What changed in Information Services Group Inc.'s 10-K — 2024 vs 2025
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Paragraph-level year-over-year comparison of Information Services Group Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.
+219 added−194 removedSource: 10-K (2026-03-06) vs 10-K (2025-03-13)
Top changes in Information Services Group Inc.'s 2025 10-K
219 paragraphs added · 194 removed · 130 edited across 9 sections
- Item 1. Business+67 / −75 · 35 edited
- Item 1A. Risk Factors+75 / −39 · 37 edited
- Item 7. Management's Discussion & Analysis+52 / −56 · 37 edited
- Item 5. Market for Registrant's Common Equity+9 / −9 · 7 edited
- Item 7A. Quantitative and Qualitative Disclosures About Market Risk+7 / −7 · 7 edited
Item 1. Business
Business — how the company describes what it does
35 edited+32 added−40 removed19 unchanged
Item 1. Business
Business — how the company describes what it does
35 edited+32 added−40 removed19 unchanged
2024 filing
2025 filing
Biggest changeWe seek to drive our service portfolio and relationships with clients further into AI-centered Technology Advisory Services, including Business Advisory Services, AI-Centered Technology Strategy, Data & Analytics, IT Transition Services, Organizational Change Management (OCM) and Network & Software Advisory. These are all areas in which we are investing in an attempt to drive increased revenue and expand client relationships.
Biggest changeWe seek to evolve our capabilities and offerings to align to the constantly evolving technology landscape and the future needs of our clients. ISG invests in a portfolio of future offerings with the objective of evolving our service portfolio and relationships with clients further into AI-centered Advisory, Organizational Change Management (OCM), Training-as-a-Service (TaaS) and Software Advisory.
It should not be relied upon for investment purposes, nor is it incorporated by reference into this Annual Report on Form 10-K or any other filings. Our Company was founded with the strategic vision to become a high-growth, leading provider of information-based advisory services.
It should not be relied upon for investment purposes, nor is it incorporated by reference into this Annual Report on Form 10 K or any other filings. Our Company was founded with the strategic vision to become a leading, high-growth provider of information-based advisory services.
The U.S. public sector, particularly state governments, local municipalities and higher education, presents a significant opportunity to ISG. Systems are typically outdated, maintenance is expensive and the workforce charged with maintenance is aging. There is a need to refurbish systems to reduce the cost of operations (particularly because governments’ tax revenues are under pressure).
The U.S. public sector, particularly state governments, local municipalities and higher education, presents a significant opportunity for ISG. Systems are typically outdated, maintenance is expensive and the workforce charged with maintenance is aging. There is a need to refurbish systems to reduce the cost of operations (particularly because governments’ tax revenues are under pressure).
Item 1. Business Unless the context otherwise requires, Information Services Group, Inc., the registrant, is referred to in this Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the “Form 10-K”) as the “Company,” “ISG”, “we,” “us” and “our.” Our Company Information Services Group, Inc. (Nasdaq: III) is a global AI-centered technology research and advisory firm.
Item 1. Business Unless the context otherwise requires, Information Services Group, Inc., the registrant, is referred to in this Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the “Form 10-K”) as the “Company,” “ISG”, “we,” “us” and “our.” Our Company Information Services Group, Inc. (Nasdaq: III) is a global AI-centered technology research and advisory firm.
These advisors leverage extensive practical expertise derived from experiences in corporate leadership, consulting, research, financial analysis, contract negotiations and operational service delivery. All employees are required to execute confidentiality, conflict of interest and intellectual property agreements as a condition of employment. There are no collective bargaining agreements covering any of our employees.
These advisors leverage extensive practical expertise derived from experiences in corporate leadership, consulting, research, financial analysis, contract negotiations and operational service delivery. 9 Table of Contents All employees are required to execute confidentiality, conflict of interest and intellectual property agreements as a condition of employment. There are no collective bargaining agreements covering any of our employees.
We are organized as a corporation under the laws of the State of Delaware. The current mailing address of the Company’s principal executive office is Information Services Group, Inc., 2187 Atlantic Street, Stamford, CT 06902. Our telephone number is (203) 517-3100.
We are organized as a corporation under the laws of the State of Delaware. The current mailing address of the Company’s principal executive office is Information Services Group, Inc., 400 Atlantic Street, Stamford, CT 06901. Our telephone number is (203) 517-3100.
The firm, founded in 2006, is known for its proprietary market data, in-depth knowledge of provider ecosystems, and the expertise of its more than 1,300 professionals worldwide working together to help clients maximize the value of their technology investments. For more information, visit www.isg-one.com. The content on our website is available for informational purposes only.
The firm, founded in 2006, is known for its proprietary market data and research, in-depth knowledge and governance of provider ecosystems, and the expertise of its approximately 1,500 professionals worldwide working together to help clients maximize the value of their technology investments. For more information, visit www.isg-one.com. The content on our website is available for informational purposes only.
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 sourcing that is now focused on leveraging AI to help organizations achieve operational excellence and faster growth.
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.
Employees As of December 31, 2024, we employed 1,323 people worldwide, of which 1,289 are full-time employees. Our employee base includes executive management, service leads, partners, directors, advisors, analysts, technical specialists and functional support staff. We recruit advisors from service providers and consulting firms with direct operational experience.
Employees As of December 31, 2025, we employed 1,290 people worldwide, of which 1,254 are full-time employees. Our employee base includes executive management, service leads, partners, directors, advisors, analysts, technical specialists and functional support staff. We recruit advisors from service providers and consulting firms with direct operational experience.
Based on ISG’s 25 years of managing relationships on behalf of our clients, we have a unique and robust dataset that enables ISG to partner with clients to deliver improvements to their business processes and to benchmark the performance of their operations to the broader market.
Based on ISG’s 25 years of managing relationships on behalf of clients, we have a robust dataset that enables us to partner with clients to deliver improvements to their business processes and to benchmark the performance of their operations against the broader market.
ISG GovernX leverages AI to automate the management of third-party supplier relationships, including contract and project lifecycles and risk management. Enterprises leverage the platform to deliver more value from their outsourcing spend. ISG GovernX users can easily manage new contracts and proactive renewals, make timely amendments and handle contract terminations—all on one platform.
GovernX leverages AI to support automation across the management of third-party supplier relationships, including contract and project lifecycles and risk management. Enterprises leverage the platform to deliver more value from their outsourcing spend. GovernX users can manage new contracts and proactive renewals, make timely amendments and handle contract terminations on one platform.
We believe we are well-positioned as a third party, objective advisor with no affiliation to the software providers. ISG will continue to invest in the evolution of these services, with an aim to drive increased AI adoption, greater profitability and even more value for our clients. ● Consider Acquisitions and Other Growth Opportunities.
We 7 Table of Contents believe we are well positioned as a third-party, objective advisor with no affiliation to the software providers. ISG will continue to invest in the evolution of these services, with an aim to drive increased AI adoption, greater profitability and even more value for our clients. Scale Our Emerging Services.
Our ISG Academy is robust in offering learning in such topics specific to the employee’s industry and functional areas, leadership and people management, certifications and software and technical skills, among others.
Our ISG Academy is robust in offering learning in such topics specific to the employee’s industry and functional areas, leadership and people management, certifications and software and technical skills, among others. In 2025, substantially all learning and development activities were delivered virtually.
While we have made progress in our workforce diversity representation, we seek to continually improve in this area. ISG WorkLife We have also introduced ISG WorkLife, which is a series of progressive, best practice, Next-Gen HR offerings designed to improve the quality of our employees’ work-life experience, while helping us achieve our firm-wide objectives.
To make this happen, we have certain programs, training, policies and practices in place, including the following: ISG WorkLife We have also introduced ISG WorkLife, which is a series of progressive, best practice, Next-Gen HR offerings designed to improve the quality of our employees’ work-life experience, while helping us achieve our firm-wide objectives.
Our voluntary advisor turnover rate has ranged between 12% and 15% over the last three years. Human Capital Management ISG strives to employ the brightest, most innovative people in the industry, so that we can provide world-class solutions to our clients.
Our voluntary advisor turnover rate has ranged between 11% and 13% over the last three years. Human Capital Management ISG strives to employ the brightest, most innovative people in the industry, so that we can provide world-class solutions to our clients. Employees at ISG are anchored in our core values, which include trust, integrity, respect, passion, entrepreneurship, balance and mentorship.
To meet these needs, we formed two global client solution areas: ISG Digital, focused on developing technology, transformation, sourcing and digital solutions for clients, and ISG Enterprise, focused on helping clients manage change and optimize operations in such areas as finance, human resources (“HR”) and training.
To meet these needs, ISG operates through two global client solution areas: ISG Digital , which focuses on developing technology, transformation, sourcing, and digital solutions; and ISG Enterprise , which helps clients manage change and optimize core operations across information technology, finance, human resources, and training.
We will consider and may pursue opportunities to enter joint ventures and to buy or combine with other businesses. 8 Table of Contents Our Proprietary Data Assets and Market Intelligence One of our core assets is the information, data, analytics, methodologies and other intellectual property we possess.
We will evaluate and may actively pursue joint ventures, mergers, and acquisitions with other organizations. Our Proprietary Data Assets and Market Intelligence One of our core assets is the information, data, analytics, methodologies and other intellectual property we possess.
This offering provides clients a strategic and disciplined approach to supplier relationship and large contract management. Our suite of offerings includes supplier performance improvement, reducing spend, third-party risk mitigation, and supplier-based management.
We continue to expand our Supplier and Contract Management capabilities powered by our GovernX® platform, a recognized vendor compliance and risk management solution. This offering provides clients with a strategic and disciplined approach to supplier relationships and large contract management. Our suite of offerings includes supplier performance improvement, reducing spending, third-party risk mitigation and supplier-based management.
Attracting, developing and retaining talented people in advisory, research and other positions is critical to executing on our strategy. Our ability to compete effectively depends upon a number of factors, including learning opportunities, compensation/benefits, work environment, career opportunities and a culture of inclusivity.
Our ability to compete effectively depends upon a number of factors, including learning opportunities, compensation/benefits, work environment, career opportunities and a culture of inclusivity.
The platform allows for integration with other enterprise applications, such as ServiceNow, and is tightly connected to ISG Research offerings, such as contract benchmarks, assessments and total-cost-of-ownership evaluations. Additionally, ISG GovernX clients can mitigate supply chain risks and ensure business continuity by reviewing and validating their providers’ business and IT continuity plans and procedures.
The platform integrates with enterprise applications, such as ServiceNow, and is connected to ISG Research offerings, including contract benchmarks, assessments and total-cost-of-ownership evaluations. Additionally, GovernX clients can mitigate supply chain risks and support business continuity through integrated data feeds and real-time alerts. ISG Tango .
In 2024, most learning was virtual; there were over 1,300 digital certified professionals that participated in various sessions, which average 12 hours of training per professional that has been devoted to learning and development. Available Information Our Internet address is www.isg-one.com . The content on our website is available for informational purposes only.
Our digital certified professionals participated in more than 20,000 aggregate training hours across various programs, representing an average of approximately 15 hours of training per professional devoted to learning and development during the year. Available Information Our Internet address is www.isg-one.com . The content on our website is available for informational purposes only.
Stockholders may request free copies of these documents, including our Annual Report to Stockholders, by writing to Information Services Group, Inc., 2187 Atlantic Street, Stamford, CT 06902, Attention: Michael A. Sherrick, or by calling (203) 517-3100. Our annual and quarterly reports and other information statements are also available to the public through the SEC’s website at www.sec.gov .
Sherrick, or by calling (203) 517-3100. 10 Table of Contents Our annual and quarterly reports and other information statements are also available to the public through the SEC’s website at www.sec.gov .
Our ISG Tango sourcing platform is a unique, AI embedded, comprehensive solution that enables enterprises and public sector organizations to quickly evaluate their business requirements, identify desired outcomes, fast-track the provider identification and selection process, collaborate with providers on developing the right solution, get to a signed contract and transition operations faster than before. ISG continues to expand our Supplier and Contract Management capabilities powered by our GovernX® platform, a market leading vendor compliance and risk management digital solution.
Our ISG Tango sourcing platform is an AI-embedded solution that enables enterprises and public sector organizations to quickly evaluate business requirements, identify desired outcomes, accelerate provider identification and selection, collaborate with providers on developing the right solution.
Employees at ISG are anchored in our core values, which include trust, integrity, respect, diversity, passion, entrepreneurship, balance and mentorship. Our more than 1,300 employees, located in over 20 countries with more than one-fourth in the United States, perform a variety of different roles. We are participants in the competitive research and advisory industries.
Our almost 1,300 employees, located in over 20 countries with more than one-fourth in the United States, perform a variety of different roles. We are participants in the competitive research and advisory industries. Attracting, developing and retaining talented people in advisory, research and other positions is critical to executing on our strategy.
We expect the trend toward operational efficiency led by the accelerating adoption of AI-based technologies to play an increasing role in the demand for our services. We plan to leverage our proprietary operating platform (Tango) to serve the growing number of private and public sector organizations utilizing outside advisors when undertaking cost optimization and transformation programs.
We plan to leverage our proprietary operating platform (Tango) to serve the growing number of private and public sector organizations utilizing outside advisors when undertaking cost optimization and transformation programs. We are focused on growing our existing client base by offering integrated solutions that combine our multiple services and capabilities.
In addition to serving enterprises, ISG research also helps providers navigate the marketplace through market intelligence, client retention programs, pursuit assessments and client satisfaction benchmarking. ● Expand “Recurring Revenue Streams.” These include such annuity-based ISG offerings as ISG GovernX, ISG Research Lens, ISG Inform and multi-year Public Sector contracts.
