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]

Financial Data and Key Metrics Changes - Q1 2025 revenues reached $60 million, a 5% increase year-over-year, excluding the divested automation unit [6][22] - Adjusted EBITDA rose 68% to $7.4 million, with an adjusted EBITDA margin of 12.4%, up 554 basis points year-over-year [7][23] - Net income for Q1 was $1.5 million, or $0.03 per fully diluted share, compared to a net loss of $3.4 million, or $0.07 per share, in the prior year [23] Business Line Data and Key Metrics Changes - Recurring revenues in Q1 were $26 million, representing 44% of overall revenue, showing slight growth from Q4 [8] - The Americas region saw a 17% revenue increase to $41 million, driven by growth in technology advisory and various industry verticals [11][22] - Europe revenue decreased by 13% to $13.8 million, while Asia Pacific revenue fell 15% to $4.8 million [22] Market Data and Key Metrics Changes - The Americas experienced the largest year-over-year growth in two years, indicating strong demand for technology services [7] - Europe is expected to show signs of recovery later in the year, with increased demand for technology advisory services [14] - Asia Pacific revenues were impacted by sluggish government spending, but growth is anticipated post-elections [15] Company Strategy and Development Direction - The company is focusing on AI integration across all services, with over 200 clients receiving AI-focused research and advisory services [8][53] - The ISG Tango platform is enhancing service delivery and opening up mid-market opportunities, contributing to margin acceleration [9][66] - The company aims to leverage technology for cost optimization and competitive advantage, particularly in the context of market disruptions [10][27] Management's Comments on Operating Environment and Future Outlook - Management noted strong demand in the U.S. for both transformation and optimization services, expecting double-digit growth in Q2 [30] - There is uncertainty in Europe due to geopolitical factors and tariffs, but an increase in the pipeline is anticipated [31][33] - The company remains optimistic about its portfolio mix to meet client needs despite macroeconomic uncertainties [19][27] Other Important Information - The company ended Q1 with cash of $20.1 million and a gross debt to EBITDA ratio of 2.1 times, indicating a solid balance sheet [24][25] - The company paid dividends of $2.2 million and repurchased $3.3 million of stock during the quarter [24] Q&A Session Summary Question: How would you characterize growth in The Americas? - Management expects double-digit growth to continue in Q2, driven by strong demand [30] Question: What are the expectations for Europe? - There is uncertainty in Europe, but an increase in the pipeline is noted, with expectations for growth in Q3 and Q4 [31][33] Question: How is utilization impacting hiring needs? - Utilization is at a high level, and hiring will be aligned with demand in the pipeline [36][39] Question: What is the strategy for cash allocation? - The company is evaluating opportunities for buybacks, dividends, M&A, and business investments [40][42] Question: How is the company addressing AI demand? - The company is focusing on training and hiring for AI-related roles, with no significant wage pressure observed [50][60] Question: What is the outlook for the mid-market with ISG Tango? - The platform is expected to enhance margins and open new market opportunities, particularly in the mid-market [66]

Financial Data and Key Metrics Changes - The company reported revenues of $57.8 million for Q4 2024, a decrease of 2% compared to the prior year, with a positive currency impact of $300,000 [35] - Adjusted EBITDA for the quarter was $6.5 million, an increase of 11% from $5.9 million in the previous year, resulting in an EBITDA margin of 11.3%, up 240 basis points from 8.9% [36] - The company reduced total debt by 25% or $20 million for the year, ending with a debt level of $59.2 million [39] Business Line Data and Key Metrics Changes - Recurring revenues represented 45% of firm-wide revenues, totaling $108 million for the full year, excluding the automation unit [13][36] - The Americas region saw revenues of $37.9 million, up 6%, with double-digit growth in banking, public sector, manufacturing, energy, and utilities [35][22] - European revenues were $14.9 million, down 15%, while Asia Pacific revenues were $5 million, down 16% [35] Market Data and Key Metrics Changes - The U.S. public sector business is focused solely on state and local governments, with a 17% increase in the public sector [18][54] - The European market remains cautious due to macroeconomic conditions, with expectations for improvement later in the year [26][56] - Asia Pacific revenues decreased, but there was double-digit growth in banking, consumer services, energy, utilities, and health sciences [29] Company Strategy and Development Direction - The company announced a strategic repositioning to become a global AI-centered technology research and advisory firm, reflecting its investments in AI [14][15] - AI is integrated into client engagements, with a focus on helping clients adopt AI at scale and improve operational efficiency [15][19] - The company aims to leverage AI to enhance its proprietary client platforms, such as ISG Tango, which saw a 40% increase in sourcing contract value [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about market conditions, citing a resurgence in cloud transformation and lifting market hesitation [19][20] - The company expects continued growth in the Americas, with Europe anticipated to pick up later in the year [32] - Management highlighted strong demand for technology services, particularly in the U.S., and a robust sales pipeline [31][66] Other Important Information - The company generated over $15 million in cash flow from operations in the last two quarters [12] - The automation unit was sold for more than $20 million, significantly improving the balance sheet [10] - The company plans to target revenues of between $58 million and $59 million for Q1 2025, with adjusted EBITDA expected to be between $6.5 million and $7.5 million [32] Q&A Session Summary Question: What gives confidence that things are improving in the market? - Management noted that the completion of elections in the U.S. has created certainty, and industries like banking and energy are showing growth despite market noise [49][52] Question: How will cash be utilized post-automation sale? - The company plans to focus on debt reduction, stock buybacks, and potential M&A opportunities to accelerate growth [58][60] Question: What areas are strongest in the sales pipeline in the Americas? - The cost optimization and AI transformation segments are expected to drive growth, with increased demand for efficiency in operations [66][68] Question: Can you elaborate on the strategic repositioning? - The company has invested in AI-specific research and advisory services, enhancing its offerings and positioning in the market [80][84] Question: What is the outlook for recurring revenue? - Management remains optimistic about growth in recurring revenue, particularly in public services and long-term contracts [90] Question: What are the key end markets to watch in 2025? - Key markets include energy, utilities, and health sciences, while automotive may face challenges [92][93] Question: Are clients moving beyond exploratory phases in AI? - Clients are increasingly committing to longer-term contracts as they recognize the efficiencies AI can bring [95][97] Question: Is there a need for brand reinvestment in Europe and APAC? - Management stated that the brand is strong globally, with geopolitical factors affecting spending in Europe and APAC [99][100] Question: What is the potential for training-as-a-service? - Training-as-a-service is expected to be a recurring revenue stream, leveraging AI to enhance efficiency in training delivery [102][105]