 prognostiziert ISG Einnahmen zwischen 57 und 58 Millionen Dollar sowie ein angepasstes EBITDA von 6-7 Millionen Dollar. Das Unternehmen erklärte eine vierteljährliche Dividende von 0,045 Dollar pro Aktie.
- Strong cash flow from operations of $8.8 million, up from $3.2 million year-over-year
- Sale of automation unit for $27 million in cash
- Reduced debt to $66.2 million from $79.2 million at year-end
- Digital sourcing platform contract value up 25% sequentially to $5 billion
- Revenue declined 15% year-over-year to $61.3 million
- Net income decreased to $1.1 million from $3.2 million year-over-year
- Adjusted EBITDA fell 34% year-over-year with margin declining to 11.6% from 14.8%
- Q4 guidance suggests continued revenue decline
Insights
The Q3 results paint a challenging picture with significant revenue declines across all regions. Revenue dropped 15% to
The strategic sale of the automation unit for
The
-
Reports third-quarter GAAP revenues of
$61 million -
Reports third-quarter net income of
, GAAP EPS of$1.1 million and adjusted EPS of$0.02 $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
in cash, with$27 million held in escrow$7 million -
Declares fourth-quarter dividend of
per share, payable December 20, 2024, to shareholders of record as of December 3, 2024$0.04 5 -
Sets fourth-quarter guidance: revenues between
and$57 million and adjusted EBITDA between$58 million and$6.0 $7.0 million
“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
Divestiture of Automation Unit
On October 1, ISG sold its robotic process automation unit to UST, a leading digital transformation solutions company, for
Third-Quarter 2024 Results
Reported revenues for the third quarter were
ISG reported third-quarter operating income of
Adjusted net income (a non-GAAP measure defined below under “Non-GAAP Financial Measures”) for the third quarter was
Third-quarter adjusted EBITDA (a non-GAAP measure defined below under “Non-GAAP Financial Measures”) was
Other Financial and Operating Highlights
ISG generated
2024 Fourth-Quarter Revenue and Adjusted EBITDA Guidance
“For the fourth quarter, ISG is targeting revenues of between
Quarterly Dividend
The ISG Board of Directors declared a fourth-quarter dividend of
“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.,
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
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, 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
Information Services Group, Inc. | ||||||||||||||||
Condensed Consolidated Statement of Income and Comprehensive Income | ||||||||||||||||
(unaudited) | ||||||||||||||||
(in thousands, except per share amounts) | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|||||
Revenues | $ |
61,277 |
|
$ |
71,773 |
|
$ |
189,808 |
|
$ |
224,868 |
|
||||
Operating expenses | ||||||||||||||||
Direct costs and expenses for advisors |
|
36,530 |
|
43,032 |
|
|
116,484 |
|
|
138,048 |
|
|||||
Selling, general and administrative |
|
18,855 |
|
|
20,992 |
|
|
63,026 |
|
|
63,992 |
|
||||
Depreciation and amortization |
|
1,598 |
|
|
1,526 |
|
|
4,724 |
|
|
4,692 |
|
||||
Operating income |
|
4,294 |
|
|
6,223 |
|
|
5,574 |
|
|
18,136 |
|
||||
Interest income |
|
222 |
|
|
104 |
|
|
701 |
|
|
285 |
|
||||
Interest expense |
|
(1,604 |
) |
|
(1,533 |
) |
|
(4,672 |
) |
|
(4,676 |
) |
||||
Foreign currency transaction loss |
|
(30 |
) |
|
(2 |
) |
|
(24 |
) |
|
(40 |
) |
||||
Income before taxes |
|
2,882 |
|
|
4,792 |
|
|
1,579 |
|
|
13,705 |
|
||||
Income tax provision |
|
1,734 |
|
|
1,591 |
|
|
1,782 |
|
|
4,680 |
|
||||
Net income (loss) | $ |
1,148 |
|
$ |
3,201 |
|
$ |
(203 |
) |
$ |
9,025 |
|
||||
Weighted average shares outstanding: | ||||||||||||||||
Basic |
|
48,940 |
|
|
48,711 |
|
|
48,743 |
|
|
48,542 |
|
||||
Diluted |
|
50,158 |
|
|
50,257 |
|
|
48,743 |
|
|
50,287 |
|
||||
Earnings (loss) per share: | ||||||||||||||||
Basic |
$ |
0.02 |
|
$ |
0.07 |
|
$ |
(0.00 |
) |
$ |
0.19 |
|
