Core Insights - ISG has initiated a research study to evaluate providers within the ServiceNow ecosystem that assist enterprises in streamlining workflows across various industries [1][15] - The study will culminate in a series of ISG Provider Lens reports, focusing on AI-powered workflow transformation and the latest developments among ServiceNow partners, set to be published in April 2026 [2][5] ServiceNow Ecosystem and AI Integration - Enterprises are increasingly adopting AI agents, with ServiceNow positioned as a central control tower for these agents, as companies seek specialized, outcome-driven services for secure and scalable AI deployment [2][5] - ServiceNow's cloud-native platform is evolving rapidly, featuring recent releases like Yokohama and Zurich, which facilitate the transition to autonomous, multi-agent systems [4][5] Research Methodology and Quadrants - The research will involve surveys distributed to over 120 providers, leading to the creation of three quadrants that represent typical enterprise purchases related to ServiceNow [5] - The three quadrants include: 1. **ServiceNow Consulting and Implementation Services**: Evaluating providers that design and implement outcomes on the Now Platform [5] 2. **ServiceNow Managed Services**: Assessing providers that manage and optimize the Now Platform through various operational frameworks [5] 3. **Innovation on ServiceNow**: Covering providers that operationalize innovations using the ServiceNow AI Platform [5] Geographic Focus and Authors - The reports will analyze the global ServiceNow ecosystem market, with a focus on products and services available in regions such as the U.S., Brazil, Europe, and Asia Pacific [6] - Lead authors for the reports include ISG analysts specializing in different geographic regions [6] Customer Experience Data - The 2026 ISG Provider Lens evaluations will incorporate expanded customer experience data, reflecting actual enterprise experiences with specific provider services [8]

Core Insights - Information Services Group (ISG) is a prominent technology research and advisory firm specializing in digital transformation services, including automation, cloud, and data analytics [1] Financial Performance - On November 3, 2025, ISG reported earnings per share (EPS) of $0.06, which was below the expected $0.08, but generated revenue of approximately $62 million, surpassing the estimated $60.8 million [2][6] - The company has a price-to-earnings (P/E) ratio of 33.84, indicating strong investor confidence in its future earnings potential [3][6] - The price-to-sales ratio of 1.11 suggests that the market values ISG slightly above its revenue, indicating a reasonable valuation [3] Valuation Metrics - The enterprise value to sales ratio is 1.26, and the enterprise value to operating cash flow ratio is 10.71, suggesting that ISG is valued fairly in the market based on its operational performance and cash generation capabilities [4] - A debt-to-equity ratio of 0.66 indicates a balanced approach to financing with a moderate level of debt, while a current ratio of 2.43 reflects strong liquidity and financial stability [5]

Financial Data and Key Metrics Changes - Q3 revenues were $62 million, up 8% year-over-year, with a positive currency impact of $700,000 [5][16] - Adjusted EBITDA increased by 19% to $8.4 million, resulting in an EBITDA margin of 13.5%, up nearly 200 basis points year-on-year [6][16] - Reported net income for the quarter was $3.1 million, or $0.06 per fully-diluted share, compared to $1.1 million, or $0.02 per fully-diluted share, in the prior year [16][17] - Cash from operations was $11 million for the quarter, contributing to a total cash balance of $28.7 million [6][17] Business Line Data and Key Metrics Changes - Recurring revenues were $28 million, up 9%, representing 45% of overall revenue [6][17] - AI-related revenue reached $20 million, four times higher than the previous year, with 350 clients supported year-to-date [7][8] - The platforms business, including GovernX and ISG Tango, saw double-digit growth, contributing significantly to revenue [6][10] Market Data and Key Metrics Changes - Americas region revenues were $42 million, up 11%, driven by growth in research, software, and GovernX businesses [10][16] - Europe returned to growth with revenues of $16 million, up 7%, led by advisory services and key client engagements [11][16] - Asia-Pacific revenues were $4.2 million, down 15%, with a need for public sector spending to reignite growth [12][16] Company Strategy and Development Direction - The company is focused on leveraging AI to enhance operational efficiency and client delivery, with AI being central to its research and advisory services [8][9] - ISG aims to expand its AI offerings and strengthen its position as a technology research and advisory firm [8][9] - The company is exploring acquisition opportunities to enhance AI capabilities and recurring revenue streams [31][32] Management's Comments on Operating Environment and Future Outlook - Management noted modest improvement in the macro environment, with AI driving technology services demand [14][19] - The company anticipates continued growth in tech spending as interest rates improve, with AI remaining a long-term growth driver [14][19] - The pipeline in Europe is strong, with a cautious outlook due to the overall macro environment [24][25] Other Important Information - The company has a solid balance sheet with a gross debt-to-EBITDA ratio of 1.95 times, down from 2.4 times [18] - The headcount remained flat at 1,316, reflecting a strategic approach to hiring amid automation efforts [17][32] Q&A Session Summary Question: What is the outlook for EBITDA margin expansion? - Management highlighted internal efficiencies and a favorable mix of high-demand services as key drivers for continued margin expansion [21][22] Question: How is the pipeline in Europe developing? - The pipeline is growing, with increased appetite for optimization using AI, although transformation efforts are slower [24][25] Question: Are there any impacts from the interest rate environment? - The interest rate environment is seen as a positive sentiment driver, potentially leading to increased spending [26][29] Question: What industries are showing strong growth? - Key industries include consumer, health sciences, energy, utilities, and public sector, each driven by unique challenges [30] Question: What is the status of the Martino acquisition? - The Martino acquisition is nearly fully integrated and progressing well, contributing to recurring revenue streams [40] Question: Is there increased competition from traditional IT consultants? - Management indicated no significant competitive pressure from traditional IT consultants, viewing them as partners [41]

