Overview

* ISG Q3 revenue grows 8% yr/yr, beating analyst expectations

* Adjusted EBITDA for Q3 rises 19%, exceeding analyst estimates

* ISG generates $11.1 mln cash from operations, up from $8.8 mln last year

Outlook

* Company expects Q4 revenue between $60.5 mln and $61.5 mln

* ISG forecasts Q4 adjusted EBITDA between $7.5 mln and $8.5 mln

* Company sees stronger U.S. demand for AI and cost optimization

Result Drivers

* AI-CENTERED APPROACH - ISG attributes revenue growth to AI-powered services and products, meeting client demand for technology investments and cost optimization

* REGIONAL GROWTH - Revenue in the Americas rose 11% and Europe returned to growth with a 7% increase, excluding automation unit results

* PROFITABLE MIX - Adjusted EBITDA rose 19% due to a more profitable business mix and focus on operating efficiency

Key Details

Metric Beat/Mis Actual Consensu

s s

Estimate

Q3 Beat $62 mln $60.97

Revenue mln (5

Analysts

)

Q3 EPS $0.06

Q3 Beat $4.70 $3.74

Adjusted mln mln (4

Net Analysts

Income )

Q3 Beat $8.40 $7.90

Adjusted mln mln (5

EBITDA Analysts

)

Q3 13.50%

Adjusted

EBITDA

Margin

Q3 $4.60

Operatin mln

g Income

Analyst Coverage

* The current average analyst rating on the shares is "strong buy" and the breakdown of recommendations is 3 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

* The average consensus recommendation for the it services & consulting peer group is "buy."

* Wall Street's median 12-month price target for Information Services Group Inc ( III ) is $6.38, about 13.6% above its October 31 closing price of $5.51

* The stock recently traded at 16 times the next 12-month earnings vs. a P/E of 14 three months ago

Press Release:

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)