Core Viewpoint - The Xatśūll First Nation has filed an appeal against the dismissal of their petition for judicial review regarding the Mount Polley mine's tailings storage facility construction approval, while the company can continue its operations as the appeal does not affect the injunction application [1][2]. Group 1: Legal Developments - The Xatśūll First Nation's appeal seeks to overturn the August 6, 2025 dismissal of their petition related to the Consent for Material Alteration decision made on March 27, 2025 [1]. - The appeal targets the decisions made by the Minister of Mining and Critical Minerals and the Minister of Environment and Parks regarding the tailings storage facility raise to 974 meters [1]. - The appeal does not contest the injunction application, allowing the company to proceed with the construction and normal operations of the Mount Polley mine [2]. Group 2: Company Position - The company believes that the dismissal of the petition was a well-considered decision based on a thorough review process by the Province [3]. - The company remains committed to collaborating with Indigenous communities, including Xatśūll, and conducting operations in an environmentally responsible manner [3]. Group 3: Company Overview - Imperial Metals Corporation is based in Vancouver and operates the Mount Polley mine (100% ownership), Huckleberry mine (100% ownership), and holds a 30% stake in the Red Chris mine, along with 23 greenfield exploration properties in British Columbia [4].

Core Points - The Province of British Columbia has issued a permit amendment for the expansion and extension of mining activities at the Mount Polley Mine [1] - The expansion will extend the mine's operating life and allow for pit development and rock-storage area expansion within the existing site footprint [2] - The decision followed a joint review that included technical assessments, regulatory coordination, and consultations with First Nations, ensuring compliance with environmental protection standards [3] Company Overview - Imperial Metals Corporation is based in Vancouver and operates the Mount Polley mine (100% ownership), Huckleberry mine (100% ownership), and Red Chris mine (30% ownership), along with 23 greenfield exploration properties in British Columbia [5] Management Commentary - The President of Imperial stated that the permit is beneficial for the company, its workers, the local community, and First Nations partners, emphasizing the continuation of job creation and economic opportunities in the region [4]

Core Points - Imperial Metals Corporation announced the conversion of all outstanding Senior Unsecured Convertible Debentures into common shares, with 100% of the holders electing to convert prior to the deadline [1][2] - The conversion will result in the issuance of 14,687,500 common shares, and no cash redemption will occur on the Redemption Date [1][2] Group 1: Debenture Conversion Details - The Company intended to redeem $47 million principal amount of the Debentures at par on the Redemption Date, but all holders opted for conversion instead [2] - The Debenture Shares will be delivered to the holders on the Redemption Date in lieu of the redemption price [1][2] Group 2: Shareholding Changes - N. Murray Edwards' ownership increased from 72,875,775 common shares (44.62%) to 83,032,025 shares (46.64%) following the conversion [4] Group 3: Company Overview - Imperial Metals is based in Vancouver and operates several mines, including the Mount Polley mine (100%), Huckleberry mine (100%), and Red Chris mine (30%), along with 23 greenfield exploration properties in British Columbia [5]

Core Viewpoint - Information Services Group (ISG) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - Rising earnings estimates for ISG suggest an improvement in the company's underlying business, likely leading to an increase in stock price [5][10]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly Zacks Rank 1 stocks averaging a +25% annual return since 1988 [7][9]. - ISG's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [10]. Earnings Estimate Revisions for ISG - For the fiscal year ending December 2025, ISG is expected to earn $0.30 per share, with no year-over-year change, while the Zacks Consensus Estimate has increased by 6.9% over the past three months [8].

Core Viewpoint - Imperial Metals Corporation has reported significant mineralization discoveries at the Mount Polley mine, with notable copper and gold grades identified in a new exploration drill hole, FP-25-01, indicating potential for further exploration and resource expansion [1][3]. Exploration Results - Drill hole FP-25-01 intercepted two significant mineralized zones: - 7.0 metres grading 0.70% copper and 0.27 g/t gold starting at 383.0 metres - 20.0 metres grading 0.25% copper and 0.96 g/t gold starting at 417.5 metres [1][2]. - The hole was drilled 4.15 kilometres north of the operating Mount Polley mill and 1.2 kilometres from the previously mined Wight Pit, known for high copper grade ore [1][2]. Geological Insights - The mineralization is located 390 metres away from the nearest known mineralized hit, suggesting the potential for additional discoveries in the area [3]. - The presence of native copper in the intercept is unique and raises questions about similar mineralization styles nearby [3]. - The mineralized zones extend over a linear distance of more than 1,500 metres along an interpreted structural corridor, indicating a significant geological feature [3]. Future Exploration Potential - The extent of non-copper-gold bearing magnetite breccia below 437.5 metres suggests extensive hydrothermal activity, supporting further exploration in the surrounding area [3]. - Drilling has been suspended temporarily after the results from FP-25-01, with 16 additional drill holes previously designed to expand resources in the gold-rich C2 Zone [6]. Company Overview - Imperial Metals Corporation is based in Vancouver and operates the Mount Polley mine, along with other properties including the Huckleberry mine and the Red Chris mine [8].

Core Insights - Imperial Metals Corporation reported strong operational and financial results for the second quarter of 2025, aligning with guidance and driven by higher throughput and metal grades at its Mount Polley and Red Chris mines [2][3]. Financial Performance - Total revenue for the June 2025 quarter was CAD 175.8 million, up from CAD 131.7 million in the same quarter of 2024, reflecting a significant increase in operational performance [3][24]. - Adjusted EBITDA for the quarter was CAD 99.5 million, compared to CAD 54.0 million in the 2024 comparative quarter, indicating improved profitability [30][25]. - Net income for the June 2025 quarter was CAD 40.6 million (CAD 0.25 per share), up from CAD 20.4 million (CAD 0.13 per share) in the 2024 comparative quarter, driven by increased production and higher metal prices [7][24]. Production and Operations - Consolidated production for the first half of 2025 totaled 32,381,617 pounds of copper and 34,968 ounces of gold, with production from Mount Polley and Red Chris contributing significantly [2][10]. - The Mount Polley mine processed 1.759 million tonnes of ore in the second quarter of 2025, a 2.6% increase from the previous year, with copper and gold production also up due to improved grades and recovery [11][12]. - Red Chris mine production for the second quarter of 2025 was 23,479,231 pounds of copper and 22,624 ounces of gold, reflecting a 13% increase in copper production compared to the same quarter of 2024 [15][16]. Capital Expenditures - Capital expenditures for the June 2025 quarter were CAD 64.1 million, an increase from CAD 55.9 million in the 2024 comparative quarter, with significant investments in exploration and development [7][14]. Market Conditions - The average copper price in the June 2025 quarter was CAD 5.98 per pound, slightly down from CAD 6.05 per pound in the 2024 comparative quarter, while the average gold price rose to CAD 4,540 per ounce from CAD 3,199 per ounce [5][6]. Exploration and Development - The Red Chris Block Cave Feasibility Study is progressing, with approximately 11,727 metres of development completed as of June 30, 2025 [19]. - Exploration activities are ongoing, including diamond drilling at the Whiting Creek area, targeting a strong magnetic anomaly [21].