Core Insights - Real-time analytics has become the primary technology focus for enterprise IoT deployments, with 82% of organizations either using or planning to implement real-time data processing capabilities [1] - The integration of 5G and edge computing is facilitating the shift from simple data collection to process automation, with over 75% of enterprises layering AI and machine learning to handle large data volumes [2] - 95% of respondents anticipate measurable benefits from IoT within two years, indicating a rapid adoption of edge processing and AI [2] Group 1 - The study surveyed over 600 enterprises across ten countries, highlighting a strong emphasis on extracting immediate value from IoT data streams [1] - Organizations are prioritizing technologies that enhance rapid decision-making and operational responsiveness [1] - The evolution of IoT is marked by a transition to intelligent, autonomous systems capable of real-time adaptation and optimization [3] Group 2 - The combination of edge computing and AI is accelerating adoption timelines and broadening the range of potential applications for enterprises [2] - As edge computing infrastructure advances, enterprises are expected to unlock greater value from their IoT investments [3] - The research indicates a significant transformation in business operations from reactive to predictive decision-making [2]

Summary of Information Services Group Conference Call Company Overview - **Company Name**: Information Services Group (ISG) - **Ticker Symbol**: III - **Industry**: Technology Research and Advisory - **Global Presence**: 1,600 professionals in 20 countries - **Revenue**: Approximately $240 million with 45% recurring revenue - **Client Advocacy**: 96% advocacy from large enterprise clients [5][17][42] Core Business Activities - **Advisory Services**: ISG provides four main services: 1. Informing clients about technology trends (AI, cloud, etc.) 2. Maintaining a comprehensive technology database with over 50% market share in sourcing technology contracts 3. Offering advisory services to C-suite executives and procurement officers 4. Governance capabilities for managing large technology contracts [6][7][8][12][14] - **Data Utilization**: ISG's data is sourced from client engagements, partnerships with technology providers, and public sources, creating a proprietary database that differentiates ISG in the market [9][10][12] Market Position and Competitive Landscape - **Market Influence**: ISG influences over $200 billion in enterprise spending and operates in a large managed services and software market, which is approaching $1 trillion [12][13] - **Competitive Landscape**: Main competitors include Gartner in research and benchmarking, audit firms like Deloitte and KPMG in advisory, and internal procurement departments of large companies [28][30] Financial Performance - **Revenue Growth**: Revenue grew by 7% in the first half of 2025, with EBITDA up 17% [38] - **Recurring Revenue**: 80% of revenue is recurring, with a goal to increase this to 50% [17][38] - **Cash Flow Management**: ISG maintains a balanced approach to cash flow, focusing on dividends, share repurchases, and selective M&A [39][40] Growth Strategy - **Growth Drivers**: Key growth drivers include recurring revenue streams, the ISG Tango platform, and a flexible staffing model [36][38] - **M&A Strategy**: ISG aims for 80% organic growth and 20% inorganic growth, focusing on acquiring companies that enhance recurring revenue and technology capabilities [54][55] AI and Technology Focus - **AI Integration**: Over 50% of enterprises are developing AI roadmaps, with ISG helping clients strategize around AI implementation [21][22] - **Tango Platform**: ISG's AI-powered sourcing platform, Tango, enhances efficiency and speed in technology procurement, reducing project timelines significantly [25][48][51] Client Engagement and Advisory Services - **Client Management**: ISG offers advisory services across 15 areas, focusing on cost optimization and digital transformation [57][60] - **Industry Focus**: The company serves 20 different industry segments, with a focus on large clients with significant technology spending [19][20] Conclusion - **Investment Thesis**: ISG's unique market position, strong client advocacy, growth plan, and prudent capital management make it an attractive investment opportunity [42][44][45]