Information Services Group Inc. (III) · Nov 2, 2026 · Earnings

ISG earnings beat as AI revenue tops $30M, margins expand

Beat — Revenue $65.1M vs ~$64.0M consensus; adjusted EPS $0.10 vs ~$0.06

Information Services Group’s Q3 earnings beat revenue and EBITDA guidance, with AI revenue topping $30M and margins reaching a four-year high.

ISG is transitioning from a traditional technology research and advisory firm into an AI-centered platform, while rebuilding growth after its automation-unit divestiture. Its prior quarter already showed revenue and margin recovery, with Q3 guidance set at $63.5M-$64.5M revenue and $8.5M-$9.5M adjusted EBITDA.

The quarter beat the bar rather than merely confirming the turnaround. Revenue reached $65.1M, ahead of both the company’s prior guidance range and the published consensus of roughly $64.0M; adjusted EPS was $0.10 versus an external estimate of about $0.06. The filing states that “Reported revenues for the third quarter were $65.1million, up 4.4 percent from $62.4million in the prior year.”

Q3 2026Q3 2025Consensus / prior guide
Revenue (Third-Quarter 2026 Results)$65.1M (+4.4%)$62.4M~$64.0M consensus
Adjusted EPS (Reconciliation from GAAP to Non-GAAP)$0.10 (+11.1%)$0.09~$0.06 consensus
Adjusted EBITDA (Reconciliation from GAAP to Non-GAAP)$10.0M (+19%)$8.4M$8.5M-$9.5M prior guide
Adjusted EBITDA margin (Third-Quarter 2026 Results)15.4%13.5%
Cash from operations (Other Financial and Operating Highlights)$12.3M

The more important improvement is operating leverage. Adjusted EBITDA rose 19% on only 4.4% reported revenue growth, lifting margin to 15.4% from 13.5% and the company’s highest quarterly margin in four years. The filing says, “Third-quarter adjusted EBITDA... was $10.0million, up 19 percent from the prior year.”

The AI strategy is beginning to show up in the mix, but it is not yet a full company-wide reacceleration. AI-related revenue exceeded $30M for the first time, recurring revenue grew 7%, and Asia Pacific returned to growth at 47%. However, the Americas, the largest region, still declined 1%, so the quarter strengthens the emerging AI-and-margin story without proving that demand has broadly normalized. The filing states that “AI-related revenues reaching over $30million for the first time and recurring revenues continuing to build, up 7 percent.”

Cash generation materially improves the quality of the beat. Operating cash flow reached $12.3M, described as the highest level in five years, while cash rose to $28.5M despite $6.9M returned through buybacks and dividends. The filing states, “ISG generated cash from operations of $12.3million in the third quarter, its highest amount in five years.”

Fourth-quarter guidance keeps the momentum intact but does not reset the company’s trajectory. Revenue guidance of $64M-$65M and adjusted EBITDA guidance of $9M-$10M call for continued year-over-year growth, but the company did not provide a larger strategic upgrade or a new full-year outlook. That makes this a healthy execution beat and evidence that the AI transition is gaining traction—not a wholesale rewrite of the business story.

Bottom line: ISG delivered a genuine, broad-based beat with unusually strong cash flow and better margins, while AI revenue crossed a meaningful threshold. It advances the turnaround story modestly, but the still-soft Americas business keeps this from being a company-defining quarter.

Original filing on SEC EDGAR

ISG earnings beat as AI revenue tops $30M, margins expand | III Stock News
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