[FORM 10-Q Cover Page](index=1&type=section&id=FORM%2010-Q%20Cover%20Page) [Filing Information](index=1&type=section&id=Filing%20Information) This report is Information Services Group, Inc.'s Form 10-Q for the quarter ended June 30, 2025, with 48,195,469 common shares outstanding as of July 31, 2025 - Report Type: Quarterly Report Form 10-Q for the quarter ended June 30, 2025[1](index=1&type=chunk) - Registrant Name: INFORMATION SERVICES GROUP, INC[1](index=1&type=chunk) Company Filing Status | Status | Description | | :--- | :--- | | Accelerated Filer | ☒ | | Smaller Reporting Company | ☒ | - As of July 31, 2025, there were **48,195,469** shares of common stock outstanding, with a par value of $0.001 per share[3](index=3&type=chunk) [CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS](index=3&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This report contains forward-looking statements whose actual results may differ materially due to known and unknown risks, uncertainties, and assumptions - Forward-looking statements are based on current expectations and projections, but actual results may differ materially due to known and unknown risks, uncertainties, and assumptions[4](index=4&type=chunk) - Investors should not view past performance as an indicator of future results and should carefully review the risk factors described in this report and other SEC filings[4](index=4&type=chunk) [PART I—FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) [ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20(UNAUDITED)) This section presents Information Services Group, Inc.'s unaudited condensed consolidated financial statements for the periods ended June 30, 2025, and December 31, 2024, including balance sheets, income statements, statements of stockholders' equity, and cash flow statements, with detailed notes [CONDENSED CONSOLIDATED BALANCE SHEETS](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of June 30, 2025, the company's total assets were $200.7 million, a slight decrease from $204.5 million as of December 31, 2024, with total liabilities and stockholders' equity also showing minor reductions Total Assets Change (in thousands of dollars) | Date | Amount | | :--- | :--- | | June 30, 2025 | $200,674 | | December 31, 2024 | $204,515 | | **Change** | **$(3,841)** | | **Percentage Change** | **(1.88%)** | Total Liabilities Change (in thousands of dollars) | Date | Amount | | :--- | :--- | | June 30, 2025 | $106,575 | | December 31, 2024 | $108,229 | | **Change** | **$(1,654)** | | **Percentage Change** | **(1.53%)** | Total Stockholders' Equity Change (in thousands of dollars) | Date | Amount | | :--- | :--- | | June 30, 2025 | $94,099 | | December 31, 2024 | $96,286 | | **Change** | **$(2,187)** | | **Percentage Change** | **(2.27%)** | [CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20INCOME%20AND%20COMPREHENSIVE%20INCOME) For the three months ended June 30, 2025, revenue decreased by 4% year-over-year, but net income increased by 7%, while for the six months, revenue decreased by 6%, but net income turned profitable at $3.67 million from a loss in the prior year, significantly improving diluted EPS Key Financial Data for the Three Months Ended June 30, 2025 (in thousands of dollars) | Metric | 2025 | 2024 | Change | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | $61,565 | $64,263 | $(2,698) | (4.20%) | | Operating Income | $4,665 | $3,650 | $1,015 | 27.81% | | Net Income | $2,183 | $2,038 | $145 | 7.11% | | Diluted Earnings Per Share | $0.04 | $0.04 | $0.00 | 0.00% | Key Financial Data for the Six Months Ended June 30, 2025 (in thousands of dollars) | Metric | 2025 | 2024 | Change | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | $121,148 | $128,532 | $(7,384) | (5.74%) | | Operating Income | $8,061 | $1,280 | $6,781 | 529.77% | | Net Income (Loss) | $3,671 | $(1,351) | $5,022 | Not Applicable | | Diluted Earnings Per Share | $0.07 | $(0.03) | $0.10 | Not Applicable | [CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20STOCKHOLDERS'%20EQUITY) As of June 30, 2025, total stockholders' equity was $94.1 million, a decrease from $96.3 million as of December 31, 2024, primarily influenced by net income, other comprehensive income, treasury stock repurchases, and cash dividends, partially offset by share-based compensation Total Stockholders' Equity Change (in thousands of dollars) | Date | Amount | | :--- | :--- | | June 30, 2025 | $94,099 | | December 31, 2024 | $96,286 | | **Change** | **$(2,187)** | | **Percentage Change** | **(2.27%)** | - For the six months ended June 30, 2025, key activities affecting stockholders' equity included: net income of **$3,671 thousand**, other comprehensive income of **$1,429 thousand**, treasury stock repurchases of **$(7,313) thousand**, cash dividends paid of **$(4,608) thousand**, and share-based compensation of **$4,424 thousand**[10](index=10&type=chunk) [CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS](index=8&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) For the six months ended June 30, 2025, net cash provided by operating activities significantly increased to $12.9 million, leading to a net increase of $2.2 million in cash, cash equivalents, and restricted cash, reversing the net decrease trend from the prior year Cash Flow from Operating Activities (in thousands of dollars) | Period | 2025 | 2024 | Change | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | Six Months Ended June 30 | $12,896 | $4,516 | $8,380 | 185.57% | Cash Flow from Investing Activities (in thousands of dollars) | Period | 2025 | 2024 | Change | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | Six Months Ended June 30 | $(1,679) | $(1,914) | $235 | (12.28%) | Cash Flow from Financing Activities (in thousands of dollars) | Period | 2025 | 2024 | Change | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | Six Months Ended June 30 | $(10,207) | $(13,224) | $3,017 | (22.81%) | Net Change in Cash, Cash Equivalents, and Restricted Cash (in thousands of dollars) | Period | 2025 | 2024 | Change | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | Six Months Ended June 30 | $2,157 | $(10,923) | $13,080 | Not Applicable | [NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS](index=9&type=section&id=NOTES%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section provides detailed disclosures and explanations for the condensed consolidated financial statements, covering business description, accounting policies, revenue recognition, earnings per share, income taxes, commitments and contingencies, segment and geographical information, financing arrangements, leases, and subsequent events [NOTE 1—DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS](index=9&type=section&id=NOTE%201%E2%80%94DESCRIPTION%20OF%20ORGANIZATION%20AND%20BUSINESS%20OPERATIONS) Information Services Group, Inc. (ISG) is a global AI-centric technology research and advisory firm, founded in 2006, assisting over 900 clients, including 75 of the world's top 100 enterprises, achieve operational excellence and faster growth through proprietary market data, vendor ecosystem knowledge, and global expertise - ISG is a global AI-centric technology research and advisory firm[13](index=13&type=chunk) - The company serves over **900** clients, including **75** of the world's top **100** enterprises[13](index=13&type=chunk) - The company is known for its proprietary market data, deep understanding of the vendor ecosystem, and the expertise of its **1,300** global professionals[13](index=13&type=chunk) - The company's strategic vision is to become a high-growth, leading information-based advisory services provider through the acquisition, integration, and successful operation of market-leading brands within the data, analytics, and advisory industries[14](index=14&type=chunk) [NOTE 2—BASIS OF PRESENTATION](index=9&type=section&id=NOTE%202%E2%80%94BASIS%20OF%20PRESENTATION) The unaudited condensed consolidated financial statements are prepared in accordance with U.S. GAAP and Form 10-Q requirements, with management