In addition, leveraging Tango and our iFlex global delivery capability, we will continue to expand our market reach to address the underserved, middle-market clients. Expand “Recurring Revenue Streams.” Our recurring revenue streams include such annuity-based ISG offerings as ISG GovernX, ISG Research Lens, ISG Inform and multi-year Public Sector contracts.
In our pursuit of the Company’s growth initiatives, we are committed to maintaining a strong financial position with flexibility and liquidity. The priorities for uses of available cash include funding growth, payment of dividends, share repurchases and debt reduction.
As the Company pursues new growth strategies, we remain committed to maintaining a strong financial foundation with both flexibility and liquidity. Our main priorities for available cash are investing in growth, paying dividends, buying back shares, and lowering debt.
Our Services ISG specializes in digital transformation services, including sourcing advisory, cloud and data analytics; managed governance and risk services; network carrier services; technology strategy and operations design; change management; market intelligence and technology research and analysis. ISG supports both private and public sector organizations to transform and optimize their operational environments.
Our Services ISG is a leading global provider of digital transformation and technology advisory services, helping organizations optimize performance, reduce costs, and accelerate innovation. Our expertise spans sourcing advisory, cloud and data analytics, managed governance and risk services, network and software advisory, technology strategy and operations design, change management, and market intelligence.
The Company’s operating model is aimed at extending our market leadership, enhancing growth opportunities and driving significant value for all stakeholders. We provide services that address our clients’ most pressing business challenges in two areas we believe are most important to them—their continuing digital transformation and getting the most from their digital investments.
The Company’s operating model is designed to extend our market leadership, enhance growth opportunities, and deliver long-term value to all stakeholders. We believe that our services address clients’ most critical priorities—advancing their digital transformation journeys and maximizing the return on their digital investments.
These programs, and others under ISG WorkLife, provide employees with the opportunity to pursue these activities. This allows us to attract and retain productive employees and enhance diverse perspectives. Environmental Social and Governance (ESG) The ISG Environmental Social and Governance program was developed with corporate commitment and accountability on a global level in mind.
These programs, and others under ISG WorkLife, provide employees with the opportunity to pursue these activities. This allows us to attract and retain productive employees and enhance diverse perspectives. Learning ISG’s success depends on the knowledge and productivity of our employees. To that end, the Company invests a significant amount of time and money into providing development opportunities.
Our core solutions are supported by ISG Research, with its extensive market analyses and provider evaluations, our ISG Network and Software Advisory services and our software platforms, including ISG GovernX® and ISG Tango.
Our core solutions are supported by ISG Research , which provides extensive market analyses, provider evaluations, and data-driven insights; the ISG Network and Software Advisory portfolio; and our proprietary digital platforms— ISG GovernX® , ISG Inform™ , and ISG Tango —that enable clients to improve supplier management, benchmark operational performance, and accelerate sourcing decisions.
In addition to monitoring the operational performance and financial viability of their suppliers, ISG GovernX helps enterprises address a range of other internal and external risks, from data security and regulatory issues, to adverse environmental, health and geopolitical events, to social responsibility, diversity and inclusion considerations. We continue to invest in ISG Inform™ 2.0, an enhanced version of our data-as-a-service solution that provides benchmarking capability to track digital transformation and application development maturity and performance against industry peers.
Through our advisory and platform-enabled sourcing work, we influence billions of total contract value each year across services, software and cloud. ISG Inform. We continue to invest in ISG Inform™ 2.0, an enhanced version of our data-as-a-service solution that provides benchmarking capability to track digital transformation and application development maturity and performance against industry peers.
We also continue to build more industry-specific capabilities in such areas as banking, insurance and smart manufacturing. 5 Table of Contents Every client engagement passes through our dedicated Solution Hub to bring the best thinking, tools and capabilities to bear to solve client challenges.
These offerings are increasingly enhanced with AI capabilities that deliver automation, analytics, and decision support across engagements. We continue to expand our industry-specific expertise in areas such as banking, insurance, and smart manufacturing. 5 Table of Contents Every client engagement leverages our Solution Hub , which integrates ISG’s global knowledge base, tools, and intellectual property to deliver tailored solutions.
We plan to continue to invest in and strengthen our market-facing organization to drive increased revenue targeting nine global industries: Banking and Financial Services, Consumer Services, Energy and Utilities, Health Sciences, Insurance, Manufacturing, Media and Technology Software and Services, Private Equity and Public Sector. ● Expand Our Offering Focus.
We have designated nine global sectors—Banking and Financial Services, Consumer Services, Energy and Utilities, Health Sciences, Insurance, Manufacturing, Media and Technology Software and Services, Public Sector, and Private Equity—as priorities for focused account leadership and in-depth solutions. Consider Acquisitions and Other Growth Opportunities. The business services, information, and advisory market is characterized by considerable fragmentation.
The business services, information and advisory market is highly fragmented. We believe we are well-positioned to leverage our leading market positions and strong brand recognition to expand through acquisitions and other growth opportunities. Acquiring firms with complementary services and products would allow us to further develop and broaden our service offerings and domain expertise.
Our established market leadership and strong brand recognition position us advantageously to grow through strategic acquisitions and other expansion opportunities. Integrating firms that offer complementary services and products would enable us to enhance and diversify our service portfolio as well as deepen our domain expertise.
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During periods of expansion or contraction, our services have helped organizations of all sizes across the globe address their most complex operational issues. The functional domain experience of our experts and deep empirical data resources allows clients to better understand their strategic options.
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We serve both private- and public-sector clients across the globe, supporting them through periods of expansion, consolidation, and transformation. By combining functional domain expertise with extensive empirical data and proprietary market intelligence, we enable clients to make informed strategic decisions and achieve measurable business outcomes.
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Integrated solutions are then delivered through our ISG iFlex™ global delivery model, which enables us to rapidly deploy our resources to support clients, regardless of geography or time zone. Our Competitive Advantages We believe that the following strengths differentiate us from our competition: · Independence and Objectivity . We are not an information technology or business process outsourcing service provider.
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Engagements are executed through our ISG iFlex™ global delivery model, which enables the efficient deployment of resources worldwide, ensuring consistent quality, scalability, and responsiveness across time zones and geographies. Our Competitive Advantages We believe that ISG’s long-term strategy is supported by the following set of durable competitive advantages that reinforce our market position and ability to execute effectively: ● Independence and Objectivity ISG operates solely as a technology and business advisory firm, maintaining independence from vendors and service providers.
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Rather, we are an independent, fact-based data, analytics and advisory firm with no material conflicting financial or other interests. This enables us to maintain a trusted advisor relationship with our clients through our unbiased focus and ability to align our interests with those of our clients. · Proprietary Data Assets and Market Intelligence.
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This objectivity allows us to deliver unbiased, fact-based advice that aligns with client interests and supports long-term trusted-advisor relationships . ● Proprietary Data Assets and Market Intelligence With over 30 years of benchmarking and sourcing experience, ISG has built a proprietary data repository encompassing millions of real-world data points.
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We have assembled a comprehensive and unique set of data, analytics and market intelligence built over more than 30 years of data collection and analysis, providing insight into the comparative cost and quality of a variety of operational alternatives. ● Domain Expertise.
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These assets inform our advisory, research, and platform solutions, enabling clients to make informed, data-driven decisions and benchmark performance against industry peers. ● Deep Domain and Industry Expertise Our consultants bring an average of more than 20 years of experience across technology, operations, and industry domains.
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Averaging over 20 years of experience, our strategic consulting teams bring a wealth of industry and domain-specific knowledge and expertise to address our clients’ most complex transformational needs. · Strong Brand Recognition. ISG continues to gain marketplace awareness as a leading brand in our industry. ISG offers integrated solutions to our clients. · Global Reach.
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This depth of expertise allows ISG to address complex digital transformation challenges and deliver customized, high-impact solutions. ● Recognized Brand and Integrated Solutions ISG is recognized globally as a leading advisory firm in digital transformation and technology research.
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We possess practical experience in global business operations, and we understand the significance of interconnected economies and companies. Our resources in the Americas, Europe and Asia Pacific make us a truly global advisory firm able to consistently serve the strategic and implementation needs of our clients.
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Our integrated service portfolio—spanning sourcing, strategy, analytics, governance, and change management—strengthens our client relationships and enhances our brand equity. ● Global Reach and Scalable Delivery Model Through our presence across the Americas, Europe, and Asia-Pacific, ISG delivers consistent, high-quality service worldwide.
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We believe the above strengths are central to our ability to successfully advise and support our clients to address any business challenge. Our Strategy We intend to use our competitive strengths to develop new services and products, sustain our growth and strengthen our existing market position by pursuing the following strategies: ● Preserve and Expand Our Market Share Positions.
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Our iFlex™ delivery model and Solution Hub enable scalable execution, agile resourcing, and seamless collaboration across geographies and time zones. We believe the above strengths are central to our ability to successfully advise and support our clients to address any business challenge.
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We are focused on growing our existing client base by offering integrated solutions that combine our multiple services and capabilities. In addition, we will seek to continue to expand our products and services, and the geographic markets we serve opportunistically as global competition spurs demand for cost savings and value creation. ● Preserve Our Financial Positions.
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Our Strategy ISG’s current strategy is to extend our global market leadership in digital transformation advisory by deepening our data, platform, and AI-enabled capabilities while broadening our recurring revenue base. Key priorities are as follows : Continue to Build on our Proprietary Data Sets and Market Intelligence.
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We expect our cash flow generation and solid balance sheet to support the firm’s current operating strategy . ● Strengthen Our Industry Expertise.
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Our key strength lies in the information, data, analytics, methods, and other intellectual property that we own. This foundation ensures our operational assessments, strategy planning, deal structuring, negotiations, and other advisory services remain truly independent.
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ISG plans to expand resources and intellectual property around AI-centered technologies.
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With each project, we aim to expand and refine our intellectual property, offering an ever-growing and distinctive source of information, data, and analytics for our clients. We use nearly 10 million real-world data points from benchmarking and sourcing contracts to enhance our advisory, benchmarking, and platform processes, giving us a unique advantage that's hard to duplicate.
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Our purpose in the marketplace is to be a trusted advisor, guiding our clients through their AI and technology transformations toward practical innovation of their business models, leveraging strategic partners, emerging technology and thought leadership. Our digital services now span a volume of offerings and have become embedded as part of our traditional transaction services.
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Our proprietary intellectual property is safeguarded by various legal and contractual measures. We are committed to protecting its value and enforcing our rights whenever necessary.
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We are now leveraging the advancements of AI into our digital services. For example, we continue to modernize our traditional sourcing services 6 Table of Contents to leverage AI, data and analytics to bring agility and nimbleness to the process of sourcing, RFPs and contracting.
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Consequently, we have established rigorous policies and procedures for the ownership, usage, and protection of intellectual property across all parties, including our employees. In today's AI-driven digital marketplace, ISG Research assists enterprises in addressing emerging challenges, preparing for future opportunities, and maintaining a competitive advantage.
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ISG GovernX includes real-time third-party risk management capabilities, including integrated data feeds and real-time alerts, which are increasingly important as provider ecosystems grow more complex, introducing more risk to the enterprise, and threats against supply-chain integrity become more diverse.
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ISG Research specializes in facilitating connections between technology buyers and sellers, including major services, cloud, and software providers. Our advisory services provide ISG Research with a comprehensive 6 Table of Contents view of the technology and sourcing landscape.
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Data and insights are drawn from the ISG total cost of ownership and sourcing databases. AI is fundamentally reshaping the way businesses work. It will allow companies to automate “high touch” functions and processes historically requiring human focus. ISG offers clients AI assessments and strategy. ● Expand Emerging Services .
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Our research encompasses traditional analyst coverage as well as direct feedback from market practitioners working with some of the largest enterprise clients on their transformation initiatives. ISG monitors over 180,000 unique technology service contracts and annually evaluates more than 4,000 service and software providers, offering valuable insights into pricing, capabilities, and provider stability.
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The focus will be on creating repeatable methods used to drive growth of emerging services, including AI, ISG Training-as-a-Service, ISG Network Select™, HR Technology & Transformations and ISG Research. 1. ISG AI: ISG is focused on influencing how our clients adopt Artificial Intelligence.
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When large organizations seek to assess potential partners, they rely on ISG Research for thorough evaluations of capabilities, pricing structures, breadth of offerings, and historical performance. With rapid advancements in technology, particularly artificial intelligence, ISG Research is well-equipped to guide enterprises in avoiding trends driven by hype and focusing on meaningful outcomes.
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As companies transform into AI-powered enterprises, ISG provides crucial buying advice, access to diverse AI technologies and niche implementors via a marketplace, and impartial governance solutions. By offering a comprehensive understanding of various AI providers and platforms, ISG helps companies make informed decisions that align with their specific needs. This strategic advice is essential in an ever-evolving AI landscape.
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Additionally, ISG Research supports providers in navigating the marketplace through market intelligence, client retention programs, pursuit assessments, and client satisfaction benchmarking. Continue to Invest in and Scale “Platform-Enabled” Solutions. We continue to develop and enhance our portfolio of platforms, namely ISG GovernX, ISG Tango and ISG Inform, which are critical to our delivery model. ISG GovernX®.
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ISG also assists clients in adapting to these changes by helping them reassess the value of their traditional IT operations and contracts with partners — in the context of AI-enhanced productivity. We believe that this reassessment or ‘marking to market’ is crucial for companies to realize the full benefits of AI integration. 2.
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Data and insights are drawn from the ISG total cost of ownership and sourcing databases. Preserve and Expand Our Market Share Positions. We expect the trend toward operational efficiency led by accelerating adoption of AI-based technologies to play an increasing role in the demand for our services.
