Information Services Group (III) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue reached $61.2 million, up 3% year-over-year, driven by strong growth in Europe and supported by AI-related services.

• Adjusted EBITDA was $8.3 million, up 12% year-over-year, with margin expanding over 100 basis points to 13.5%.

• Net income rose to $2.7 million ($0.05 per diluted share), up from $1.5 million ($0.03 per share) last year, an 83% increase.

• Signed the largest deal in company history: a multi-year, $17 million governance contract with a global manufacturer, supporting $300 million in tech spend.

• Completed acquisitions of Aiimi and AI Maturity Index, enhancing AI offerings and strategic positioning.

Financial highlights

• Operating income was $5 million, up 47.7% year-over-year, with an operating margin of 8.2%.

• Cash at quarter end was $22.7 million, with net cash used in operations of $700,000 due to seasonality.

• Paid $2.2 million in dividends and repurchased $2.1 million of stock during the quarter.

• Outstanding borrowings stood at $59.2 million, with a fair value of $59.5 million.

• Operating expenses remained flat year-over-year at $56.2 million.

Outlook and guidance

• Q2 2026 revenue guidance: $62.5–$63.5 million; adjusted EBITDA: $8–$9 million, with continued year-over-year growth and margin expansion.

• Management expects current cash and operations to meet working capital, capex, and debt needs for at least the next twelve months.

• Asia Pacific expected to grow 20% sequentially in Q2, Americas pipeline robust, and Europe maintaining strong momentum.