believing all necessary adjustments have been made, and should be read in conjunction with the company's 2024 Form 10-K, noting additional proceeds from an automation business line sale and a non-material out-of-period revenue adjustment - The unaudited condensed consolidated financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP) and the requirements of Form 10-Q[15](index=15&type=chunk) - This report should be read in conjunction with the company's annual report on Form 10-K for the year ended December 31, 2024[16](index=16&type=chunk) - In the first quarter of 2025, the company received an additional **$2.0 million** in cash proceeds from the sale of its automation business line[17](index=17&type=chunk) - In the second quarter of 2024, the company recorded a **$0.5 million** out-of-period adjustment to reduce revenue incorrectly recognized in the third quarter of 2022, which was not material to previously issued financial statements[18](index=18&type=chunk)[19](index=19&type=chunk) [NOTE 3—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=10&type=section&id=NOTE%203%E2%80%94SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the company's significant accounting policies, including the use of estimates, the definition of restricted cash, and fair value measurements categorized into Level 1, Level 2, and Level 3, also mentioning recent accounting standard updates on income tax disclosures and income statement disaggregation not expected to materially impact the consolidated financial statements - The preparation of financial statements requires management to make estimates and assumptions affecting assets, liabilities, revenue, and expenses[20](index=20&type=chunk) - Restricted cash includes cash and cash equivalents committed by the company for rent deposits, not available for general corporate purposes[21](index=21&type=chunk) - Fair value measurements are categorized into three levels: Level 1 (quoted prices in active markets), Level 2 (observable market data adjusted quotes), and Level 3 (unobservable and highly subjective measurements)[24](index=24&type=chunk) Contingent Consideration Liability Change (in thousands of dollars) | Date | Amount | | :--- | :--- | | June 30, 2025 | $695 | | December 31, 2024 | $1,225 | | **Change** | **$(530)** | | **Percentage Change** | **(43.27%)** | - Recently issued accounting standard updates (income tax disclosures and income statement disaggregation) are not expected to have a material impact on the company's consolidated financial statements[27](index=27&type=chunk)[28](index=28&type=chunk) [NOTE 4—REVENUE](index=12&type=section&id=NOTE%204%E2%80%94REVENUE) Company revenue primarily derives from service contracts, typically containing a single performance obligation, recognized over time as services are provided, with contract balances including billed and unbilled receivables (contract assets) and customer prepayments (contract liabilities); as of June 30, 2025, remaining performance obligations totaled $112.1 million, mostly expected to be completed within the next twelve months, and the company is pursuing legal recourse for a $1.3 million receivable reserve and litigating a $4.7 million disputed receivable - Most of the company's revenue is derived from service contracts, typically with a single performance obligation, recognized over time as services are performed on a time-and-materials or fixed-fee basis[29](index=29&type=chunk)[31](index=31&type=chunk) Contract Balances (in thousands of dollars) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Contract Assets | $17,323 | $18,335 | | Contract Liabilities | $9,745 | $10,058 | - As of June 30, 2025, the company had **$112.1 million** in remaining performance obligations, with most expected to be completed within the next twelve months[33](index=33&type=chunk) - The company has written off **$3.6 million** in receivables and is pursuing legal recourse for another **$1.3 million** receivable reserve, additionally, the company is litigating a disputed receivable of approximately **$4.7 million** with a client, for which no reserve has been recorded at present[34](index=34&type=chunk)[35](index=35&type=chunk) [NOTE 5—NET INCOME PER COMMON SHARE](index=14&type=section&id=NOTE%205%E2%80%94NET%20INCOME%20PER%20COMMON%20SHARE) Basic and diluted earnings per share are calculated based on net income and weighted-average common shares outstanding, with diluted EPS for the six months ended June 30, 2025, significantly improving to $0.07 from a loss of $0.03 in the prior year, reflecting a recovery in profitability Basic Earnings Per Share | Period | 2025 | 2024 | | :--- | :--- | :--- | | Three Months Ended June 30 | $0.05 | $0.04 | | Six Months Ended June 30 | $0.08 | $(0.03) | Diluted Earnings Per Share | Period | 2025 | 2024 | | :--- | :--- | :--- | | Three Months Ended June 30 | $0.04 | $0.04 | | Six Months Ended June 30 | $0.07 | $(0.03) | - For the three and six months ended June 30, 2025, **0.8 million** and **1.9 million** restricted stock units, respectively, were excluded from diluted EPS calculations as their effect was anti-dilutive[36](index=36&type=chunk) [NOTE 6—INCOME TAXES](index=15&type=section&id=NOTE%206%E2%80%94INCOME%20TAXES) For the three and six months ended June 30, 2025, the company's effective tax rates were 38.7% and 38.4% respectively, a significant increase from the prior year, primarily due to higher income before taxes, non-deductible expenses, and the impact of profits and losses in certain foreign jurisdictions, with the company currently evaluating the impact of the "One Big Beautiful Bill Act" signed on July 4, 2025 Effective Tax Rate (Three Months Ended June 30) | Year | Tax Rate | Income Before Taxes (in thousands of dollars) | | :--- | :--- | :--- | | 2025 | 38.7% | $3,600 | | 2024 | 12.0% | $2,300 | Effective Tax Rate (Six Months Ended June 30) | Year | Tax Rate | Income (Loss) Before Taxes (in thousands of dollars) | | :--- | :--- | :--- | | 2025 | 38.4% | $6,000 | | 2024 | (3.7%) | $(1,300) | - The company is evaluating the impact of the "One Big Beautiful Bill Act," signed on July 4, 2025, on its consolidated financial statements[39](index=39&type=chunk) [NOTE 7—COMMITMENTS AND CONTINGENCIES](index=15&type=section&id=NOTE%207%E2%80%94COMMITMENTS%20AND%20CONTINGENCIES) The company faces various contingencies in its ordinary course of business, with a contingent consideration liability of $0.7 million related to the Ventana Research acquisition as of June 30, 2025, while the Change 4 Growth acquisition's contingent consideration was paid in April 2025, and the company records legal reserves when losses are probable and estimable, actively defending its legal positions - As of June 30, 2025, the company has recorded a liability of **$0.7 million**, representing the estimated fair value of contingent consideration related to the Ventana Research acquisition[42](index=42&type=chunk) - The company paid **$0.5 million** in cash consideration related to the Change 4 Growth acquisition in April 2025, and no related liability exists as of June 30, 2025[44](index=44&type=chunk) - The company records contingent liabilities when losses are probable and reasonably estimable and intends to vigorously defend its legal position in all claims[45](index=45&type=chunk) [NOTE 8—SEGMENT AND GEOGRAPHICAL INFORMATION](index=16&type=section&id=NOTE%208%E2%80%94SEGMENT%20AND%20GEOGRAPHICAL%20INFORMATION) The company operates as a single reportable segment, primarily providing fact-based sourcing advisory services across the Americas, Europe, and Asia Pacific, with the CEO using net income to assess overall performance and resource allocation, and all regions experiencing revenue declines for the three and six months ended June 30, 2025, compared to the prior year, with Europe showing the largest decrease - The company operates as a single reportable segment, primarily providing fact-based sourcing advisory services[46](index=46&type=chunk) - The company primarily conducts business in the Americas, Europe, and Asia Pacific