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Training-as-a-Service (TaaS): ISG offers training-as-a-service (TaaS) and outsourced managed learning services for organizations with limited resources and growing demand for custom learning content and digital learning platforms. These organizations are typically looking for longer-term training support to address the needs of an evolving workforce.
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These are all areas in which we are investing in an attempt to drive increased revenue and expand client relationships. 1. AI Advisory Services: ISG partners with clients throughout their AI adoption journey, providing comprehensive assessments of opportunities and readiness across data, talent, operating models, security, and responsible-AI frameworks. We develop multi-year strategic roadmaps encompassing governance, milestones, and value objectives.
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ISG TaaS uses an agile approach with rapid content development tools to accelerate training content and digital adoption platforms (DAP) to integrate learning into the daily flow of work. Services include training advisory, analysis, strategy, custom development, delivery support, learning software subscription models, learning administration and learning assessment. 3.
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ISG’s AI Advisory offers unbiased procurement guidance and access to a targeted network of AI platforms and specialized implementation partners, as well as optimization of legacy services and external contracts for enhanced AI-driven efficiency.
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ISG Network Select: This offering helps streamline and simplify how enterprises build their network solutions. It enables ISG to address the growing demand for such leading-edge networking solutions as software-defined networking (SD-WAN, SD-LAN), SD security services, 5G mobility, unified communications-as-a-service (UCaaS) and call center-as-a- 7 Table of Contents service (CCaaS) — which are all critical to enterprise transformation.
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Implementation is overseen through rigorous program management that monitors key performance indicators (KPIs), risks, and controls; progress, realized value, and recommended next steps are communicated to management via regular dashboards and board-level updates. 2.
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Client demand for networks that are secure, interconnected, interoperable and profitable is rising, as are concerns over security, scale, cost and the complexity of the expanding Internet of Things landscape. ISG Network Select is designed to help clients find the best solutions, faster, to power their digital transformation initiatives.
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Organizational Change Management (OCM): ISG offers OCM services designed to help clients align their organizations with the overall transformation journey, a role that becomes even more vital as AI-enabled change expands the scope of business process and workforce transformation. Our approach reduces uncertainty, resistance and costly turnover by focusing on stakeholder management, targeted communications, organizational alignment, and training enablement.
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Clients get access to detailed and current data on their vendor and technology options and insights to help negotiate better pricing. 4. HR Technology & Transformations: Advances in AI-centric technologies are transforming the business of HR.
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We establish a clear organizational baseline—mapping structure, spans, layers, and roles—then design the target operating model to support technology programs, clarifying changes to structure, roles, decision rights, incentives and performance measures. Our comprehensive change plans cover stakeholder engagement, communications, leadership alignment, capability building, training and adoption support.
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From intuitive and mobile self-service software to predictive analytics and integrated talent management suites, technological solutions are changing the way leaders acquire, develop and engage their employees. New applications, enhanced functionality and competition among software providers make it difficult to stay on top of this ever-evolving space.
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Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
37 edited+38 added−2 removed111 unchanged
Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
37 edited+38 added−2 removed111 unchanged
2024 filing
2025 filing
Biggest changeIn the future, we plan to pursue additional acquisitions and investments as opportunities arise. We may not be able to successfully integrate businesses that we acquire in the future without substantial expense, delays or other operational or financial problems. In addition, we may not be able to identify, acquire or profitably manage additional businesses.
Biggest change(“Martino & Partners”), a strategic advisory firm serving public and private sector clients in Italy, on September 1, 2025. In the future, we plan to pursue additional acquisitions and investments as opportunities arise. We may not be able to successfully integrate businesses that we acquire in the future without substantial expense, delays or other operational or financial problems.
Artificial Intelligence (“AI”) presents new risks and challenges that may affect our business. We have made, and expect to continue to make, investments to integrate AI and machine learning technology into our services. Given the nature of AI technology, we face significant competition from other companies and an evolving regulatory landscape.
Artificial intelligence presents new risks and challenges that may affect our business. We have made, and expect to continue to make, investments to integrate AI and machine learning technology into our services. Given the nature of AI technology, we face significant competition from other companies and an evolving regulatory landscape.
Failure to comply with these laws and self-regulatory codes may result in, among other things, civil and criminal liability, negative publicity, restrictions on further use of data and/or liability under contractual warranties.
Failure to comply with these laws and self-regulatory codes may result in, among other things, civil and criminal liability, negative publicity, restrictions on further use of data, fines, and/or liability under contractual warranties.
Various statutes and rules regulate conduct in areas such as privacy and data protection that may affect our collection, use, storage, and transfer of information both abroad and in the United States.
Various statutes and rules regulate conduct in areas such as privacy, data protection, and cybersecurity that may affect our collection, use, storage, and transfer of information both abroad and in the United States.
In such a situation, it is unlikely that we would be able to fulfill our obligations, repay the accelerated indebtedness or otherwise cover our fixed costs. As of December 31, 2024, the total principal outstanding under the 2023 Credit Agreement was $59.2 million.
In such a situation, it is unlikely that we would be able to fulfill our obligations, repay the accelerated indebtedness or otherwise cover our fixed costs. As of December 31, 2025, the total principal outstanding under the 2023 Credit Agreement was $59.2 million.
As a result of the substantial variable costs associated with the debt obligations, we expect that: ● a decrease in revenues will result in a disproportionately greater percentage decrease in earnings; ● we may not have sufficient liquidity to fund all of these variable costs if our revenues decline or costs increase; ● we may have to use our working capital to fund these variable costs instead of funding general corporate requirements, including capital expenditures; 11 Table of Contents ● we may not have sufficient liquidity to respond to business opportunities, competitive developments and adverse economic conditions; and ● our results of operations will be adversely affected if interest rates increase because, based on our current outstanding borrowings in the amount of $59.2 million as of December 31, 2024, a 1% increase in interest rates would result in a pre-tax impact on earnings of approximately $0.6 million per year.
As a result of the substantial variable costs associated with the debt obligations, we expect that: ● a decrease in revenues will result in a disproportionately greater percentage decrease in earnings; ● we may not have sufficient liquidity to fund all of these variable costs if our revenues decline or costs increase; ● we may have to use our working capital to fund these variable costs instead of funding general corporate requirements, including capital expenditures; ● we may not have sufficient liquidity to respond to business opportunities, competitive developments and adverse economic conditions; and ● our results of operations will be adversely affected if interest rates increase because, based on our current outstanding borrowings in the amount of $59.2 million as of December 31, 2025, a 1% increase in interest rates would result in a pre-tax impact on earnings of approximately $0.6 million per year.
If others were able to use our intellectual property or were to independently develop our methodologies or analytical tools, our ability to compete effectively and to charge appropriate fees for our services may be adversely affected. 15 Table of Contents We face competition and our failure to compete successfully could materially adversely affect our results of operations and financial condition.
If others were able to use our intellectual property or were to independently develop our methodologies or analytical tools, our ability to compete effectively and to charge appropriate fees for our services may be adversely affected. We face competition and our failure to compete successfully could materially adversely affect our results of operations and financial condition.
While losses on our fixed-fee contracts are rare, to the extent that an expenditure of additional resources is required on an engagement, this could reduce the profitability of, or result in a loss on, the engagement. 14 Table of Contents Our contracts with contingent-based revenue may cause unusual variations in our operating results.
While losses on our fixed-fee contracts are rare, to the extent that an expenditure of additional resources is required on an engagement, this could reduce the profitability of, or result in a loss on, the engagement. Our contracts with contingent-based revenue may cause unusual variations in our operating results.
Although we seek to prevent, detect, and investigate cybersecurity threats and incidents, and have taken steps to mitigate the likelihood of network security breaches, there can be no assurance that attacks by unauthorized users will not be attempted in the future or that our security measures will be effective.
Although we seek to prevent, detect, and investigate cybersecurity threats and incidents, and have taken steps to mitigate the likelihood of network security breaches, there can be no assurance that attacks by unauthorized users will not be attempted in the future or 20 Table of Contents that our security measures will be effective.
Our revenues and operating results may vary significantly from accounting period to accounting period due to factors including: 13 Table of Contents ● fluctuations in revenues earned on contracts; ● commencement, completion or termination of engagements during any particular period; ● additions and departures of key advisors; ● transitioning of advisors from completed projects to new engagements; ● seasonal trends; ● introduction of new services by us or our competitors; ● changes in fees, pricing policies or compensation arrangements by us or our competitors; ● strategic decisions by us, our clients or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments or changes in business strategy; ● global economic and political conditions and related risks, including acts of terrorism, war, such as the war in Ukraine and the conflict in the Middle East, pandemics, inflation, slowing growth, rising interest rates and recession; and ● conditions in the travel industry that could prevent our advisors from traveling to client sites.
Our revenues and operating results may vary significantly from accounting period to accounting period due to factors including: ● fluctuations in revenues earned on contracts; ● commencement, completion or termination of engagements during any particular period; ● additions and departures of key advisors; ● transitioning of advisors from completed projects to new engagements; ● seasonal trends; ● introduction of new services by us or our competitors; ● changes in fees, pricing policies or compensation arrangements by us or our competitors; ● strategic decisions by us, our clients or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments or changes in business strategy; ● global economic and political conditions and related risks, including acts of terrorism, war, pandemics, inflation, slowing growth, rising interest rates and recession; and ● conditions in the travel industry that could prevent our advisors from traveling to client sites.
If we encounter unexpected problems as we try to integrate an acquired firm into our 12 Table of Contents business, our management may be required to expend time and attention to address the problems, which would divert their time and attention from other aspects of our business. We have risks associated with dispositions.
If we encounter unexpected problems as we try to integrate an acquired firm into our business, our management may be required to expend time and attention to address the problems, which would divert their time and attention from other aspects of our business. We have risks associated with dispositions.
Pursuant to rules adopted by the SEC implementing Section 404 of the Sarbanes Oxley Act of 2002, we are required to assess the effectiveness of our internal control over financial reporting and provide a management report on our internal control over financial reporting 19 Table of Contents in all annual reports.
Pursuant to rules adopted by the SEC implementing Section 404 of the Sarbanes Oxley Act of 2002, we are required to assess the effectiveness of our internal control over financial reporting and provide a management report on our internal control over financial reporting in all annual reports.
Changes in these laws (including newly released interpretations of these laws by courts and regulatory bodies) may limit our client data access, use and disclosure, and may require increased expenditures by us or may dictate that we may not offer certain types of services.
Changes in these laws (including newly released interpretations of these laws by courts and regulatory bodies) 18 Table of Contents may limit our client data access, use and disclosure, and may require increased expenditures by us or may dictate that we may not offer certain types of services.
While we were in compliance with these covenants as of December 31, 2024, there can be no assurance that we will remain in compliance in the future.
While we were in compliance with these covenants as of December 31, 2025, there can be no assurance that we will remain in compliance in the future.
Our operating results are subject to the risks inherent in international business activities, including: ● tariffs and trade barriers; ● regulations related to customs and import/export matters; ● restrictions on entry visas required for our advisors to travel and provide services; ● tax issues, such as tax law changes and variations in tax laws as compared to the United States; ● cultural and language differences; ● an inadequate banking system; ● foreign exchange controls; ● restrictions on the repatriation of profits or payment of dividends; ● crime, strikes, riots, civil disturbances, pandemics, terrorist attacks and wars, such as the war in Ukraine and the conflict in the Middle East; ● nationalization or expropriation of property; ● law enforcement authorities and courts that are inexperienced in commercial matters; and ● deterioration of political relations with the United States.
Our operating results are subject to the risks inherent in international business activities, including: ● tariffs and trade barriers; ● regulations related to customs and import/export matters; ● restrictions on entry visas required for our advisors to travel and provide services; ● tax issues, such as tax law changes and variations in tax laws as compared to the United States; ● cultural and language differences; ● an inadequate banking system; ● foreign exchange controls; ● restrictions on the repatriation of profits or payment of dividends; ● crime, strikes, riots, civil disturbances, pandemics, terrorist attacks and wars; 17 Table of Contents ● nationalization or expropriation of property; ● law enforcement authorities and courts that are inexperienced in commercial matters; and ● deterioration of political relations with the United States.
If we cannot manage the risks associated with new service offerings effectively, we are unlikely to be successful in these efforts, which could harm our ability to sustain profitability. We may not have the ability to develop and offer the new services and products that we need to remain competitive.
If we cannot manage the risks associated with new service offerings effectively, we are unlikely to be successful in these efforts, which could harm our ability to sustain profitability. 15 Table of Contents We may not have the ability to develop and offer the new services and products that we need to remain competitive.
The DPDP shares many provisions with existing privacy laws, and ISG therefore anticipates that its existing processes already broadly align with the new law. However, like the GDPR, failure to comply with the DPDP may lead to substantial fines.
The DPDPA shares many provisions with existing privacy laws, and ISG therefore anticipates that its existing processes already broadly align with the law. However, like the GDPR, failure to comply with the DPDPA may lead to substantial fines.
The translation of our revenues into U.S. dollars, as well as our costs of operating internationally, may adversely affect our business, results of operations and financial condition. 17 Table of Contents Risks Related to Data, Cybersecurity and Confidential Information Data protection laws and self-regulatory codes may restrict our activities and increase our costs.
The translation of our revenues into U.S. dollars, as well as our costs of operating internationally, may adversely affect our business, results of operations and financial condition. Risks Related to Data, Cybersecurity and Confidential Information Data protection and emerging cybersecurity laws and self-regulatory codes may restrict our activities and increase our costs.
Macroeconomic Risks Our international operations expose us to a variety of risks that could negatively impact our future revenue and growth. Approximately 36% of our revenues for 2024 and 39% of our revenue for 2023 were derived from sales outside of the Americas.
