Information Services Group Inc. (III): Results of Operations and Financial Condition
Information Services Group Inc. (III) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 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 Information Services Group Announces Third-Quarter 2026 Results ● Reports third-qu
How this was made
The 30-second read
Why it matters
The earnings beat and dividend increase provide fresh guidance that could influence short‑term trading.
Market read
III's better‑than‑expected earnings and higher dividend may attract income‑focused investors and AI sector interest.
What to watch
FX fluctuations and macro‑economic headwinds could temper profit margins.
Information Services Group Announces Third-Quarter 2026 Results
Third-quarter GAAP revenue rose 4.4%, GAAP net income increased 10.3%, adjusted EBITDA increased 19%, and adjusted EBITDA margin expanded to 15.4%. Cash from operations reached $12.3 million, while fourth-quarter revenue and adjusted EBITDA guidance calls for continued year-over-year growth.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Revenue, three months ended September 30GAAP | $65.11M | – | up 4.4 percent |
| Direct costs and expenses for advisors, three months ended September 30GAAP | $36.55M | – | – |
| Selling, general and administrative expense, three months ended September 30GAAP | $21.04M | – | – |
| Depreciation and amortization, three months ended September 30GAAP | $1.07M | – | – |
| Operating income, three months ended September 30GAAP | $6.45M | – | – |
| Interest income, three months ended September 30GAAP | $33K | – | – |
| Interest expense, three months ended September 30GAAP | −$909K | – | – |
| Gain on the sale of business, three months ended September 30GAAP | — | – | – |
| Foreign currency transaction gain (loss), three months ended September 30GAAP | $275K | – | – |
| Income before taxes, three months ended September 30GAAP | $5.85M | – | – |
| Income tax provision, three months ended September 30GAAP | $2.48M | – | – |
| Net income, three months ended September 30GAAP | $3.37M | – | up 10.3% |
| Basic earnings per share, three months ended September 30GAAP | $0.07 | – | – |
| Diluted earnings per share, three months ended September 30GAAP | $0.07 | – | up 10.2% |
| Adjusted EBITDA, three months ended September 30non-GAAP | $9.99M | – | up 19 percent |
| Adjusted EBITDA margin, three months ended September 30non-GAAP | 15.4 percent | – | – |
| Adjusted net income, three months ended September 30non-GAAP | $5.03M | – | – |
| Adjusted basic earnings per share, three months ended September 30non-GAAP | $0.10 | – | – |
| Adjusted diluted earnings per share, three months ended September 30non-GAAP | $0.10 | – | up 7.5% |
| Revenue, nine months ended September 30GAAP | $191.8M | – | – |
| Direct costs and expenses for advisors, nine months ended September 30GAAP | $104.9M | – | – |
| Selling, general and administrative expense, nine months ended September 30GAAP | $66.41M | – | – |
| Depreciation and amortization, nine months ended September 30GAAP | $3.17M | – | – |
| Operating income, nine months ended September 30GAAP | $17.32M | – | – |
| Interest income, nine months ended September 30GAAP | $92K | – | – |
| Interest expense, nine months ended September 30GAAP | −$2.68M | – | – |
| Gain on the sale of business, nine months ended September 30GAAP | — | – | – |
| Foreign currency transaction gain (loss), nine months ended September 30GAAP | $680K | – | – |
| Income before taxes, nine months ended September 30GAAP | $15.41M | – | – |
| Income tax provision, nine months ended September 30GAAP | $6.03M | – | – |
| Net income, nine months ended September 30GAAP | $9.38M | – | – |
| Basic earnings per share, nine months ended September 30GAAP | $0.20 | – | – |
| Diluted earnings per share, nine months ended September 30GAAP | $0.19 | – | – |
| Adjusted EBITDA, nine months ended September 30non-GAAP | $27.63M | – | – |
| Adjusted net income, nine months ended September 30non-GAAP | $14.25M | – | – |
| Adjusted basic earnings per share, nine months ended September 30non-GAAP | $0.30 | – | – |
| Adjusted diluted earnings per share, nine months ended September 30non-GAAP | $0.28 | – | – |
| Revenue at constant currency, three months ended September 30non-GAAP | $64.95M | – | – |
| Operating income at constant currency, three months ended September 30non-GAAP | $6.03M | – | – |
| Adjusted EBITDA at constant currency, three months ended September 30non-GAAP | $9.58M | – | – |
| Revenue at constant currency, nine months ended September 30non-GAAP | $189.1M | – | – |
| Operating income at constant currency, nine months ended September 30non-GAAP | $15.88M | – | – |
| Adjusted EBITDA at constant currency, nine months ended September 30non-GAAP | $26.11M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| AmericasNo specific regional driver was provided. | $41.9M | – | down 1 percent on a reported basis |
| EuropeNo specific regional driver was provided. | $17M | – | up 6 percent on a reported basis |
| Asia PacificReturn to growth in Asia Pacific. | $6.2M | – | up 47 percent on a reported basis |
Fourth quarter 2026 outlook
- Revenuebetween $64 million and $65 million
- NoteAdjusted EBITDA of between $9 million and $10 million
Capital returns
- Returned $6.9 million to shareholders through share repurchases ($4.5 million) and dividends ($2.4 million) during the third quarter.
- Fourth-quarter dividend of $0.045 per share, payable on December 18, 2026, to shareholders of record as of December 4, 2026.