regions[46](index=46&type=chunk) - The Chief Operating Decision Maker (CODM) uses net income to assess performance and allocate resources[47](index=47&type=chunk) Revenue by Geographical Region (Three Months Ended June 30, in thousands of dollars) | Geographical Region | 2025 | 2024 | Change | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | Americas | $39,480 | $39,981 | $(501) | (1%) | | Europe | $16,637 | $18,801 | $(2,164) | (12%) | | Asia Pacific | $5,448 | $5,481 | $(33) | (1%) | | **Total** | **$61,565** | **$64,263** | **$(2,698)** | **(4%)** | Revenue by Geographical Region (Six Months Ended June 30, in thousands of dollars) | Geographical Region | 2025 | 2024 | Change | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | Americas | $80,482 | $80,821 | $(339) | (0%) | | Europe | $30,432 | $36,598 | $(6,166) | (17%) | | Asia Pacific | $10,234 | $11,113 | $(879) | (8%) | | **Total** | **$121,148** | **$128,532** | **$(7,384)** | **(6%)** | [NOTE 9—FINANCING ARRANGEMENTS AND LONG-TERM DEBT](index=17&type=section&id=NOTE%209%E2%80%94FINANCING%20ARRANGEMENTS%20AND%20LONG-TERM%20DEBT) The company amended its Senior Secured Credit Agreement in February 2023, increasing the revolving credit facility to $140.0 million, maturing on February 22, 2028, with outstanding borrowings of $59.2 million as of June 30, 2025, and December 31, 2024, and a fair value of approximately $59.6 million, and the company is currently in compliance with its financial covenants - The company amended its Senior Secured Credit Agreement in February 2023, increasing the revolving credit facility to **$140.0 million**, maturing on February 22, 2028[50](index=50&type=chunk) - The credit facility is secured by all equity interests and tangible and intangible assets of the company and its domestic subsidiaries[50](index=50&type=chunk) - As of June 30, 2025, and December 31, 2024, outstanding borrowings were **$59.2 million**, presented at amortized cost[51](index=51&type=chunk) - The fair value of the debt is approximately **$59.6 million**, classified as Level 3 in the fair value hierarchy[51](index=51&type=chunk) - The company is currently in compliance with its financial covenants[51](index=51&type=chunk) [NOTE 10—LEASES](index=19&type=section&id=NOTE%2010%E2%80%94LEASES) The company leases office space and equipment through long-term operating lease agreements extending until October 2033, and in April 2025, it entered into a new ten-year operating lease for office space in Stamford, Connecticut, with an annual base rent of $0.9 million starting November 2026, the financial impact of which is still being evaluated - The company leases office space and equipment through long-term operating lease agreements extending until October 2033[53](index=53&type=chunk) - In April 2025, the company entered into a new ten-year operating lease for office space in Stamford, Connecticut, with an annual base rent of **$0.9 million** and a **2%** annual escalation, including a termination option in the seventh year of the lease term[54](index=54&type=chunk) - The company is still evaluating the financial impact of the new lease[54](index=54&type=chunk) [NOTE 11—SUBSEQUENT EVENTS](index=19&type=section&id=NOTE%2011%E2%80%94SUBSEQUENT%20EVENTS) On August 5, 2025, the Board of Directors approved a third-quarter dividend of $0.045 per share, payable on September 26, 2025, and additionally, a company subsidiary entered into an agreement on August 1, 2025, to acquire Martino & Partners s.r.l (M&P) for a total purchase price including cash, common stock, and contingent consideration, with the acquisition expected to close on September 1, 2025 - On August 5, 2025, the Board of Directors approved a third-quarter dividend of **$0.045** per share, payable on September 26, 2025, to shareholders of record as of September 5, 2025[55](index=55&type=chunk) - On August 1, 2025, a company subsidiary entered into an agreement to acquire Martino & Partners s.r.l (M&P), with the acquisition expected to close on September 1, 2025[56](index=56&type=chunk) - The purchase price for M&P includes **€1.5 million** in cash, **$250,000** in ISG common stock, **€350,000** in cash (payable no later than April 30, 2028), and potential earn-out payments[56](index=56&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=20&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides a detailed discussion and analysis of the company's financial condition, results of operations, and liquidity, including a business overview, comparison of financial performance for the three and six months ended June 30, 2025, and 2024, and reconciliation of non-GAAP financial measures, while also highlighting key factors affecting the business and future growth plans [BUSINESS OVERVIEW](index=20&type=section&id=BUSINESS%20OVERVIEW) Information Services Group, Inc. (ISG) is a global AI-centric technology research and advisory firm focused on consolidating market position and developing new services, with strategies including evolving existing service models, geographical expansion, new industry sector development, productizing market data, expanding managed services, and growth through acquisitions, with revenue primarily from project-based fees and recurring annuity-based services - ISG is a global AI-centric technology research and advisory firm[58](index=58&type=chunk) - The company's strategic focus is on strengthening its existing market position, developing new services and products, growing through existing service models, geographical expansion, developing new industry sectors, productizing market data assets, expanding managed services offerings, and growing through acquisitions[59](index=59&type=chunk) - Revenue primarily derives from project-based fees (time-and-materials or fixed-fee) and recurring annuity-based services such as ISG GovernX, ISG Research Lens, ISG Inform, and multi-year public sector contracts[60](index=60&type=chunk)[62](index=62&type=chunk) - Company performance is primarily influenced by the utilization of full-time consultants, the number of billable days per quarter, and the number of revenue-generating professionals available to provide services[63](index=63&type=chunk) [RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2025 AND JUNE 30, 2024](index=22&type=section&id=RESULTS%20OF%20OPERATIONS%20FOR%20THE%20THREE%20MONTHS%20ENDED%20JUNE%2030%2C%202025%20AND%20JUNE%2030%2C%202024) For the three months ended June 30, 2025, company revenue decreased by 4% year-over-year to $61.6 million, primarily due to declines in automation and Network and Software Advisory (NaSa) services across all regions, partially offset by growth in Americas advisory services, while total operating expenses decreased by 6%, leading to a 28% increase in operating income and a 7% increase in net income Revenue by Geographical Region (Three Months Ended June 30, in thousands of dollars) | Geographical Region | 2025 | 2024 | Change | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | Americas | $39,480 | $39,981 | $(501) | (1%) | | Europe | $16,637 | $18,801 | $(2,164) | (12%) | | Asia Pacific | $5,448 | $5,481 | $(33) | (1%) | | **Total** | **$61,565** | **$64,263** | **$(2,698)** | **(4%)** | - The revenue decrease was primarily due to reductions in automation and Network and Software Advisory (NaSa) services, partially offset by growth in Americas advisory services, with foreign currency translation having a **$0.9 million** positive impact on Europe and Asia Pacific results[64](index=64&type=chunk) Operating Expenses (Three Months Ended June 30, in thousands of dollars) | Operating Expense Category | 2025 | 2024 | Change | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | Consultant Direct Costs and Expenses | $35,591 | $38,908 | $(3,317) | (9%) | | Selling, General and Administrative Expenses | $20,144 | $20,083 | $61 | 0% | | Depreciation and Amortization | $1,165 | $1,622 | $(457) | (28%) | | **Total Operating Expenses** | **$56,900** | **$60,613** | **$(3,713)** | **(6%)** | - The decrease in operating expenses was primarily