Macroeconomic Risks Our international operations expose us to a variety of risks that could negatively impact our future revenue and growth. Approximately 34% of our revenues for 2025 and 36% of our revenues for 2024 were derived from sales outside of the Americas.
ISG is continuing to monitor the development of the EU’s ePrivacy Regulation and published guidelines to determine whether further action as required. To mitigate the risk and negative exposure of data outside ISG, we have put in place a data protection framework that includes policies, procedures, guidance and records.
ISG is also continuing to monitor the development of and public guidelines regarding the EU’s ePrivacy Regulation to determine whether further action is required. To mitigate the risk and negative exposure of data outside ISG, we have put in place a data protection framework that includes policies, procedures, guidance and records.
Additionally, 18 Table of Contents we could incur liability if a process we manage for a client was to result in internal control failures or impair our client’s ability to comply with their own internal control requirements.
Additionally, we could incur liability if a process we manage for a client was to result in internal control failures or impair our client’s ability to comply with their own internal control requirements.
We derive a significant portion of our revenues from our largest clients and could be materially and adversely affected if we lose one or more of our large clients. Our 25 largest clients accounted for approximately 30% and 33% of revenue in 2024 and 2023, respectively.
We derive a significant portion of our revenues from our largest clients and could be materially and adversely affected if we lose one or more of our large clients. Our 25 largest clients accounted for approximately 30% of revenue in both 2025 and 2024.
Risks Related to Management and Employees The loss of key executives could adversely affect our business. The success of our business is dependent upon the continued service of a relatively small group of key executives, including Michael P. Connors, Chairman and Chief Executive Officer; Todd D. Lavieri, Vice Chairman and President – ISG Americas and Asia Pacific; Michael A.
Risks Related to Management and Employees The loss of key executives could adversely affect our business. The success of our business is dependent upon the continued service of a relatively small group of key executives, including Michael P. Connors, Chairman and Chief Executive Officer; Todd D.
An increase in debt service obligations under our variable rate indebtedness could affect our ability to make payments required under the terms of our credit facility. Risks Related to Acquisitions and Dispositions We have risks associated with acquisitions or investments. Since our inception, we have expanded through acquisitions.
An increase in debt service obligations under our variable rate indebtedness could affect our ability to make payments required under the terms of our credit facility. Risks Related to Acquisitions and Dispositions We have risks associated with acquisitions or investments. Since our inception, we have expanded through acquisitions, including our most recent acquisition of Martino & Partners s.r.l.
We also face risks related to our use of third-party suppliers if such suppliers are affected by a cybersecurity threat or incident, which could result in a reduction in or loss of their ability to service us (which could be a significant component of our services to clients), the exposure of ISG or client data or a potential backdoor into ISG’s systems and network.
If such suppliers are affected by a cybersecurity threat or incident, it could result in not only a reduction in or loss of their ability to service us (which could be a significant component of our services to clients) but also the exposure of ISG or client data or a potential backdoor into ISG’s systems and network.
Individuals, groups and state-sponsored organizations may take steps that pose threats to our operations, our computer systems, our employees, and our clients.
Individuals, groups, state-sponsored organization, and actors utilizing AI may take steps that pose threats to our operations, our computer systems, our employees, and our clients.
If we pursue acquisition or investment opportunities, these potential risks could disrupt our ongoing business, result in the loss of key customers or personnel, increase expenses and otherwise have a material adverse effect on our business, results of operations and financial condition.
In addition, we may not be able to identify, acquire or profitably manage additional businesses. If we pursue acquisition or investment opportunities, these potential risks could disrupt our ongoing business, result in the loss of key customers or personnel, increase expenses and otherwise have a material adverse effect on our business, results of operations and financial condition.
Any failure to successfully implement our operating strategy or the occurrence of any of the events or circumstances set forth in this Annual Report on Form 10-K could result in the actual operating results being different than the guidance, and such differences may be adverse and material.
Any failure to successfully implement our operating strategy or the occurrence of any of the events or circumstances set forth in this Annual Report on Form 10-K could result in the actual operating results being different than the guidance, and such differences may be adverse and material. 21 Table of Contents We may experience employment-related claims, commercial indemnification claims and other legal proceedings that could materially harm our business.
Any material declines in our ability to secure new advisory arrangements could have an adverse impact on our revenues and financial condition. If we are unable to achieve or maintain adequate utilization for our consultants, our operating results could be adversely impacted. Our profitability depends to a large extent on the utilization of our consultants.
If we are unable to achieve or maintain adequate utilization for our consultants, our operating results could be adversely impacted. Our profitability depends to a large extent on the utilization of our consultants.
Any failure to retain key personnel or hire and train additional qualified personnel as required to support the evolving needs of clients or growth in our business could adversely affect the quality of our products and services, and our future business and operating results. 16 Table of Contents We may have agreements with certain clients that limit the ability of particular advisors to work on some engagements for a period of time.
Any failure to retain key personnel or hire and train additional qualified personnel as required to support the evolving needs of clients or growth in our business could adversely affect the quality of our products and services, and our future business and operating results.
We have conducted dispositions in the past and may again in the future.
We have conducted dispositions in the past, most recently disposing of our automation business in 2024, and may again in the future.
The unexpected loss of the services of one or more of these executives could adversely affect our business. We rely heavily on key members of our management team. We are dependent on our management team.
Although we currently intend to retain our existing management, we cannot assure that such individuals will remain with us for the immediate or foreseeable future. The unexpected loss of the services of one or more of these executives could adversely affect our business. We rely heavily on key members of our management team. We are dependent on our management team.
We provide services primarily in connection with significant or complex sourcing transactions and other matters that provide potential competitive advantages and/or involve sensitive client information.
We may have agreements with certain clients that limit the ability of particular advisors to work on some engagements for a period of time. We provide services primarily in connection with significant or complex sourcing transactions and other matters that provide potential competitive advantages and/or involve sensitive client information.
The cost of our obtaining an amendment or waiver could be significant, and further, there can be no assurance that we would be able to obtain an amendment or waiver. If our lenders were unwilling to enter into an amendment or provide a waiver, all amounts outstanding under our credit facility would become immediately due and payable.
The cost of our obtaining an 11 Table of Contents amendment or waiver could be significant, and further, there can be no assurance that we would be able to obtain an amendment or waiver.
We have implemented and will continue to implement cost-savings initiatives to manage our expenses as a percentage of revenue. However, current and future cost-management initiatives may not be sufficient to maintain our margins if the economic environment should weaken for a prolonged period.
We have implemented and will continue to implement cost-savings initiatives to manage our expenses as a percentage of revenue.
The rate of growth in the broadly defined business information services and advisory sector and/or the use of technology in business may fall significantly below the levels that we currently anticipate.
However, current and future cost-management initiatives may not be sufficient to maintain our margins if the economic environment should weaken for a prolonged period. 12 Table of Contents The rate of growth in the broadly defined business information services and advisory sector and/or the use of technology in business may fall significantly below the levels that we currently anticipate.
Our variable rate indebtedness subjects us to interest rate risk, which could cause our annual debt service obligations to increase significantly.
If our lenders were unwilling to enter into an amendment or provide a waiver, all amounts outstanding under our credit facility would become immediately due and payable. Our variable rate indebtedness subjects us to interest rate risk, which could cause our annual debt service obligations to increase significantly.
Removed
Sherrick, Executive Vice President and Chief Financial Officer; and Thomas S. Kucinski, Executive Vice President and Chief Human Resources Officer, among others. Although we currently intend to retain our existing management, we cannot assure that such individuals will remain with us for the immediate or foreseeable future.
Added
The development, deployment, and use of artificial intelligence technologies, including generative AI, involve significant legal, regulatory, operational, ethical and commercial risks, any of which could materially and adversely affect our business, financial condition, results of operations and reputation. We are increasing our use of AI across our service delivery, advisory offerings and internal operations.
Removed
In addition, the new India Digital Personal Data Protection Act 2023 (“DPDP”) draft rules are out for consultation, which closed in February 2025. The DPDP is anticipated to come into force within two years. Like the GDPR, the DPDP has extra-territorial reach.
Added
AI technologies are at an early stage of development and present uncertainties regarding reliability, accuracy, explainability, data governance and long-term economic viability.
Added
Although we are dedicating resources to AI-related investments, training and partnerships, we may be unable to develop, procure, implement, or maintain AI tools and capabilities in a manner that meets client requirements, complies with applicable laws or produces anticipated operational or financial benefits. AI systems may generate outputs that are inaccurate, biased, incomplete, unpredictable or otherwise unintended.
Added
Such outcomes could result in operational failures, adverse client impacts, misinformed decision-making, or reputational harm. Any failure by us—or by third parties whose tools or data we use—to appropriately design, test, validate, monitor or govern AI systems could expose us to contractual claims, indemnification demands, regulatory enforcement, litigation, financial penalties or other liabilities.
Added
The regulatory framework governing AI is rapidly evolving and varies significantly across jurisdictions in which we operate. New or amended laws, regulations, standards or guidance may impose additional obligations on the development, use, auditing or documentation of AI systems, restrict certain uses of AI, require enhanced disclosures, or create new liabilities.
Added
Compliance with such frameworks may require substantial investment in governance, controls, reporting processes and oversight mechanisms. Failure to comply—whether actual or perceived—may result in investigations, fines, operational restrictions, adverse publicity or loss of client trust. Our competitive position may be adversely affected by rapid technological change and heightened competition related to AI.
Added
Competitors, including global consultancies, technology vendors, hyperscalers and emerging AI-native firms, may introduce capabilities that exceed or supplant our own. Clients may accelerate internal development of AI capabilities that reduce demand for our services.
Added
AI and automation may also diminish the need for certain services currently provided by our personnel, and we may not be able to adjust our delivery model, pricing, staffing, training or organizational structure in a timely or cost-effective manner. In addition, our AI capabilities depend on access to third-party infrastructure, data sets, cloud environments, software, models and specialized hardware.
Added
Supply constraints, increased pricing, licensing limitations, service interruptions, security vulnerabilities and/or incidents, or changes in contractual terms could materially impair our ability to develop, deliver or support AI-related services.
Added
Uncertainties regarding ownership, licensing or permissible use of training data, model outputs or other intellectual property may expose us to disputes, forced modifications, operational delays or damages. 13 Table of Contents Any of the foregoing factors—individually or collectively—could materially and adversely affect our business, financial condition, results of operations and reputation.
Added
Any material declines in our ability to secure new advisory arrangements could have an adverse impact on our revenues and financial condition. Clients’ failure or inability to pay for our services, whether on a timely basis or at all, could materially, adversely affect our results of operations and financial condition.
Added
As further described in Note 2 to the Consolidated Financial Statements, “Summary of Significant Account Policies – Accounts Receivable, Contract Assets and Allowance for Doubtful Accounts,” the Company has been engaged in litigation with certain clients who have either failed to make payments as per the contracted payment schedule or have disputed account receivable balances for services rendered.
Added
While we maintain an allowance for doubtful accounts for estimated losses resulting from the inability of clients to pay fees or for disputes that affect our ability to fully collect billed accounts receivable, our actual experience may vary from these estimates, and there is no guarantee that such allowance will ultimately be sufficient.
Added
We may be required to record additional allowances or write offs in future periods, which, in turn, could adversely impact our financial condition and results of operation. 14 Table of Contents Moreover, while the Company continues to aggressively pursue legal action and/or collection against clients who dispute charges or fail to make payments, there is no guarantee that the Company’s legal actions will be successful, that actual collections from clients will reflect the Company’s estimate of amounts owed, and/or that the Company will be able to recoup legal fees expended on such actions.
Added
Lavieri, Vice Chairman and President – ISG Americas and Asia 16 Table of Contents Pacific; Michael A. Sherrick, Executive Vice President and Chief Financial Officer; and Thomas S. Kucinski, Executive Vice President and Chief Human Resources Officer, among others.
Added
Changes to trade policy, including new or increased tariffs and changing import/export regulations, may adversely affect our business, financial condition and results of operations . Changes in U.S. or international laws and policies governing foreign trade could materially and adversely affect our business.
Added
The U.S. has instituted certain changes, and has proposed additional changes, in trade policies that include the negotiation or termination of trade agreements, the imposition of higher tariffs on imports into the U.S. and other government regulations affecting trade between the U.S. and other countries where we conduct our business.
Added
The new tariffs and other changes in U.S. trade policy have triggered retaliatory actions by affected countries, and foreign governments have instituted, or are considering imposing, trade sanctions on U.S. goods.
Added
The imposition of tariffs and other trade restrictions, as well as the escalation of trade disputes and any downturns in the global economy resulting therefrom, could materially and adversely affect our business, financial condition and results of operations.
Added
The extent and duration of the tariffs and other trade restrictions and the resulting impact on general economic conditions and on our business are uncertain and depend on various factors, such as negotiations between the U.S. and affected countries, the responses of other countries or regions, exemptions or exclusions that may be granted, the availability and cost of alternative sources of supply and demand for our services in affected markets.
Added
Moreover, these laws and regulations impose operational requirements, including disclosures to consumers about personal data practices, opt-out and consent choices and required contractual terms with certain third parties, and obligations to provide notice to individuals, third parties, and/or regulators in the event of certain cybersecurity incidents involving personal data.
Added
In addition, India’s Ministry of Electronics and Information Technology notified the Digital Personal Data Protection Rules 2025 (the “Rules”) November 13, 2025, operationalizing the Digital Personal Data Protection Act 2023 (“DPDPA”) enacted by the Parliament of India in August 2023.
Added
Companies operating in India must meet the DPDPA’s core compliance obligations, which includes reporting data breaches within seventy-two hours, appointing consent managers and data protection officers, and implementing systems for express user permission, within a phased twelve-to-eighteen-month timeline. Like the GDPR, the DPDPA has extra-territorial reach.