What drove it
- AI-related revenues reached over $30 million for the first time.
- Recurring revenues were up 7 percent.
- Asia Pacific revenue was up 47 percent on a reported basis.
- Adjusted EBITDA margin was 15.4 percent, described as the highest quarterly margin in four years.
- Management cited research that informs choices, advisory execution that secures outcomes for enterprises and governance that sustains value.
Concerns
- Americas revenue was down 1 percent on a reported basis.
- Management stated that it continuously monitors the macroeconomic environment, including the impact of FX, inflation and other factors.
- The company identified risks including failure to secure new engagements, client delays or reductions in engagement scope, competition, hiring and retention, currency fluctuations, and trade-policy changes.
What to watch
- Fourth-quarter revenue guidance of between $64 million and $65 million.
- Fourth-quarter adjusted EBITDA guidance of between $9 million and $10 million.
- Whether Asia Pacific growth and AI-related revenue continue to offset the reported decline in the Americas.
- Sustainability of the 15.4 percent adjusted EBITDA margin.
- Cash generation and shareholder-return activity following $4.5 million of third-quarter share repurchases and $2.4 million of dividends.
Balance sheet and cash flow
- Generated cash from operations of $12.3 million in the third quarter, its highest amount in five years.
- Cash balance totaled $28.5 million at September 30, 2026, up 20 percent from $23.7 million at June 30, 2026.
- Third-quarter foreign currency impact was $157 thousand for revenue, $422 thousand for operating income and $412 thousand for adjusted EBITDA.
- Nine-month foreign currency impact was $2,691 thousand for revenue, $1,445 thousand for operating income and $1,518 thousand for adjusted EBITDA.
Analysis
ISG reported third-quarter GAAP revenue of $65.1 million, up 4.4 percent from $62.4 million in the prior year. Regional performance was uneven: Americas revenue was down 1 percent on a reported basis, while Europe increased 6 percent and Asia Pacific increased 47 percent. Management attributed revenue momentum to the return to growth in Asia Pacific, AI-related revenue reaching over $30 million for the first time and recurring revenue growth of 7 percent.
Profitability improved faster than revenue. GAAP operating income was $6.5 million compared with $4.6 million in the prior-year quarter, while GAAP net income rose to $3.4 million from $3.1 million. Adjusted EBITDA was $10.0 million, up 19 percent, and the adjusted EBITDA margin increased to 15.4 percent from 13.5 percent. Management described the 15.4 percent margin as its highest quarterly margin in four years.
Cash generation was a notable feature of the period. Cash from operations was $12.3 million, characterized as the highest amount in five years, and cash totaled $28.5 million at September 30, 2026, up 20 percent from $23.7 million at June 30, 2026. ISG returned $6.9 million to shareholders during the quarter, including $4.5 million in share repurchases and $2.4 million in dividends, and declared a $0.045 per-share fourth-quarter dividend.
For the fourth quarter, management targets revenue between $64 million and $65 million and adjusted EBITDA between $9 million and $10 million. The guide is framed as continuing year-over-year growth, but the filing does not provide the prior fourth-quarter guidance or a GAAP reconciliation for forward adjusted EBITDA. Key reported factors for the outlook are market conditions, FX, inflation and other macroeconomic conditions, alongside the company's AI advisory and AI-powered platform focus.
Management, verbatim
ISG delivered a robust financial performance in the third quarter, with strong cash generation, expanding margins and solid revenue growth.
Michael P. Connors, chairman and CEO
Revenue in the quarter was driven by a return to growth in Asia Pacific, up 47 percent; AI-related revenues reaching over $30 million for the first time and recurring revenues continuing to build, up 7 percent.
Michael P. Connors, chairman and CEO
Considering both market conditions and the strength of our portfolio, ISG is targeting fourth-quarter revenues between $64 million and $65 million and adjusted EBITDA of between $9 million and $10 million, continuing our year-over-year growth.
Michael P. Connors, chairman and CEO
Not in the filing
stated, not guessed- Prior-quarter revenue, operating income, net income, EPS, adjusted EBITDA and segment revenue comparisons
- Gross profit and gross margin
- Free cash flow
- Debt balance
- Detailed balance-sheet liabilities and total liquidity
- Reported effective tax rate
- Fourth-quarter gross-margin, operating-expense and tax-rate guidance
- Previous-quarter outlook needed to compare actual third-quarter results with prior guidance
- GAAP reconciliation for forward-looking adjusted EBITDA guidance
- Specific operating drivers for Americas and Europe revenue
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
III is a Nasdaq‑listed AI‑centered technology research and advisory firm releasing its Q3 2026 results via an 8‑K filing.
Ticker impact
III reported Q3 2026 GAAP revenue of $65.1 million, up 4.4% YoY and beat guidance, with GAAP EPS of $0.07 and a $0.045 dividend.
likely upward pressure as investors price in better-than-expected results and higher dividend.
The earnings beat and dividend increase are fresh primary disclosures; the company is a micro‑cap, so moves may be modest but still actionable.
Market effects
AI‑focused research and advisory services may see heightened demand after III's revenue growth in AI.
US
moderate
Counterpoint
The stock may already be priced in; any upside could be limited.
Key entities
- companyInformation Services Group Inc.
Issuer of the earnings release.
- executiveMichael P. Connors
Chairman and CEO who commented on the results.