due to a **$3.4 million** reduction in automation license fees, a **$1.9 million** reversal of subcontractor payments, a **$0.5 million** decrease in compensation expense, a **$0.4 million** decrease in restructuring costs, a **$0.4 million** decrease in conference expenses, a **$0.3 million** decrease in bad debt expense, and a **$0.2 million** decrease in contract labor expenses, partially offset by a **$1.8 million** increase in legal reserves, a **$0.9 million** increase in share-based compensation, and a **$0.8 million** increase in travel and entertainment expenses[65](index=65&type=chunk) Other Income (Expense) Net (Three Months Ended June 30, in thousands of dollars) | Category | 2025 | 2024 | Change | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | Interest Income | $37 | $222 | $(185) | (83%) | | Interest Expense | $(1,046) | $(1,568) | $522 | 33% | | Foreign Currency Transaction (Loss) Gain | $(96) | $13 | $(109) | (838%) | | **Net Other Expenses** | **$(1,105)** | **$(1,333)** | **$228** | **17%** | - The effective tax rate for the second quarter of 2025 increased to **38.7%** from **12.0%** in the second quarter of 2024, primarily due to higher income before taxes[74](index=74&type=chunk) [RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2025 AND JUNE 30, 2024](index=26&type=section&id=RESULTS%20OF%20OPERATIONS%20FOR%20THE%20SIX%20MONTHS%20ENDED%20JUNE%2030%2C%202025%20AND%20JUNE%2030%2C%202024) For the six months ended June 30, 2025, company revenue decreased by 6% year-over-year to $121.1 million, primarily due to declines in automation, Network and Software Advisory (NaSa), and GovernX service lines, especially in Europe and Asia Pacific, while total operating expenses decreased by 11%, leading to a significant increase in operating income and a shift from net loss to net profit Revenue by Geographical Region (Six Months Ended June 30, in thousands of dollars) | Geographical Region | 2025 | 2024 | Change | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | Americas | $80,482 | $80,821 | $(339) | (0%) | | Europe | $30,432 | $36,598 | $(6,166) | (17%) | | Asia Pacific | $10,234 | $11,113 | $(879) | (8%) | | **Total** | **$121,148** | **$128,532** | **$(7,384)** | **(6%)** | - The revenue decrease was primarily due to reductions in automation, Network and Software Advisory (NaSa), and GovernX service lines, especially in Europe and Asia Pacific, with foreign currency translation having a **$0.4 million** positive impact on Europe and Asia Pacific results[75](index=75&type=chunk) Operating Expenses (Six Months Ended June 30, in thousands of dollars) | Operating Expense Category | 2025 | 2024 | Change | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | Consultant Direct Costs and Expenses | $69,518 | $79,954 | $(10,436) | (13%) | | Selling, General and Administrative Expenses | $41,299 | $44,171 | $(2,872) | (7%) | | Depreciation and Amortization | $2,270 | $3,127 | $(857) | (27%) | | **Total Operating Expenses** | **$113,087** | **$127,252** | **$(14,165)** | **(11%)** | - The decrease in operating expenses was primarily due to a **$7.1 million** reduction in automation license fees, a **$3.0 million** decrease in restructuring costs, a **$2.9 million** decrease in compensation expense, a **$1.9 million** reversal of subcontractor payments, a **$0.9 million** decrease in contract labor expenses, a **$0.5 million** decrease in bad debt expense, a **$0.4 million** decrease in conference expenses, and a **$0.3 million** decrease in computer expenses, partially offset by a **$1.8 million** increase in legal reserves, a **$1.1 million** increase in share-based compensation, and a **$0.4 million** increase in professional services fees[77](index=77&type=chunk) Other Income (Expense) Net (Six Months Ended June 30, in thousands of dollars) | Category | 2025 | 2024 | Change | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | Interest Income | $92 | $479 | $(387) | (81%) | | Interest Expense | $(2,102) | $(3,068) | $966 | 31% | | Foreign Currency Transaction (Loss) Gain | $(93) | $6 | $(99) | Not Applicable | | **Net Other Income (Expense)** | **$(2,103)** | **$(2,583)** | **$480** | **19%** | - The effective tax rate for the first half of 2025 increased to **38.4%** from **(3.7%)** in the first half of 2024, primarily due to higher income before taxes[85](index=85&type=chunk) [NON-GAAP FINANCIAL PRESENTATION](index=28&type=section&id=NON-GAAP%20FINANCIAL%20PRESENTATION) This section introduces non-GAAP financial measures, including Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted Net Income Per Share, which supplement GAAP financial information by excluding certain non-cash and special expenses to provide a clearer view of the company's core operations and enhance period-over-period comparability - The company uses non-GAAP financial measures such as Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted Net Income Per Share to supplement GAAP financial information[87](index=87&type=chunk) - These non-GAAP metrics aim to provide useful information about the company's core operations and enhance comparability of financial results by excluding interest, taxes, depreciation and amortization, foreign currency transaction gains and losses, non-cash share-based compensation, interest accretion on contingent consideration, acquisition and disposition-related costs, and severance, integration, and other expenses[87](index=87&type=chunk)[89](index=89&type=chunk) [NON-GAAP FINANCIAL MEASURES](index=28&type=section&id=NON-GAAP%20FINANCIAL%20MEASURES) The company provides reconciliation tables for Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted Net Income Per Share, showing Adjusted EBITDA grew by 36% to $15.7 million and Adjusted Diluted Net Income Per Share increased by 78% to $0.16 for the six months ended June 30, 2025, indicating significant operational improvement after excluding specific items Adjusted EBITDA (Six Months Ended June 30, in thousands of dollars) | Metric | 2025 | 2024 | Change | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | Net Income (Loss) | $3,671 | $(1,351) | $5,022 | Not Applicable | | Adjusted EBITDA | $15,693 | $11,527 | $4,166 | 36.14% | Adjusted Net Income (Six Months Ended June 30, in thousands of dollars) | Metric | 2025 | 2024 | Change | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | Net Income (Loss) | $3,671 | $(1,351) | $5,022 | Not Applicable | | Adjusted Net Income | $7,814 | $4,501 | $3,313 | 73.60% | Adjusted Diluted Net Income Per Share (Six Months Ended June 30) | Metric | 2025 | 2024 | Change | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | Diluted Net Income (Loss) Per Share | $0.07 | $(0.03) | $0.10 | Not Applicable | | Adjusted Diluted Net Income Per Share | $0.16 | $0.09 | $0.07 | 77.78% | [LIQUIDITY AND CAPITAL RESOURCES](index=31&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) The company's primary liquidity sources are cash flow from operations, existing cash and cash equivalents, and its revolving credit facility, with total cash, cash equivalents, and restricted cash increasing to $25.3 million as of June 30, 2025, a net increase of $2.1 million from December 31, 2024, driven by strong operating cash flow, and the company anticipates sufficient liquidity for the next twelve months but may seek additional financing to support growth or maintain liquidity - The company's primary liquidity sources are cash flow from operating activities, existing cash and cash equivalents, and its revolving credit facility[92](index=92&type=chunk) Cash, Cash Equivalents, and Restricted Cash (in thousands of dollars) | Date | Amount | | :--- | :--- | | June 30, 2025 | $25,315 | | December 31, 2024 | $23,158 | | **Net Increase** | **$2,157** | - For the six months ended June 30, 2025, key cash flow activities included: net cash provided by operating activities of **$12.9 million**, repayment of outstanding debt of **$5.0 million**, borrowings under the revolving credit facility of **$5.0 million**, cash dividends paid to shareholders of **$4.6 million**, and