Added
We also face risks related to our use of third-party suppliers, with whom we may share data and operational systems.
Added
We are exposed to risks related to artificial intelligence. We recognize that our use of AI introduces risks related to data protection, cybersecurity, model integrity, confidentiality and operational reliability.
Added
In particular, our use of AI technologies may expose us to errors, data quality issues, security vulnerabilities, or other harms, especially as these technologies can behave unpredictably, fail, or produce inaccurate or biased outputs.
Added
Failures in oversight, system design, or data quality could result in various harms to us or our clients, including, but not limited to, operational disruptions, security or privacy incidents, and/or reputational challenges. Because AI systems can be complex and difficult to fully evaluate or audit, we may be unable to detect errors or vulnerabilities in a timely manner.
Added
If we are unable to effectively implement, monitor, and manage these technologies, our business, financial condition, and results of operations could be adversely affected. In light of these risks, we have established governance processes intended to support the responsible evaluation, approval, deployment and monitoring of AI tools used in our internal operations and in client delivery.
Added
These processes include review mechanisms 19 Table of Contents for higher-risk AI use cases, defined roles and responsibilities for management oversight, and coordination among our information security, legal, compliance and risk management functions.
Added
Our Board of Directors, through its designee, the Information Security Committee (“ISC”), receives periodic updates from management regarding emerging AI-related risks, regulatory developments, and the potential impact of AI on our operations, technology environment and risk profile.
Added
Management is responsible for implementing controls, policies, training and monitoring procedures relevant to AI technologies, including restrictions on the use of unapproved or public AI tools that may create confidentiality, cybersecurity or compliance risks.
Added
As AI technologies and associated global and domestic laws and regulations continue to evolve, we may be required to, among other things: enhance our governance frameworks, controls, documentation and reporting practices, increase our compliance costs; and/or limit our use of certain technologies.
Added
There can be no assurance that our processes will be sufficient to prevent or mitigate all AI-related risks, and failures or limitations in these processes could have a material adverse effect on our operations, reputation or regulatory posture. Moreover, any failure to comply with emerging AI regulatory frameworks could result in enforcement actions, fines, or other adverse consequences.
Added
We currently are, and may again in the future be, subject to employment-related claims in certain of the jurisdictions in which we operate, including claims of wage and hour violations. We incur a risk of liability for claims relating to employment-related matters, contractual obligations, government inquiries and other claims.
Added
Some or all of these claims may give rise to litigation or settlements, which may cause us to incur costs or have other material adverse impacts on our financial statements.
Added
Additionally, new employment and labor laws and regulations may be proposed or adopted in the jurisdictions in which we operate that may increase the potential exposure of employers to employment-related claims and litigation. Certain clients have negotiated broad indemnification provisions regarding the services we provide.
Added
In addition, we may have liability to our clients for the action or inaction of our consultants that may cause harm to our clients or third parties. In some cases, we must indemnify our clients for certain acts of our consultants or arising from our consultants’ presence on the client’s job site.
Added
We may also incur fines, penalties, and losses that are not covered by insurance or negative publicity with respect to these matters.
Item 1C. Cybersecurity
Cybersecurity — threats and controls disclosure
3 edited+2 added−1 removed19 unchanged
Item 1C. Cybersecurity
Cybersecurity — threats and controls disclosure
3 edited+2 added−1 removed19 unchanged
2024 filing
2025 filing
Biggest changeWe continue to invest in the cybersecurity and resiliency of our networks and to enhance our internal controls and processes, which are designed to help protect our systems and infrastructure, and the information they contain. 21 Table of Contents As of the date of this Annual Report on Form 10-K, we are not aware of any cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected , or are reasonably likely to materially affect, the Company, including our business strategy, results of operations or financial condition.
Biggest changeAs of the date of this Annual Report on Form 10-K, we are not aware of any cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected , or are reasonably likely to materially affect, the Company, including our business strategy, results of operations or financial condition.
Responsibility for cybersecurity risk has been delegated to the ISC, which consists of senior executives (including three IEB members), namely our Chief Financial Officer (IEB member), Chief Human Resources Officer (IEB member), Chief Information Officer, Chief Data and Analytics Officer (IEB member), Chief Information Security Officer, Legal Counsel, Director of Corporate Governance and Data Privacy Manager.
Responsibility for cybersecurity risk has been delegated to the ISC, which consists of senior executives (including three IEB members), namely our Chief Financial Officer (IEB member), Chief Human Resources Officer (IEB member), Chief Information Officer, Partner, Data Analytics & Technology Office (IEB member), Chief Information Security Officer, Legal Counsel, Director – Workplace Services and Senior Manager, Compliance & Data Privacy.
ISG employs a Data Privacy Manager who briefs the ISC on privacy matters as part of the quarterly ISC meetings. The Data Privacy Manager completes an internal audit annually and works with a specialist third party to complete an external Data Protection Compliance review.
ISG employs a Data Privacy Manager who briefs the ISC on privacy matters as part of the quarterly ISC meetings.
Removed
In 2024, the Company achieved a System and Organization Controls 2 (“SOC2”) Type 1 against our GovernX platforms, and we are preparing to continue maturity in this area by seeking to attain SOC2 Type 2 in 2025.
Added
Following an independent third party audit of the ISG GovernX and Executive Insights Systems against the Description of a service organization system in a SOC2 Type 2 Report (AICPA, Description Criteria), ISG was able to provide reasonable assurance that our service commitments and system requirements were achieved based on the trust services criteria relevant to security, confidentiality and availability.
Added
The Data Privacy Manager completes an internal audit annually and works with a specialist third party to complete an external Data Protection Compliance review. 23 Table of Contents We continue to invest in the cybersecurity and resiliency of our networks and to enhance our internal controls and processes, which are designed to help protect our systems and infrastructure, and the information they contain.
Item 2. Properties
Properties — owned and leased real estate
1 edited+0 added−0 removed1 unchanged
Item 2. Properties
Properties — owned and leased real estate
1 edited+0 added−0 removed1 unchanged
2024 filing
2025 filing
Biggest changeItem 2. Properties We maintain our executive offices in Stamford, Connecticut. The lease for our executive offices covers approximately eighteen thousand square feet and expires on September 30, 2025. The majority of our business activities are performed on client sites or remotely. We do not own offices or properties.
Biggest changeItem 2. Properties We maintain our executive offices in Stamford, Connecticut. The lease for our executive offices covers approximately seventeen thousand five hundred square feet and expires in November 2036. The majority of our business activities are performed on client sites or remotely. We do not own offices or properties.
Item 3. Legal Proceedings
Legal Proceedings — active lawsuits and investigations
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Item 3. Legal Proceedings
Legal Proceedings — active lawsuits and investigations
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2024 filing
2025 filing
Biggest changeFrom time to time, we and our consolidated subsidiaries may be a party to certain legal proceedings in the ordinary course of business.
Biggest changeFrom time to time, we and our consolidated subsidiaries may be a party to certain legal proceedings in the ordinary course of business, including as described in the notes to the financial statements. Refer to Note 14 under the heading “Legal Reserve.”
Item 5. Market for Registrant's Common Equity
Market for Common Equity — stock, dividends, buybacks
7 edited+2 added−2 removed2 unchanged
Item 5. Market for Registrant's Common Equity
Market for Common Equity — stock, dividends, buybacks
7 edited+2 added−2 removed2 unchanged
2024 filing
2025 filing
Biggest changeThere is no guarantee as to the number of shares that will be repurchased, and the repurchase program may be extended, suspended or discontinued at any time without notice at the Company’s discretion. 23 Table of Contents The following table details the repurchases that were made during the three months ended December 31, 2024. Total Number of Approximate Dollar Shares Value of Shares Total Number of Purchased That May Yet Be Shares Average as Part of Publicly Purchased Under Purchased Price Paid per Announced Plans or Programs the Plans or Programs Period (In thousands) Share (In thousands) (In thousands) (1) October 1 - October 31 1 $ 3.27 1 $ 20,616 November 1 - November 30 257 $ 3.44 257 $ 19,731 December 1 - December 31 396 $ 3.60 396 $ 18,304 (1) On August 1, 2023, the Board of Directors approved a new stock repurchase plan authorizing the Company to repurchase an aggregate of an additional $25 million in shares of the Company’s common stock.
Biggest changeThere is no guarantee as to the number of shares that will be repurchased, and the repurchase program may be extended, suspended or discontinued at any time without notice at the Company’s discretion. 25 Table of Contents The following table details the repurchases that were made during the three months ended December 31, 2025. Total Number of Approximate Dollar Shares Value of Shares Total Number of Purchased That May Yet Be Shares Average as Part of Publicly Purchased Under Purchased Price Paid per Announced Plans or Programs the Plans or Programs Period (In thousands) Share (In thousands) (In thousands) October 1 - October 31 161 $ 5.61 161 $ 7,324 November 1 - November 30 96 $ 5.27 96 $ 6,818 December 1 - December 31 150 $ 5.90 150 $ 5,933 Recent Sales of Unregistered Securities As previously reported, on September 1, 2025, the Company completed the acquisition of Martino & Partners.
The Company had approximately $18.3 million in the aggregate available under its current share repurchase program as of December 31, 2024. The shares may be repurchased from time to time in open market transactions at prevailing market prices, in privately negotiated transactions, pursuant to a Rule 10b5-1 repurchase plan or by other means in accordance with federal securities laws.
The Company had approximately $5.9 million in aggregate available under its current share repurchase program as of December 31, 2025. The shares may be repurchased from time to time in open market transactions at prevailing market prices, in privately negotiated transactions, pursuant to a Rule 10b5-1 repurchase plan or by other means in accordance with federal securities laws.
As of February 25, 2025, there were 587 holders of record of ISG common stock. The actual number of stockholders is significantly greater than this number of record holders and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.
As of February 18, 2026, there were 471 holders of record of ISG common stock. The actual number of stockholders is significantly greater than this number of record holders and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.
This number of holders of record also does not include stockholders whose shares may be held in trust by other entities. Dividends to Shareholders On March 4, 2025, the Board of Directors approved a fourth quarter dividend of $0.045 per share, payable on March 28, 2025, to shareholders of record as of March 21, 2025.
This number of holders of record also does not include stockholders whose shares may be held in trust by other entities. Dividends to Shareholders On March 3, 2026, the Board of Directors approved a fourth quarter dividend of $0.045 per share, payable on March 26, 2026, to shareholders of record as of March 20, 2026.
On August 1, 2023, the Board of Directors approved a new stock repurchase plan authorizing the Company to repurchase an aggregate of an additional $25 million in shares of the Company’s common stock. The new share repurchase program took effect upon the completion of the 2021 Repurchase Program, which was exhausted in the quarter ended March 31, 2024.
Issuer Purchases of Equity Securities On August 1, 2023, the Board of Directors approved a stock repurchase plan authorizing the Company to repurchase an aggregate of $25 million in shares of the Company’s common stock, which took effect upon the completion of the Company’s previous repurchase program that was exhausted in the quarter ended March 31, 2024.
During the fiscal quarter and fiscal year ended December 31, 2024, we paid dividends and dividend equivalents of $4.5 million and $9.4 million, respectively.
During the fiscal quarter and fiscal year ended December 31, 2025, we paid dividends and dividend equivalents of $2.2 million and $9.2 million, respectively.
Market for Registrant’s Common Equi ty, Related Stockholder Matters and Issuer Purchases of Equity Securities The following table sets forth the high and low closing sales price of our common stock, as reported on The Nasdaq Stock Market LLC under the symbol “III” for the periods shown: Common Stock Quarter Ended High Low March 31, 2024 $ 4.78 $ 3.91 June 30, 2024 4.08 2.94 September 30, 2024 3.56 2.99 December 31, 2024 3.80 3.07 Common Stock Quarter Ended High Low March 31, 2023 $ 5.62 $ 4.63 June 30, 2023 5.85 4.88 September 30, 2023 5.48 4.33 December 31, 2023 4.92 3.99 On February 25, 2025, the last reported sale price for our common stock on The Nasdaq Stock Market was $3.07 per share.
Market for Registrant’s Common Equi ty, Related Stockholder Matters and Issuer Purchases of Equity Securities The following table sets forth the high and low closing sales price of our common stock, as reported on The Nasdaq Stock Market LLC under the symbol “III” for the periods shown: Common Stock Quarter Ended High Low March 31, 2025 $ 4.00 $ 2.98 June 30, 2025 4.95 3.45 September 30, 2025 5.97 4.20 December 31, 2025 6.10 5.01 Common Stock Quarter Ended High Low March 31, 2024 $ 4.78 $ 3.91 June 30, 2024 4.08 2.94 September 30, 2024 3.56 2.99 December 31, 2024 3.80 3.07 On February 25, 2026, the last reported sale price for our common stock on The Nasdaq Stock Market was $4.69 per share.
Removed
Issuer Purchases of Equity Securities On August 5, 2021, the Board of Directors approved a stock repurchase plan authorizing the Company to repurchase an aggregate of $25 million in shares of the Company’s common stock (the “2021 Repurchase Program”).
Added
In September 2025, in connection with the acquisition, the Company issued 48,356 shares of ISG common stock valued at approximately $0.3 million to the Sellers of Martino & Partners.
