Third quarter 2026
Filed Nov 2, 2026Information 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.