treasury stock repurchases of **$4.7 million**[94](index=94&type=chunk) - The company expects existing cash and ongoing cash flow from operations to be sufficient to meet working capital, capital expenditure, and debt service requirements for the next twelve months[98](index=98&type=chunk) - On August 5, 2025, the Board of Directors approved a third-quarter dividend of **$0.045** per share, payable on September 26, 2025[99](index=99&type=chunk) - The company has no off-balance sheet financing arrangements or liabilities[100](index=100&type=chunk) [Critical Accounting Policies and Accounting Estimates](index=35&type=section&id=Critical%20Accounting%20Policies%20and%20Accounting%20Estimates) The company's financial statements are prepared in accordance with GAAP, requiring management to make estimates and judgments, and there have been no significant changes in the assessment of critical accounting policies and estimates since the Form 10-K annual report for December 31, 2024 - The company's financial statements are prepared in accordance with GAAP, requiring management to make estimates, judgments, and assumptions[103](index=103&type=chunk) - There have been no significant changes in the assessment of critical accounting policies and estimates since the annual report on Form 10-K for December 31, 2024[103](index=103&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=35&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section discloses the market risks faced by the company, including interest rate risk, foreign currency risk, and credit risk, noting that all debt is floating rate, posing interest rate increase risk with limited expected impact, foreign currency fluctuations affect revenue and expenses with translation adjustments in stockholders' equity, and credit risk is limited due to a diversified customer base and cash held in investment-grade banks - As of June 30, 2025, the company's total outstanding debt was **$59.2 million**, all based on floating benchmark rates (SOFR), posing interest rate increase risk, but the overall risk is expected to be limited[104](index=104&type=chunk)[105](index=105&type=chunk) - The company faces foreign currency translation risk (conversion of foreign currency assets and liabilities into U.S. dollars) and transaction risk (transactions denominated in non-functional currencies)[106](index=106&type=chunk)[108](index=108&type=chunk) - For the six months ended June 30, 2025, foreign currency translation had a **$1.4 million** positive impact on the statement of stockholders' equity (compared to a negative **$1.1 million** in fiscal year 2024), and the impact of foreign currency transactions on the consolidated financial statements was not material[107](index=107&type=chunk)[108](index=108&type=chunk) - The company's concentration of credit risk is limited due to a diversified customer base and geographical locations, and cash and cash equivalents primarily held in large, investment-grade commercial banks[109](index=109&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=37&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) As of June 30, 2025, the company's management, including the Chief Executive Officer and Chief Financial Officer, assessed and determined its disclosure controls and procedures to be effective, with no significant changes in internal control over financial reporting during the quarter - As of June 30, 2025, the company's disclosure controls and procedures were assessed and determined to be effective[110](index=110&type=chunk) - No significant changes in internal control over financial reporting occurred during the quarter[111](index=111&type=chunk) [PART II—OTHER INFORMATION](index=38&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) [ITEM 1. LEGAL PROCEEDINGS](index=38&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company and its consolidated subsidiaries are not currently facing any material legal proceedings requiring disclosure under Item 103 of Regulation S-K, nor have they received any such threats, though the company may be involved in certain legal proceedings in the ordinary course of business from time to time - The company and its consolidated subsidiaries are not currently facing any material legal proceedings requiring disclosure[113](index=113&type=chunk) - The company may be involved in certain legal proceedings in the ordinary course of business from time to time[113](index=113&type=chunk) [ITEM 1A. RISK FACTORS](index=38&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section advises readers to carefully review the risks discussed in the "Risk Factors" section of the company's Form 10-K annual report for December 31, 2024, specifically highlighting that changes in trade policy, including tariffs and import/export regulations, and potential employment-related and commercial indemnity claims, could adversely affect the company's business, financial condition, and results of operations - Readers should carefully review the risks discussed in the "Risk Factors" section of the company's annual report on Form 10-K for December 31, 2024[114](index=114&type=chunk) - Changes in trade policy, including new or increased tariffs and evolving import and export regulations, could have a material adverse effect on the company's business, financial condition, and results of operations[115](index=115&type=chunk)[116](index=116&type=chunk) - The company may face employment-related claims, commercial indemnity claims, and other legal proceedings, which could materially harm its business[117](index=117&type=chunk)[118](index=118&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=39&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) On August 5, 2025, the Board of Directors approved a third-quarter dividend of $0.045 per share, and the company also has a stock repurchase program, approved on August 1, 2023, authorizing the repurchase of up to $25 million of common stock, with approximately $11.0 million remaining available under the plan as of June 30, 2025 - On August 5, 2025, the Board of Directors approved a third-quarter dividend of **$0.045** per share, payable on September 26, 2025[119](index=119&type=chunk) - The company approved a new stock repurchase program on August 1, 2023, authorizing the repurchase of up to **$25 million** of common stock[120](index=120&type=chunk) - As of June 30, 2025, approximately **$11.0 million** remained available under the company's existing stock repurchase program[120](index=120&type=chunk) Repurchase Details for the Three Months Ended June 30, 2025 (in thousands of shares/dollars) | Period | Total Shares Repurchased (thousands of shares) | Average Price Paid Per Share | | :--- | :--- | :--- | | April 1 - April 30 | 300 | $3.78 | | May 1 - May 31 | 198 | $4.64 | | June 1 - June 30 | 390 | $4.73 | [ITEM 5. OTHER INFORMATION](index=39&type=section&id=ITEM%205.%20OTHER%20INFORMATION) For the three months ended June 30, 2025, no directors or officers of the company adopted, modified, or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements - For the three months ended June 30, 2025, no directors or officers of the company adopted, modified, or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements[123](index=123&type=chunk) [ITEM 6. EXHIBITS](index=40&type=section&id=ITEM%206.%20EXHIBITS) This section lists the exhibits filed or furnished as part of this report, including certifications from the Chief Executive Officer and Chief Financial Officer (Exhibits 31.1, 31.2, 32.1, 32.2) and financial statements in Inline XBRL format (Exhibits 101, 104) - Exhibits include certifications from the Chief Executive Officer and Chief Financial Officer (Exhibits 31.1, 31.2, 32.1, 32.2)[125](index=125&type=chunk) - Condensed consolidated financial statements are presented in Inline XBRL format (Exhibit 101), and the cover page interactive data file (Exhibit 104)[125](index=125&type=chunk) [SIGNATURES](index=41&type=section&id=SIGNATURES) This report was signed by Michael P. Connors, Chairman of the Board and Chief Executive Officer, and Michael A. Sherrick, Executive Vice President and Chief Financial Officer, on August 7, 2025, certifying its compliance with the requirements of the Exchange Act - This report was signed by Michael P. Connors, Chairman of the Board and Chief Executive Officer, and Michael A. Sherrick, Executive Vice President and Chief Financial Officer[131](index=131&type=chunk) - The signing date is August 7, 2025[131](index=131&type=chunk)