Removed
The new share repurchase program took effect upon the completion of the 2021 Repurchase Program, which was exhausted in the quarter ended March 31, 2024. Item 6. [Reserved]
Added
The issuance of these shares of ISG common stock was exempt from registration under Rule 4(a)(2) promulgated under the Securities Act of 1933, as amended. Item 6. [Reserved]
Item 6. [Reserved]
Selected Financial Data — reserved (removed by SEC in 2021)
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Item 6. [Reserved]
Selected Financial Data — reserved (removed by SEC in 2021)
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2024 filing
2025 filing
Biggest changeControls and Procedures 34 Item 9B . Other Information 35 Item 9C . Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 35 PART III Item 10 . Directors, Executive Officers and Corporate Governance 35 Item 11 . Executive Compensation 35 Item 12 . Security Ownership and Certain Beneficial Owners and Management and Related Stockholder Matters 35
Biggest changeControls and Procedures 36 Item 9B . Other Information 37 Item 9C . Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 37 PART III Item 10 . Directors, Executive Officers and Corporate Governance 37 Item 11 . Executive Compensation 37 Item 12 . Security Ownership and Certain Beneficial Owners and Management and Related Stockholder Matters 37
Item 6. [Reserved] 24 Item 7 . Management’s Discussion and Analysis of Financial Condition and Results of Operations 24 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 33 Item 8 . Financial Statements and Supplementary Data 34 Item 9 . Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 34 Item 9A .
Item 6. [Reserved] 26 Item 7 . Management’s Discussion and Analysis of Financial Condition and Results of Operations 26 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 35 Item 8 . Financial Statements and Supplementary Data 36 Item 9 . Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 36 Item 9A .
Item 7. Management's Discussion & Analysis
Management's Discussion & Analysis (MD&A) — revenue / margin commentary
37 edited+15 added−19 removed56 unchanged
Item 7. Management's Discussion & Analysis
Management's Discussion & Analysis (MD&A) — revenue / margin commentary
37 edited+15 added−19 removed56 unchanged
2024 filing
2025 filing
Biggest changeWe believe that these non-GAAP financial measures provide useful information to investors because they improve the comparability of the financial results between periods and provide for greater transparency of key measures used to evaluate the Company’s performance. Years Ended December 31, 2024 2023 (in thousands) Net income $ 2,839 $ 6,154 Plus: Interest expense (net of interest income) 5,055 5,693 Income taxes 2,388 2,607 Depreciation and amortization 5,888 6,258 Gain on sale of business (4,532) — Interest accretion associated with contingent consideration 77 104 Change in contingent consideration (Note 2) (2,390) — Acquisition and disposition-related costs (1) 2,880 201 Severance, integration and other expense 4,887 2,513 Accounts receivable reserves (3) — 4,822 Tax indemnity receivables — 35 Foreign currency transaction loss 7 158 Non-cash stock compensation 8,046 9,132 Adjusted EBITDA $ 25,145 $ 37,677 Years Ended December 31, 2024 2023 (in thousands) Net income $ 2,839 $ 6,154 Plus: Non-cash stock compensation 8,046 9,132 Intangible amortization 2,606 3,164 Interest accretion associated with contingent consideration 77 104 Change in contingent consideration (Note 2) (2,390) — Acquisition and disposition-related costs (1) 2,880 201 Accounts receivable reserves (3) — 4,822 Gain on sale of business (4,532) — Severance, integration and other expense 4,887 2,513 Write-off of deferred financing costs — 379 Foreign currency transaction loss 7 158 Tax effect (2) (4,452) (6,551) Adjusted net income $ 9,968 $ 20,076 29 Table of Contents Years Ended December 31, 2024 2023 Net income per diluted share $ 0.06 $ 0.12 Non-cash stock compensation 0.16 0.18 Intangible amortization 0.05 0.06 Interest accretion associated with contingent consideration 0.00 0.00 Change in contingent consideration (Note 2) (0.05) — Acquisition and disposition-related costs (1) 0.06 0.01 Accounts receivable reserves (3) — 0.10 Gain on sale of business (0.09) — Severance, integration and other expense 0.10 0.05 Write-off of deferred financing costs — 0.01 Foreign currency transaction loss 0.00 0.00 Tax effect (2) (0.09) (0.13) Adjusted net income per diluted share $ 0.20 $ 0.40 ________________________________________ (1) Consists of expenses from acquisition and disposition-related costs and non-cash fair value adjustments on pre-acquisition contract liabilities.
Biggest changeWe believe that these non-GAAP financial measures provide useful information to investors because 30 Table of Contents they improve the comparability of the financial results between periods and provide for greater transparency of key measures used to evaluate the Company’s performance. Years Ended December 31, 2025 2024 (in thousands) Net income $ 9,341 $ 2,839 Plus: Interest expense (net of interest income) 3,916 5,055 Income taxes provision 5,195 2,388 Depreciation and amortization 4,538 5,888 Interest accretion associated with contingent consideration 35 77 Loss on assets disposal 93 — Gain on the sale of business (720) (4,532) Change in contingent consideration (Note 2) (846) (2,390) Acquisition and disposition-related costs (1) 437 2,880 Severance, integration and other expense 2,310 4,887 Foreign currency transaction loss 64 7 Non-cash stock compensation 7,835 8,046 Adjusted EBITDA $ 32,198 $ 25,145 Years Ended December 31, 2025 2024 (in thousands) Net income $ 9,341 $ 2,839 Plus: Non-cash stock compensation 7,835 8,046 Intangible amortization 1,275 2,606 Interest accretion associated with contingent consideration 35 77 Change in contingent consideration (Note 2) (846) (2,390) Loss on assets disposal 93 — Gain on the sale of business (720) (4,532) Acquisition and disposition-related costs (1) 437 2,880 Severance, integration and other expense 2,310 4,887 Foreign currency transaction loss 64 7 Tax effect (2) (3,355) (4,452) Adjusted net income $ 16,469 $ 9,968 Years Ended December 31, 2025 2024 Net income per diluted share $ 0.19 $ 0.06 Non-cash stock compensation 0.16 0.16 Intangible amortization 0.03 0.05 Interest accretion associated with contingent consideration 0.00 0.00 Loss on assets disposal 0.00 — Gain on the sale of assets (0.01) (0.09) Change in contingent consideration (Note 2) (0.02) (0.05) Acquisition and disposition-related costs (1) 0.01 0.06 Severance, integration and other expense 0.05 0.10 Foreign currency transaction loss 0.00 0.00 Tax effect (2) (0.08) (0.09) Adjusted net income per diluted share $ 0.33 $ 0.20 ________________________________________ (1) Consists of expenses from acquisition and disposition-related costs and non-cash fair value adjustments on pre-acquisition contract liabilities.
Capitalized terms used but not defined herein have the meanings ascribed to them in the 2023 Credit Agreement: ● The revolving credit facility has a maturity date of February 22, 2028. ● The credit facility is secured by all of the equity interests owned by the Company, and its direct and indirect domestic subsidiaries and, subject to agreed exceptions, the Company’s direct and indirect “first-tier” foreign subsidiaries, and a perfected first priority security interest in all of the Company’s and its direct and indirect domestic subsidiaries’ tangible and intangible assets. ● The Company’s direct and indirect existing and future wholly owned domestic subsidiaries serve as guarantors to the Company’s obligations under the senior secured facility. ● At the Company’s option, the credit facility bears interest at a rate per annum equal to either (i) the “Base Rate” (which is the highest of (a) the rate publicly announced from time to time by the administrative agent as its “prime rate,” (b) the Federal Funds Rate plus 0.5% per annum and (c) Term SOFR, plus 1.0%), plus the applicable margin or (ii) Term SOFR (which is the Term SOFR screen rate for the relevant interest period plus a credit spread adjustment of 0.10%) as determined by the administrative agent, plus the applicable margin.
Capitalized terms used but not defined herein have the meanings ascribed to them in the 2023 Credit Agreement: ● The revolving credit facility has a maturity date of February 22, 2028. 32 Table of Contents ● The credit facility is secured by all of the equity interests owned by the Company, and its direct and indirect domestic subsidiaries and, subject to agreed exceptions, the Company’s direct and indirect “first-tier” foreign subsidiaries, and a perfected first priority security interest in all of the Company’s and its direct and indirect domestic subsidiaries’ tangible and intangible assets. ● The Company’s direct and indirect existing and future wholly owned domestic subsidiaries serve as guarantors to the Company’s obligations under the senior secured facility. ● At the Company’s option, the credit facility bears interest at a rate per annum equal to either (i) the “Base Rate” (which is the highest of (a) the rate publicly announced from time to time by the administrative agent as its “prime rate,” (b) the Federal Funds Rate plus 0.5% per annum and (c) Term SOFR, plus 1.0%), plus the applicable margin or (ii) Term SOFR (which is the Term SOFR screen rate for the relevant interest period plus a credit spread adjustment of 0.10%) as determined by the administrative agent, plus the applicable margin.
The variance from the U.S. statutory rate of 21.0% for the year ended December 31, 2024, was primarily caused by state taxes, the impact of higher tax rates applicable on company earnings in foreign jurisdictions, non-deductible expenses for tax purposes in the United States, and a benefit from the sale of the automation business.
The variance from the U.S. statutory rate of 21.0% for the year ended December 31, 2025, was primarily caused by state taxes, the impact of higher tax rates applicable on company earnings in foreign jurisdictions, non-deductible expenses for tax purposes in the United States, and a benefit from the sale of the automation business.
This MD&A provides an analysis of our consolidated financial results and cash flows for 2024 and 2023 under the headings “Results of Operations,” “Non-GAAP Financial Presentation,” “Non-GAAP Financial Measures,” and “Liquidity and Capital Resources.” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the year ended December 31, 2023.
This MD&A provides an analysis of our consolidated financial results and cash flows for 2025 and 2024 under the headings “Results of Operations,” “Non-GAAP Financial Presentation,” “Non-GAAP Financial Measures,” and “Liquidity and Capital Resources.” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the year ended December 31, 2024.
BUSINESS OVERVIEW Information Services Group, Inc. (Nasdaq: III) is a global Artificial AI-centered technology research and advisory firm.
BUSINESS OVERVIEW Information Services Group, Inc. (Nasdaq: III) is a global AI-centered technology research and advisory firm.
Prior to the commencement of a project, we reach agreement with the client on rates for services based upon the scope of the project, staffing requirements and the level of 24 Table of Contents client involvement.
Prior to the commencement of a project, we reach agreement with the client on rates for services based upon the scope of the project, staffing requirements and the level of 26 Table of Contents client involvement.
Selling, general and administrative expenses consist principally of executive management compensation, allocations of billable employee compensation related to general management activities, IT infrastructure and costs for finance, accounting, information 27 Table of Contents technology and human resource functions. General and administrative costs also reflect continued investment associated with implementing and operating client and employee management systems.
Selling, general and administrative expenses consist principally of executive management compensation, allocations of billable employee compensation related to general management activities, IT infrastructure and costs for finance, accounting, information technology and human resource functions. General and administrative costs also reflect continued investment associated with implementing and operating client and employee management systems.
Employee Retirement Plans For the fiscal years ended December 31, 2024 and 2023, we contributed $0.7 million and $0.0 million, respectively, to our 401(k) plan (the “Savings Plan”) on a fully discretionary basis. These amounts were invested by the participants in a variety of investment options under an arrangement with a third-party asset manager.
Employee Retirement Plans For the fiscal years ended December 31, 2025 and 2024, we contributed $1.8 million and $0.7 million, respectively, to our 401(k) plan (the “Savings Plan”) on a fully discretionary basis. These amounts were invested by the participants in a variety of investment options under an arrangement with a third-party asset manager.
The firm, founded in 2006, is known for its proprietary market data, in-depth knowledge of provider ecosystems, and the expertise of its 1,300 professionals worldwide working together to help clients maximize the value of their technology investments. For more information, visit www.isg-one.com. The content on our website is available for informational purposes only.
The firm, founded in 2006, is known for its proprietary market data and research, in-depth knowledge and governance of provider ecosystems, and the expertise of its 1,500 professionals worldwide working together to help clients maximize the value of their technology investments. For more information, visit www.isg-one.com. The content on our website is available for informational purposes only.
These are non-GAAP measures that the 28 Table of Contents Company believes provide useful information to both management and investors by excluding certain expenses and financial implications of foreign currency translations that management believes are not indicative of ISG’s core operations.
These 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 that management believes are not indicative of ISG’s core operations.
This percentage is multiplied by the contracted dollar amount of the project to determine the amount 32 Table of Contents of revenue to recognize in an accounting period. The contracted amount used in this calculation typically excludes the amount the client pays for reimbursable expenses.
This percentage is multiplied by the contracted dollar amount of the project to determine the amount of revenue to recognize in an accounting period. The contracted amount used in this calculation typically excludes the amount the client pays for reimbursable expenses.
The fair value of the Company’s outstanding borrowings was approximately $59.6 million and $79.8 million as of December 31, 2024 and December 31, 2023, respectively. The fair values of debt have been estimated using a discounted cash flow analysis based on the Company’s incremental borrowing rate for similar borrowing arrangements.
The fair value of the Company’s outstanding borrowings was approximately $59.5 million and $59.6 million as of December 31, 2025 and December 31, 2024, respectively. The fair values of debt have been estimated using a discounted cash flow analysis based on the Company’s incremental borrowing rate for similar borrowing arrangements.
We may not be able to obtain financing arrangements in amounts or on terms acceptable to us in the future. The Company has financial covenants underlying its debt which require a debt to adjusted EBITDA ratio of 2.32. The Company was in compliance with its financial covenants under the 2023 Credit Agreement as of December 31, 2024.
We may not be able to obtain financing arrangements in amounts or on terms acceptable to us in the future. The Company has financial covenants underlying its debt which require a debt to adjusted EBITDA ratio of 1.85. The Company was in compliance with its financial covenants under the 2023 Credit Agreement as of December 31, 2025.
CURRENT ENVIRONMENT Inflation rates and the adverse effect of interest rates have been volatile in the past year. Inflation has not had a material effect on our business operations, financial performance and results of operations, other than its impact on the general economy.