||||
Diluted |
$ |
0.02 |
|
$ |
0.06 |
|
$ |
(0.00 |
) |
$ |
0.18 |
|
||||
Information Services Group, Inc. | ||||||||||||||||
Reconciliation from GAAP to Non-GAAP | ||||||||||||||||
(unaudited) | ||||||||||||||||
(in thousands, except per share amounts) | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|||||
Net income (loss) | $ |
1,148 |
|
$ |
3,201 |
|
$ |
(203 |
) |
$ |
9,025 |
|
||||
Plus: | ||||||||||||||||
Interest expense (net of interest income) |
|
1,382 |
|
|
1,429 |
|
|
3,971 |
|
|
4,391 |
|
||||
Income taxes |
|
1,734 |
|
|
1,591 |
|
|
1,782 |
|
|
4,680 |
|
||||
Depreciation and amortization |
|
1,598 |
|
|
1,526 |
|
|
4,724 |
|
|
4,692 |
|
||||
Interest accretion associated with contingent consideration |
|
7 |
|
|
26 |
|
|
66 |
|
|
77 |
|
||||
Change in contingent consideration |
|
(2,390 |
) |
|
- |
|
|
(2,390 |
) |
|
- |
|
||||
Acquisition-related cost (1) |
|
654 |
|
|
99 |
|
|
679 |
|
|
99 |
|
||||
Severance, integration and other expense |
|
586 |
|
|
674 |
|
|
4,263 |
|
|
2,016 |
|
||||
Foreign currency transaction loss |
|
30 |
|
|
2 |
|
|
24 |
|
|
40 |
|
||||
Non-cash stock compensation |
|
2,329 |
|
|
2,098 |
|
|
5,690 |
|
|
6,752 |
|
||||
Adjusted EBITDA | $ |
7,078 |
|
$ |
10,646 |
|
$ |
18,606 |
|
$ |
31,772 |
|
||||
Net income (loss) | $ |
1,148 |
|
$ |
3,201 |
|
$ |
(203 |
) |
$ |
9,025 |
|
||||
Plus: | ||||||||||||||||
Non-cash stock compensation |
|
2,329 |
|
|
2,098 |
|
|
5,690 |
|
|
6,752 |
|
||||
Intangible amortization |
|
738 |
|
|
769 |
|
|
2,230 |
|
|
2,352 |
|
||||
Interest accretion associated with contingent consideration |
|
7 |
|
|
26 |
|
|
66 |
|
|
77 |
|
||||
Change in contingent consideration |
|
(2,390 |
) |
|
- |
|
|
(2,390 |
) |
|
- |
|
||||
Acquisition-related cost (1) |
|
654 |
|
|
99 |
|
|
679 |
|
|
99 |
|
||||
Severance, integration and other expense |
|
586 |
|
|
674 |
|
|
4,263 |
|
|
2,016 |
|
||||
Write-off of deferred financing costs |
|
- |
|
|
- |
|
|
- |
|
|
379 |
|
||||
Foreign currency transaction loss |
|
30 |
|
|
2 |
|
|
24 |
|
|
40 |
|
||||
Tax effect (2) |
|
(625 |
) |
|
(1,174 |
) |
|
(3,380 |
) |
|
(3,749 |
) |
||||
Adjusted net income | $ |
2,477 |
|
$ |
5,695 |
|
$ |
6,979 |
|
$ |
16,991 |
|
||||
Weighted average shares outstanding: | ||||||||||||||||
Basic |
|
48,940 |
|
|
48,711 |
|
|
48,743 |
|
|
48,542 |
|
||||
Diluted |
|
50,158 |
|
|
50,257 |
|
|
48,743 |
|
|
50,287 |
|
||||
Adjusted earnings per share: | ||||||||||||||||
Basic | $ |
0.05 |
|
$ |
0.12 |
|
$ |
0.14 |
|
$ |
0.35 |
|
||||
Diluted | $ |
0.05 |
|
$ |
0.11 |
|
$ |
0.14 |
|
$ |
0.34 |
|
||||
(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 | September 30, 2024 | Ended | currency | September 30, 2023 | ||||||||||||||
September 30, 2024 | impact | Adjusted | September 30, 2023 | impact | Adjusted | ||||||||||||||
Revenue | $ |
61,277 |
$ |
(326 |
) |
$ |
60,951 |
$ |
71,773 |
$ |
(4 |
) |
$ |
71,769 |
|||||
Operating income | $ |
4,294 |
$ |
(153 |
) |
$ |
4,141 |
$ |
6,223 |
$ |
47 |
|
$ |
6,270 |
|||||
Adjusted EBITDA | $ |
7,078 |
$ |
(170 |
) |
$ |
6,908 |
$ |
10,646 |
$ |
45 |
|
$ |
10,691 |
|||||
Nine Months | Nine Months | ||||||||||||||||||
Nine Months | Constant | Ended | Nine Months | Constant | Ended | ||||||||||||||
Ended | currency | September 30, 2024 | Ended | currency | September 30, 2023 | ||||||||||||||
September 30, 2024 | impact | Adjusted | September 30, 2023 | impact | Adjusted | ||||||||||||||
Revenue | $ |
189,808 |
$ |
(178 |
) |
$ |
189,630 |
$ |
224,868 |
$ |
237 |
|
$ |
225,105 |
|||||
Operating income | $ |
5,574 |
$ |
(292 |
) |
$ |
5,282 |
$ |
18,136 |
$ |
(119 |
) |
$ |
18,017 |
|||||
Adjusted EBITDA | $ |
18,606 |
$ |
(292 |
) |
$ |
18,314 |
$ |
31,772 |
$ |
(106 |
) |
$ |
31,666 |
|||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20241107984824/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.
FAQ
What were ISG's (III) Q3 2024 revenue and earnings?
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