Financial Data and Key Metrics Changes - The company reported Q2 revenues of approximately $62 million, a 7% increase year-over-year, excluding results from the previously divested automation unit [6][22] - Adjusted EBITDA rose 17% to $8.3 million, with an adjusted EBITDA margin of 13.5%, up 240 basis points year-over-year [6][22] - Net income for the quarter was $2.2 million, or $0.04 per fully diluted share, compared to $2 million, or $0.04 per fully diluted share in the prior year [23] Business Line Data and Key Metrics Changes - Recurring revenues reached $28 million, up 7% sequentially, representing 45% of overall revenue [7] - AI-related revenue was 2.5 times higher than a year ago, accounting for nearly 20% of total revenue [8] - The Americas region saw revenues increase by 16% to $39.5 million, driven by growth in technology advisory and various industry verticals [15][22] Market Data and Key Metrics Changes - Europe experienced a 21% sequential revenue increase to $16.6 million, with double-digit growth in banking and health sciences [16][22] - Asia Pacific revenues were flat at $5.4 million compared to the prior year [22] - The company noted strong demand in the U.S. and an improving outlook in Europe, with inflation concerns being less severe than initially feared [19] Company Strategy and Development Direction - The company is focusing on AI and has made a strategic acquisition of Martino and Partners to enhance its capabilities in Italy [11][28] - The strategy includes expanding geographic reach and capabilities through tuck-in acquisitions, with a focus on recurring revenue streams [11][49] - The company aims to leverage AI to optimize technology use for clients, driving efficiency and cost savings [13][19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued demand trends in Q3, driven by cloud, AI, and infrastructure modernization spending [20] - The company anticipates that interest rate cuts will stimulate further tech spending in the next twelve months, with AI as a long-term growth driver [19] - Management acknowledged ongoing uncertainty in Europe but noted that clients are adjusting and moving forward with investments [12][19] Other Important Information - The company generated nearly $12 million in cash during the quarter, marking one of its best cash generation quarters [7][27] - The headcount remained flat at 1,311, with consulting utilization at 76% [24] - The company has approximately $11 million remaining on its share repurchase authorization [25] Q&A Session Summary Question: Sustainability of strong cash generation - Management indicated that strong cash collections were due to improved invoicing and due dates, but does not expect the same level of cash generation in the second half [33] Question: Pipeline and customer engagement - Management noted an acceleration in client engagement, particularly in sectors like energy, utilities, and healthcare, with a full pipeline of opportunities [34][36] Question: Industry verticals leading AI activity - Key sectors driving demand include energy, utilities, banking, pharma, healthcare, and public sector, with significant growth observed [42][44] Question: Acquisition of Martino and Partners - The acquisition aims to enhance capabilities in Italy, particularly in public sector engagements, and is expected to close in early September [11][46] Question: Current state of AI infrastructure - Management described the market as being in the early stages of AI adoption, with ongoing efforts to help clients improve their data infrastructure [52] Question: Labor shortages related to AI - Management stated that they are not turning away business due to labor shortages, as they are utilizing automation and training existing staff [55][57] Question: Geographic performance expectations - The company expects the Americas to continue leading growth, with Europe anticipated to return to year-over-year growth in the second half [58][60] Question: Impact of end-to-end transformation deals on margins - Management indicated that AI-related projects are strongly priced, contributing to margin expansion, with a target of 300 basis points improvement year-over-year [62][63]

Group 1: Earnings Performance - Information Services Group (ISG) reported quarterly earnings of $0.08 per share, exceeding the Zacks Consensus Estimate of $0.07 per share, with an earnings surprise of +14.29% [1] - The company posted revenues of $61.57 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 2.66%, although this represents a decline from year-ago revenues of $64.26 million [2] - Over the last four quarters, ISG has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times as well [2] Group 2: Stock Performance and Outlook - ISG shares have increased approximately 27% since the beginning of the year, significantly outperforming the S&P 500's gain of 7.1% [3] - The future performance of ISG's stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [4][6] - The current consensus EPS estimate for the upcoming quarter is $0.07 on revenues of $59.93 million, and for the current fiscal year, it is $0.29 on revenues of $239.96 million [7] Group 3: Industry Context - The Consulting Services industry, to which ISG belongs, is currently ranked in the top 12% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact ISG's stock performance [5]

Executive Summary [Second-Quarter 2025 Performance Overview](index=1&type=section&id=1.1_Second-Quarter_2025_Performance_Overview) The company delivered strong Q2 2025 results with revenue up 7% ex-divestiture and adjusted EBITDA up 17% Q2 2025 Key Performance Highlights | Metric | Value | YoY Change | | :--- | :--- | :--- | | GAAP Revenues (ex-divested unit) | $62 million | +7% | | Adjusted EBITDA | $8.3 million | +17% | | Operating Cash Flow | $12 million | From $2.2M | - Adjusted EBITDA margin increased by more than **200 basis points**[3](index=3&type=chunk) [Strategic Highlights and Outlook](index=1&type=section&id=1.2_Strategic_Highlights_and_Outlook) The firm is positioned as an AI-centered advisor, acquiring Martino & Partners and providing optimistic Q3 guidance - Strategic Focus: **AI-centered positioning**, investment in expanded AI capabilities, and long-term focus on operational excellence[5](index=5&type=chunk) - Acquisition: Agreed to acquire Martino & Partners, a strategic advisory firm in Italy, to expand client base, geographic footprint, and AI capabilities[4](index=4&type=chunk)[6](index=6&type=chunk)[7](index=7&type=chunk) H1 2025 Adjusted EBITDA Performance | Metric | Value | YoY Change | | :--- | :--- | :--- | | Adjusted EBITDA | ~$16 million | +36% | | Adjusted EBITDA Margin | N/A | +400 bps | Second-Quarter 2025 Financial Results [Consolidated GAAP Financial Performance](index=2&type=section&id=2.1_Consolidated_GAAP_Financial_Performance) Q2 2025 GAAP revenues were $61.6 million, with operating and net income increasing year-over-year Q2 2025 GAAP Financials | Metric (Q2 2025) | Amount ($M) | YoY Change (Reported) | YoY Change (Excl. Divested Unit) | | :--- | :--- | :--- | :--- | | GAAP Revenues | 61.6 | -4% | +7% | | Operating Income | 4.7 | +27.0% | N/A | | Net Income | 2.2 | +7.4% | N/A | | Diluted EPS | 0.04 | 0% | N/A | - Currency translation positively impacted reported revenues by **$0.8 million** versus the prior year[8](index=8&type=chunk) [Non-GAAP Adjusted Financial Performance](index=3&type=section&id=2.2_Non-GAAP_Adjusted_Financial_Performance) Q2 2025 non-GAAP results showed strong growth, with adjusted EBITDA up 17% and margin expansion of 241 bps Q2 2025 Non-GAAP Adjusted Financials | Metric (Q2 2025) | Amount ($M) | YoY