CURRENT ENVIRONMENT Inflation rates and the adverse effect of interest rates continued to be volatile in the past year. Inflation has not had a material effect on our business operations, financial performance and results of operations, other than its impact on the general economy.
The incremental borrowing rate used to discount future cash flows was 6.4% and 6.9% for December 31, 2024 and December 31, 2023, respectively. The Company also considered recent transactions of peer group companies for similar instruments with comparable terms and maturities as well as an analysis of current market conditions and 31 Table of Contents interest rates.
The incremental borrowing rate used to discount future cash flows was 5.3% and 6.4% for December 31, 2025 and December 31, 2024, respectively. The Company also considered recent transactions of peer group companies for similar instruments with comparable terms and maturities as well as an analysis of current market conditions and interest rates.
The Company’s financial statements include outstanding borrowings of $59.2 million as of December 31, 2024 and $79.2 million as of December 31, 2023, which are carried at amortized cost. The fair value of debt is classified within Level 3 of the fair value hierarchy.
The Company’s financial statements include outstanding borrowings of $59.2 million at both of December 31, 2025 and December 31, 2024, which are carried at amortized cost. The fair value of debt is classified within Level 3 of the fair value hierarchy.
Because our billable personnel operate remotely or on client premises, all occupancy expenses are recorded as general and administrative. Depreciation and amortization expenses amounted to $5.9 million in 2024 and $6.3 million in 2023, respectively. The decrease of $0.4 million was primarily due to the sale of the automation business in 2024.
Because our billable personnel operate remotely or on client premises, all occupancy expenses are recorded as general and administrative. Depreciation and amortization expenses amounted to $4.5 million in 2025 and $5.9 million in 2024, respectively. The decrease of $1.4 million was primarily due to the sale of the automation business on October 1, 2024.
Changes to interest rates has impacted our business operations, financial performance and results of operations, as our interest expense has decreased from $6.2 million in 2023 to $5.8 million in 2024. The Company continuously monitors these changes and evaluates any effect.
Changes to interest rates has impacted our business operations, financial performance and results of operations, as our interest expense has decreased from $5.8 million in 2024 to $4.1 million in 2025. The Company continuously monitors these changes and evaluates any effect.
We provide 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, tax indemnity receivables, accounts receivables reserve, acquisition and disposition-related costs, gain/loss on sale of business 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, acquisition and disposition-related costs, accounts receivable reserves, write-off of deferred financing cost and severance, integration, gain/loss sales of business and other expense on a tax-adjusted basis) and adjusted net income per diluted share, excluding the net of tax effect of the items set forth in the table below.
We provide 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, loss on assets disposal, change in contingent consideration, acquisition and disposition-related costs, gain on sale of business 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, acquisition and disposition-related costs, loss on assets disposal, change in contingent consideration, and severance, integration and other expense, gain sales of business on a tax-adjusted basis) and adjusted net income per diluted share, excluding the net of tax effect of the items set forth in the table below.
Direct costs also include employee taxes, health insurance, workers compensation and disability insurance. A portion of compensation expenses for certain billable employees are allocated between direct costs and selling, general and administrative costs based on relative time spent between billable and non-billable activities.
Statutory and 401(k) plans are offered to employees as appropriate. Direct costs also include employee taxes, health insurance, workers compensation and disability insurance. A portion of compensation expenses for certain billable employees are allocated between direct costs and selling, general and administrative costs based on relative time spent between billable and non-billable activities.
Net cash provided from operations was primarily attributable to our net income after adjustments for non-cash charges of approximately $10.0 million and $9.9 million provided from working capital primarily attributable to $7.1 million change in account receivables, a change in prepaid expenses and other assets of $5.0 million, $0.7 million change in contract liabilities, partially offset by a $1.6 million change in accounts payable and a $1.4 million change in accrued expenses and other liabilities; ● treasury share repurchases of $5.6 million; ● repayment of outstanding debt of $48 million; 30 Table of Contents ● payments related to tax withholding for stock-based compensation of $2.1 million; ● cash dividends paid to shareholders of $9.4 million; ● proceeds from revolving facility of $28.0 million; ● payment of contingent consideration of $1.7 million; ● proceed from the sale of automation business of $21.8 million: ● capital expenditures for property, plant and equipment of $2.8 million; and ● proceeds from issuance of employee stock purchase plan shares of $0.8 million.
Net cash provided from operations was primarily attributable to our net income after adjustments for non-cash charges of approximately $22.5 million and $6.5 million provided from working capital primarily attributable to $7.8 million change in accrued expenses and other liabilities, a change in accounts payable of $0.6 million, and $0.2 million change in prepaid expenses and other assets, partially offset by a change in account receivables of $1.8 million, and a $0.3 million change in contract liabilities ; ● treasury share repurchases of $9.3 million; ● repayment of outstanding debt of $15.0 million; ● payments related to tax withholding for stock-based compensation of $3.1 million; ● cash dividends paid to shareholders of $9.2 million; ● proceeds from revolving facility of $15.0 million; ● payment of contingent consideration of $0.6 million; ● proceeds from UST Global Inc. for final working capital settlement of $0.7 million, in connection with sale of the Automation business; ● payment for the acquisition of Martino & Partners of $1.6 million; ● proceeds from the sale of the Automation business of $2.0 million; ● capital expenditures for property, plant and equipment of $4.0 million; and ● proceeds from issuance of employee stock purchase plan shares of $0.6 million.
Such software-related performance obligations included the sale of on-premises software, hybrid and software-as-a-service licenses, as well as other software-related services. Revenue associated with the software performance obligation is primarily recognized at the point at which the software is installed, or access is granted. We sold our automation business line in Q4 2024.
Such software-related performance obligations included the sale of on-premises software, hybrid and software-as-a-service licenses, as well as other software-related services. Revenue associated with the software performance obligation is primarily recognized at the point at which the software is installed, or access is granted.
Our effective tax rate for the year ended December 31, 2024 was 45.7% compared to 29.8% for the year ended December 31, 2023.
Our effective tax rate for the year ended December 31, 2025 was 35.7% compared to 45.7% for the year ended December 31, 2024.
Revenue associated with events is recognized at the point of time at which the event occurs and is primarily comprised of sponsorships. Conversely, revenue associated with research subscriptions is recognized over time, as the customer accesses our data or related platforms.
We sold our automation business line in Q4 2024. 34 Table of Contents Revenue associated with events is recognized at the point of time at which the event occurs and is primarily comprised of sponsorships. Conversely, revenue associated with research subscriptions is recognized over time, as the customer accesses our data or related platforms.
The following table summarizes our cash flows for the years ended December 31, 2024 and 2023: Years Ended December 31, 2024 2023 (in thousands) Net cash provided by (used in): Operating activities $ 19,865 $ 12,272 Investing activities 18,992 (4,433) Financing activities (37,906) (16,198) Effect of exchange rate changes on cash (602) 498 Net increase (decrease) in cash, cash equivalents, and restricted cash $ 349 $ (7,861) As of December 31, 2024, our liquidity and capital resources included cash, cash equivalents and restricted cash of $23.2 million compared to $22.8 million as of December 31, 2023, a net increase of $0.4 million, which was primarily attributable to the following: ● our operating activities provided net cash of $19.9 million for the year ended December 31, 2024.
The following table summarizes our cash flows for the years ended December 31, 2025 and 2024: Years Ended December 31, 2025 2024 (in thousands) Net cash provided by (used in): Operating activities $ 29,011 $ 19,865 Investing activities (4,938) 18,992 Financing activities (19,547) (37,906) Effect of exchange rate changes on cash 1,070 (602) Net increase in cash, cash equivalents, and restricted cash $ 5,596 $ 349 As of December 31, 2025, our liquidity and capital resources included cash, cash equivalents and restricted cash of $28.8 million compared to $23.2 million as of December 31, 2024, a net increase of $5.6 million, which was primarily attributable to the following: ● our operating activities provided net cash of $29.0 million for the year ended December 31, 2025.
Critical Accounting Policies and Estimates The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires the appropriate application of certain accounting policies, many of which require management to make estimates and assumptions about future events and their impact on amounts reported in our consolidated financial statements and related notes.
All current and future financial risks associated with the gains and losses on investments are borne by Savings Plan participants. 33 Table of Contents Critical Accounting Policies and Estimates The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires the appropriate application of certain accounting policies, many of which require management to make estimates and assumptions about future events and their impact on amounts reported in our consolidated financial statements and related notes.
These costs are amortized over the estimated useful life of the software or system. We amortize our intangible assets (e.g., client relationships and databases) over their estimated useful lives. Goodwill related to acquisitions is not amortized but is subject to annual impairment testing.
These costs are amortized over the estimated useful life of the software or system. We amortize our intangible assets (e.g., client relationships and databases) over their estimated useful lives.
In 2024, the Company borrowed $28.0 million and subsequent repaid $48.0 million of its revolving credit facility.
In 2025, the Company borrowed $15.0 million and subsequently repaid $15.0 million of its revolving credit facility.
The decrease in revenue in the Americas was primarily attributable to a decrease in our Advisory, Network & Software Advisory Services (“NaSa”) and Automation service lines, partially offset by an increase in Research service line. The decrease in revenue in Europe was primarily attributable to a decrease in our Advisory and Automation service lines.
The increase revenue in the Americas was primarily due to an increase in the Consulting, Research, and GovernX service lines, partially offset by a decrease due to the prior year’s sale of the Automation service line and lower revenue in the Network & Software (“NaSa”) service line.
This was due to our disciplined operating approach, our higher utilization in the fourth quarter – up more than 700 basis points year over year – and our improved business mix. RESULTS OF OPERATIONS YEAR ENDED DECEMBER 31, 2024 COMPARED TO YEAR ENDED DECEMBER 31, 2023 Revenues Revenues are generally derived from fixed-fee contracts as well as engagements priced on a time and materials basis, which are recorded based on actual time worked as the services are performed.
This offering is already generating strong interest and opening up new client discussions about our broad range of AI-related capabilities. RESULTS OF OPERATIONS YEAR ENDED DECEMBER 31, 2025 COMPARED TO YEAR ENDED DECEMBER 31, 2024 Revenues Revenues are generally derived from fixed-fee contracts as well as engagements priced on a time and materials basis, which are recorded based on actual time worked as the services are performed.
(2) Marginal tax rate of 32%, reflecting U.S. federal income tax rate of 21% plus 11% attributable to U.S. states and foreign jurisdictions.
(2) Marginal tax rate of 32%, reflecting U.S. federal income tax rate of 21% plus 11% attributable to U.S. states and foreign jurisdictions. 31 Table of Contents LIQUIDITY AND CAPITAL RESOURCES Liquidity Our primary sources of liquidity are cash flows from operations, existing cash and cash equivalents and borrowings under our revolving line of credit.
The decrease in revenue in Asia Pacific was primarily attributable to a decrease in our Advisory service line. The sale of Automation service line also attributed to the decrease in revenue in the Americas and Europe.
The revenue decrease in Asia Pacific was primarily attributable to a decrease in the Consulting, NaSa and GovernX service lines.
Other Income (Expense), Net The following table presents a breakdown of other expense, net: Years Ended December 31, Percent Other income (expense), net 2024 2023 Change Change ($ in thousands) Interest income $ 782 $ 497 $ 285 57 % Interest expense (5,837) (6,190) 353 6 % Gain on the sale of business 4,532 - 4,532 nil % Foreign currency transaction gain (7) (158) 151 96 % Total other expense, net $ (530) $ (5,851) $ 5,321 91 % The total decrease of $5.3 million was primarily attributable to gain on the sale of business of $4.5 million that is related to the sale of the automation business.
Goodwill related to acquisitions is not amortized but is subject to annual impairment testing. 29 Table of Contents Other Income (Expense), Net The following table presents a breakdown of other expense, net: Years Ended December 31, Percent Other income (expense), net 2025 2024 Change Change ($ in thousands) Interest income $ 151 $ 782 $ (631) (81) % Interest expense (4,067) (5,837) 1,770 30 % Gain on the sale of business 720 4,532 (3,812) (84) % Foreign currency transaction (loss) gain (64) (7) (57) (814) % Total other expense, net $ (3,260) $ (530) $ (2,730) (515) % The total increase of $2.7 million was primarily attributable to the reduction of gain on the sale of business of $3.8 million that is related to the prior year sale of the Automation business, and lower interest income and partially offset by lower interest expense attributable to a lower debt balance and lower interest rates.
These costs were partially offset by higher acquisition- and disposition-related cost of $2.7 million and bad debt expense of $0.6 million. Compensation costs consist of a mix of fixed and variable salaries, annual bonuses, benefits and retirement plan contributions. Statutory and 401(k) plans are offered to employees as appropriate.
These costs were partially offset by the prior year’s contingent consideration adjustment of $1.5 million, higher legal reserves of $1.9 million, travel and entertainment expense of $1.2 million, and professional fees of $0.6 million. Compensation costs consist of a mix of fixed and variable salaries, annual bonuses, benefits and retirement plan contributions.
Operating Expenses The following table presents a breakdown of our operating expenses by functional category: Years Ended December 31, Percent Operating Expenses 2024 2023 Change Change (in thousands) Direct costs and expenses for advisors $ 150,306 $ 178,913 $ (28,607) (16) % Selling, general and administrative 85,634 91,271 (5,637) (6) % Depreciation and amortization 5,888 6,258 (370) (6) % Total operating expenses $ 241,828 $ 276,442 $ (34,614) (13) % Total operating expenses decreased by $34.6 million, or approximately 13%, in 2024.
The translation of foreign currency revenues into U.S. dollars positively impacted performance in Europe and Asia Pacific compared to the prior year by $2.3 million. Operating Expenses The following table presents a breakdown of our operating expenses by functional category: Years Ended December 31, Percent Operating Expenses 2025 2024 Change Change (in thousands) Direct costs and expenses for advisors $ 139,321 $ 150,306 $ (10,985) (7) % Selling, general and administrative 83,070 85,634 (2,564) (3) % Depreciation and amortization 4,538 5,888 (1,350) (23) % Total operating expenses $ 226,929 $ 241,828 $ (14,899) (6) % Total operating expenses decreased by $14.9 million, or approximately 6%, in 2025.
The decrease in operating expenses was due primarily to lower contract labor of $13.7 million, compensation expenses of $10.5 million, license fees of $5.7 million, contingent consideration adjustment of $2.5 million, restructuring costs of $2.4 million, non-cash stock-based compensation of $1.1 million, professional fees of $0.7 million and travel and entertainment expenses of $0.6 million.
The decrease in operating expenses was primarily due to lower automation license fees expense of $8.0 million, restructuring costs of $2.6 million, acquisition and disposition-related costs of $2.4 million, compensation expense of $2.7 million, expense reversal associated with an amount that was no longer due to a sub-contractor of $1.9 million, computer expense of $0.3 million, bad debt expense of $0.2 million, and stock-based compensation of $0.2 million.
Our foreign operations are subject to local government regulations and to the uncertainties of the economic and political conditions of those areas, and the revenue for our foreign operations is predominantly invoiced and collected in local currency. 26 Table of Contents Geographical revenue information for the segment is as follows: Years Ended December 31, Percent Geographic Area 2024 2023 Change Change (in thousands) Americas $ 158,853 $ 177,131 $ (18,278) (10) % Europe 67,730 87,074 (19,344) (22) % Asia Pacific 21,002 26,849 (5,847) (22) % Total revenues $ 247,585 $ 291,054 $ (43,469) (15) % Revenues decreased by $43.5 million or approximately 15% in 2024.
Geographical revenue information for the segment is as follows: Years Ended December 31, Percent Geographic Area 2025 2024 Change Change (in thousands) Americas $ 160,898 $ 158,853 $ 2,045 1 % Europe 65,507 67,730 (2,223) (3) % Asia Pacific 18,320 21,002 (2,682) (13) % Total revenues $ 244,725 $ 247,585 $ (2,860) (1) % Total revenues for the year ended December 31, 2025 decreased by $2.9 million or approximately 1% in 2025, with revenues decreasing in Europe and Asia Pacific but increasing in the Americas.
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EXECUTIVE SUMMARY 2024 was a challenging year for our industry and our firm. Enterprises were cautious in the face of challenging global economic and geopolitical conditions, pulling back on discretionary technology spending. This impacted the entire technology services industry.
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EXECUTIVE SUMMARY 2025 was a year of accelerating growth for ISG. Fueled by continuing client interest in our AI-powered transformation services, an improved business mix and our disciplined operating approach. Our 2025 results were achieved in the face of macroeconomic headwinds that resulted in longer decision cycles and cautious spending.
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But the clouds of client caution are beginning to lift, and we are starting to see signs client spending is on the rise, beginning in the U.S., in the early months of 2025. In particular, we are seeing a resurgence in cloud transformations, as clients push even more infrastructure and applications to the cloud.
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Leading the way was our Americas business, which had its strongest revenue growth since 2021, up 11 percent, excluding 2024 results from our divested automation unit.
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The cloud offers both operating efficiencies and the scalability needed to power large language models and AI-driven applications. ISG has been investing in AI for more than two years now.
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We also saw solid improvement in our EMEA region in the second half, capped by 28 percent growth in the fourth quarter as the region began to recover from earlier macro challenges. Enterprise AI consulting and research, not surprisingly, played a significant part in our growth, and now represents about 30 percent of our firmwide revenue, up from 10 percent last year.
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In that time, we’ve been making AI investments in our people, platforms and products, to better serve our clients and help them harness the power of AI to achieve operational excellence and faster growth. In February 2025, we announced a strategic repositioning of our firm, reflecting the expanding role ISG has been playing in helping our clients adopt AI at scale.
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We have served more than 350 clients with AI advisory and research services this year, focusing on strategy, sourcing, data transformation and agentic AI. That’s up more than 200 percent from the prior year. Our recurring revenue, meanwhile, continues to be a strength, with growth driven by our Research and Governance units.
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We are now positioned as a “global AI-centered technology research and advisory firm.” AI is at the heart of everything we do—from the technology strategies we develop and the partners we recommend to our clients, to the impact of AI on the future of work.
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Recurring revenues, highly valued for their predictability, represented 46 percent of our firmwide total in 2025. Our ISG Research business delivered double-digit growth, led by our ISG Provider Lens® provider evaluation research and ISG Events. Client interest in AI-related content continues to rise, evidenced by our five sold-out AI Impact Summit events held across the globe in 2025.
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We have truly become an AI-centered firm. During 2024, our two biggest innovations were the launch of our Enterprise AI Advisory business in January and the introduction of our AI-enabled sourcing platform, ISG Tango™, in March. Born out of our first-mover research on the state of the AI services market in 2023, Enterprise AI is really an extension of our existing capabilities, leveraging our market influence and permission as the world’s leading sourcing and governance advisor to help clients navigate the complexities and implications of adopting this game-changing technology at scale. 25 Table of Contents ISG has worked with more than 100 clients this past year to set AI strategy, create AI-ready infrastructure and data, build AI provider ecosystems, and establish AI governance frameworks.
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In addition, our third annual State of Enterprise AI Adoption study quickly became our most downloaded report ever. Software continues to be a significant spend category for enterprises, with global spending expected to double to more than $1.4 trillion by end of 2030, with AI as a catalyst.
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Our ISG Research business, meanwhile, has produced detailed AI market surveys and analysis covering both the service and software provider ecosystems. AI is also playing a role in modernizing our approach to sourcing advisory, through our groundbreaking ISG Tango sourcing platform.
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In 2025, our Software unit achieved double-digit growth, reflecting strong enterprise demand for insights and support in this area. 27 Table of Contents Our ISG Platforms, infused with the power of AI, also performed well, especially our ISG GovernX® supplier governance and risk management platform.
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With ISG Tango, we have digitized elements of our market-leading sourcing transactions business to better serve clients and improve transaction speed and efficiency.
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Leveraging GovernX, our Governance unit served more than 80 clients in 2025, growing both revenue and capabilities. Soon to be launched is a new AI governance solution that will help clients manage AI risk. ISG Tango™, our AI-powered, future-proof sourcing solution, has quickly become our most successful platform product to date.
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The platform draws on our unmatched data assets, intellectual property and proprietary tools, powered by AI to automate contracting and provide real-time predictive insights that streamline the transaction process and accelerate time to agreement. In 2024, we were awarded a second U.S. patent for our proprietary AI-powered contracting technology, and we have a third patent pending for a next-level solution.
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We are now managing more than $25 billion of total contract value through the platform, as we continue to transition our sourcing work to Tango.
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These patented capabilities are offered as part of our GovernX vendor compliance and risk management platform. To sharpen our focus on our core strengths, in early October we sold our automation unit to UST for more than $20 million in cash, a move that significantly improved our balance sheet.
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In addition to modernizing and ensuring our entire sourcing process is more efficient, ISG Tango also gives us the platform capabilities we need to expand into the underserved mid-market (enterprises with $10 billion of revenue or less).
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We decided to sell the business because its growing reliance on software license sales for robotic process automation was at odds with our position as an independent, third-party advisory firm. With our stronger cash position, we reduced our debt by $7 million in the fourth quarter, and by $20 million, or 25 percent, for the year.
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With the power of Tango and our dedicated approach, we have been very successful in penetrating this market, adding more than 50 new clients in 2025. Our Enterprise Change and Training as a Service (TaaS) business had a strong year, landing some of our largest multi-year accounts in 2025.
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We also paid dividends of $9.4 million and repurchased $7.7 million of ISG shares during the year. On an operating basis, ISG delivered revenues of $248 million, down 15 percent, due to a sluggish first half of the year.
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Importantly, the number of our broader advisory engagements that included OCM increased by 20 percent this year, as change management becomes more integral to our solutioning. In addition to our organic growth initiatives, we expanded our business in Europe this year by acquiring Martino & Partners, a highly regarded strategic advisory firm that serves primarily public sector clients in Italy.
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We saw an uptick in client demand in the back half of the year. Our more predictable recurring revenue streams, meanwhile, continue to grow as a percentage of our total revenues.
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This acquisition expands our addressable market in Italy, where we see an emerging growth opportunity. In another move to expand our capabilities, we acquired the AI Maturity Index in January this year. This AI readiness benchmarking and intelligence platform allows organizations to identify gaps in their workforce readiness and use a data-driven approach to achieve rapid improvement.
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For the full year, recurring revenues were $118 million dollars, or 48 percent of firm revenues. Our recurring revenues were powered by growth in our ISG Research business, with its expanded portfolio of software and technology research; in our ISG GovernX® vendor compliance and risk management business, as we added new capabilities and clients, and in our U.S.
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Our foreign operations are subject to local government regulations and to the uncertainties of the economic and political conditions of those areas, and the revenue for our foreign operations is predominantly invoiced and collected in local currency.
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Public Sector business, as more state and local government entities turn to us to support their technology modernization initiatives through long-term contracts. Adjusted EBITDA, though down from the prior year on lower revenues, also began to rebound in the fourth quarter, up 11 percent, with our adjusted EBITDA margin up 200 basis points.
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The decrease in revenue in Europe was primarily attributable to the prior year’s sale of the Automation service line and lower revenues in the NaSa and GovernX service lines, partially offset by an increase 28 Table of Contents in the Consulting service line.
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The translation of foreign currency revenues into U.S. dollars had a positive impact in Europe and Asia Pacific compared to the prior year by $0.7 million.
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(3) Adjustment relates to a specific reserve of $4.8 million related to one client with whom we ceased performing services during the fourth quarter of 2023, following the client’s failure to make payments as per the contracted payment schedule.
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Refer to Note 2 of the consolidated financial statements for further detail. LIQUIDITY AND CAPITAL RESOURCES Liquidity Our primary sources of liquidity are cash flows from operations, existing cash and cash equivalents and borrowings under our revolving line of credit.
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All current and future financial risks associated with the gains and losses on investments are borne by Savings Plan participants.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Market Risk — interest-rate, FX, commodity exposure
7 edited+0 added−0 removed6 unchanged
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Market Risk — interest-rate, FX, commodity exposure
7 edited+0 added−0 removed6 unchanged
2024 filing
2025 filing
Biggest changeThe majority of the Company’s cash and cash equivalents are with large investment-grade commercial banks. Accounts receivable and contract asset balances deemed to be collectible from customers have limited concentration of credit risk due to our diverse customer base and geographies. Actual collections from customers may differ from the Company’s estimates.
Biggest changeThe majority of the Company’s cash and cash equivalents are with large investment-grade commercial banks. Accounts receivable and contract asset balances deemed to be collectible from customers have limited concentration of credit risk due to our diverse customer base and geographies. Actual collections from 35 Table of Contents customers may differ from the Company’s estimates.
Note 13 — Financing Arrangements and Long-Term Debt in the Notes to Consolidated Financial Statements provides additional information regarding the Company’s outstanding debt obligations. All of the Company’s total debt outstanding as of December 31, 2024 was based on a floating base rate (SOFR – Secured Overnight Financing Rate) of interest, which potentially exposes the Company to increases in interest rates.
Note 13 — Financing Arrangements and Long-Term Debt in the Notes to Consolidated Financial Statements provides additional information regarding the Company’s outstanding debt obligations. All of the Company’s total debt outstanding as of December 31, 2025 was based on a floating base rate (SOFR – Secured Overnight Financing Rate) of interest, which potentially exposes the Company to increases in interest rates.
In 2024, the impact on revenues from foreign currency transactions was not material to our consolidated financial statements. Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of short-term, highly liquid investments classified as cash equivalents and accounts receivable and contract assets.
In 2025, the impact on revenues from foreign currency transactions was not material to our consolidated financial statements. Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of short-term, highly liquid investments classified as cash equivalents and accounts receivable and contract assets.
We do not enter into investments for trading or speculative purposes. Interest Rate Risk As of December 31, 2024, the Company had $59.2 million in total debt principal outstanding.
We do not enter into investments for trading or speculative purposes. Interest Rate Risk As of December 31, 2025, the Company had $59.2 million in total debt principal outstanding.
However, due to our debt to EBITDA ratio of 2.3 times and forecasted rates from external banks, we believe that our total exposure is limited and such exposure is considered in our forecasted cash uses. Foreign Currency Risk A significant portion o f our revenues are typically derived from sales outside of the United States.
However, due to our debt to EBITDA ratio of 1.85 times and forecasted rates from external banks, we believe that our total exposure is limited and such exposure is considered in our forecasted cash uses. Foreign Currency Risk A significant portion o f our revenues are typically derived from sales outside of the United States.
Adjustments resulting from the translation of these assets and liabilities are deferred and recorded as a component of stockholders’ equity. In 2024, the impact of foreign currency translation on our Statement of Stockholders’ Equity was $1.1 million.
Adjustments resulting from the translation of these assets and liabilities are deferred and recorded as a component of stockholders’ equity. In 2025, the impact of foreign currency translation on our Statement of Stockholders’ Equity was $1.9 million.
Among the major foreign currencies in which we conduct business are the Euro, the British Pound and the Australian dollar. The reporting currency of our consolidated 33 Table of Contents financial statements is the U.S. dollar.
Among the major foreign currencies in which we conduct business are the Euro, the British Pound and the Australian dollar. The reporting currency of our consolidated financial statements is the U.S. dollar.