Change | | :--- | :--- | :--- | | Adjusted EBITDA | 8.3 | +17% | | Adjusted Net Income | 4.1 | +9.5% | | Adjusted Diluted EPS | 0.08 | 0% | - Adjusted EBITDA margin was **13.5%**, up **241 basis points** from 11.1% in the prior year[13](index=13&type=chunk) [Revenue by Geography](index=2&type=section&id=2.3_Revenue_by_Geography) Excluding the divested unit, Americas revenue grew 16% while Europe and Asia Pacific regions declined Q2 2025 Revenue by Region (Excluding Automation Unit) | Region (Q2 2025) | Revenue (Excl. Automation) ($M) | YoY Change (Excl. Automation) | Reported YoY Change | | :--- | :--- | :--- | :--- | | Americas | 39.5 | +16% | -1% | | Europe | 16.6 | -7% | -12% | | Asia Pacific | 5.4 | -1% | -1% | [Cash Flow and Liquidity](index=3&type=section&id=2.4_Cash_Flow_and_Liquidity) The company generated $11.9 million in operating cash flow, a significant increase from the prior year Q2 2025 Cash Flow and Balance | Metric | Value | YoY Change / QoQ Change | | :--- | :--- | :--- | | Cash from Operations (Q2) | $11.9 million | From $2.2M in Q2 2024 | | Cash Balance (June 30, 2025) | $25.2 million | +25% from March 31, 2025 | - During the second quarter, ISG paid dividends of **$2.4 million** and repurchased **$4.0 million** of shares[14](index=14&type=chunk) Strategic Developments [Martino & Partners Acquisition](index=2&type=section&id=3.1_Martino_%26_Partners_Acquisition) The company agreed to acquire Italian advisory firm Martino & Partners to expand its European presence and AI capabilities - Target: Martino & Partners, a highly respected strategic advisory firm serving public and private sector clients in Italy[6](index=6&type=chunk) - Expected Closing: **Early September**[6](index=6&type=chunk) - Strategic Benefits: Expands ISG's client base, geographic footprint, and capabilities in Italy (including AI); adds over **20 new clients**; expands public sector reach; and establishes a strong presence in northern Italy[7](index=7&type=chunk)[8](index=8&type=chunk) Outlook and Shareholder Returns [Third-Quarter 2025 Guidance](index=3&type=section&id=4.1_Third-Quarter_2025_Guidance) The company projects Q3 2025 revenues of $60.5-$61.5 million and adjusted EBITDA of $7.5-$8.5 million Q3 2025 Financial Guidance | Metric (Q3 2025 Guidance) | Range ($M) | | :--- | :--- | | Revenues | 60.5 - 61.5 | | Adjusted EBITDA | 7.5 - 8.5 | [Quarterly Dividend Declaration](index=3&type=section&id=4.2_Quarterly_Dividend_Declaration) The Board of Directors declared a third-quarter dividend of $0.045 per share Q3 2025 Dividend Details | Metric | Value | | :--- | :--- | | Dividend per Share | $0.045 | | Payment Date | Sep 26, 2025 | | Record Date | Sep 5, 2025 | Additional Information [Conference Call Information](index=3&type=section&id=5.1_Conference_Call_Information) A conference call to discuss Q2 results was scheduled for August 7, 2025, at 9 a.m. U.S. Eastern Time - Date & Time: **August 7, 2025, 9 a.m. U.S. Eastern Time**[17](index=17&type=chunk) - Access Details: Dial +1 (800) 715-9871 (U.S.) or +1 (646) 307-1963 (International), Access Code: 9414856. A recording will be available on ISG's investor relations page[17](index=17&type=chunk) [Forward-Looking Statements](index=3&type=section&id=5.2_Forward-Looking_Statements) Forward-looking statements are subject to risks and uncertainties and are not guarantees of future results - Nature: Forward-looking statements are not guarantees of future results and are subject to certain risks and uncertainties[18](index=18&type=chunk) - Key Risks: Failure to secure new engagements, ability to hire and retain qualified employees, management of growth, success of international expansion, competition, currency fluctuations, ability to successfully consummate or integrate strategic acquisitions, and the success of ISG's focus on AI advisory and AI-powered platforms[19](index=19&type=chunk) [Non-GAAP Financial Measures Explanation](index=4&type=section&id=5.3_Non-GAAP_Financial_Measures_Explanation) Non-GAAP measures are provided to enhance comparability and transparency of ongoing operating results - Purpose: To enhance the evaluation of ongoing operating results by improving comparability between periods and providing greater transparency of key performance measures, excluding non-cash and certain other special charges[20](index=20&type=chunk) - Non-GAAP Measures Defined: Adjusted EBITDA, adjusted net income, adjusted net income per diluted share, adjusted EBITDA margin, and selected financial data on a constant currency basis[21](index=21&type=chunk) - Constant Currency Presentation: Excludes the impact of year-over-year fluctuations in foreign currency exchange rates to facilitate period-to-period comparisons of business performance[22](index=22&type=chunk)[23](index=23&type=chunk) [About Information Services Group (ISG)](index=5&type=section&id=5.4_About_Information_Services_Group_%28ISG%29) ISG is a global AI-centered technology research and advisory firm serving over 900 clients worldwide - Company Type: Global **AI-centered** technology research and advisory firm[25](index=25&type=chunk) - Client Base: Trusted partner to more than **900 clients**, including **75 of the world's top 100 enterprises**[25](index=25&type=chunk) - Expertise: Known for proprietary market data, in-depth knowledge of provider ecosystems, and **1,600 professionals** worldwide, leveraging AI to help organizations achieve operational excellence and faster growth[25](index=25&type=chunk) [Financial Statements (Unaudited)](index=6&type=section&id=6_Financial_Statements_%28Unaudited%29) [Condensed Statement of Income and Comprehensive Income](index=6&type=section&id=6.1_Condensed_Statement_of_Income_and_Comprehensive_Income) This presents the unaudited GAAP income statements for the three and six months ended June 30, 2025 and 2024 Condensed Statement of Income and Comprehensive Income (Unaudited) | Metric | Three Months Ended June 30, 2025 ($M) | Three Months Ended June 30, 2024 ($M) | Six Months Ended June 30, 2025 ($M) | Six Months Ended June 30, 2024 ($M) | | :--- | :--- | :--- | :--- | :--- | | Revenues | 61.6 | 64.3 | 121.1 | 128.5 | | Operating income | 4.7 | 3.7 | 8.1 | 1.3 | | Net income (loss) | 2.2 | 2.0 | 3.7 | (1.4) | | Diluted EPS | 0.04 | 0.04 | 0.07 | (0.03) | [Reconciliation from GAAP to Non-GAAP](index=7&type=section&id=6.2_Reconciliation_from_GAAP_to_Non-GAAP) This provides a reconciliation of GAAP net income to non-GAAP adjusted EBITDA and adjusted net income Reconciliation from GAAP to Non-GAAP (Unaudited) | Metric | Three Months Ended June 30, 2025 ($M) | Three Months Ended June 30, 2024 ($M) | Six Months Ended June 30, 2025 ($M) | Six Months Ended June 30, 2024 ($M) | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) | 2.2 | 2.0 | 3.7 | (1.4) | | Adjusted EBITDA | 8.3 | 7.1 | 15.7 | 11.5 | | Adjusted net income | 4.1 | 3.8 | 7.8 | 4.5 | | Adjusted diluted EPS | 0.08 | 0.08 | 0.16 | 0.09 | [Selected Financial Data - Constant Currency Comparison](index=8&type=section&id=6.3_Selected_Financial_Data_-_Constant_Currency_Comparison) This presents selected financial data on an as-reported and constant currency basis Q2 Selected Financial Data - Constant Currency Comparison | Metric (Q2) | As Reported (2025) ($M) | Constant Currency Impact (2025) ($M) | Adjusted (2025) ($M) | As Reported (2024) ($M) | Constant Currency Impact (2024) ($M) | Adjusted (2024) ($M) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 61.6 | 0.1 | 61.7 | 64.3 | 1.0 | 65.3 | | Operating income | 4.7 | (0.1) | 4.5 | 3.7 | 0.1 | 3.8 | | Adjusted EBITDA | 8.3 | (0.1) | 8.2 | 7.1 | 0.2 | 7.3 | H1 Selected Financial Data - Constant Currency Comparison | Metric (H1) | As Reported (2025) ($M) | Constant Currency Impact (2025) ($M) | Adjusted (2025) ($M) | As Reported (2024) ($M) | Constant Currency Impact (2024) ($M) | Adjusted (2024) ($M) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 121.1 | 1.4 | 122.5 | 128.5 | 1.7 | 130.3 | | Operating income | 8.1 | (0.0) | 8.0 | 1.3 | 0.1 | 1.3 | | Adjusted EBITDA | 15.7 | 0.0 | 15.7 | 11.5 | 0.2 | 11.8 |