ISG Annual Revenue Down 15%, but Steadies in Q4

Stamford, CT-based technology research and advisory firm ISG has announced full year revenue down 15% to $247.6m, and adjusted EBITDA down 33% to $25.1m. Q4 revenue was down 13% to $57.8m, but the drop was mostly the result of a divestment - without this, the decline would have been only 2.2%.

Stamford, CT-based ISG (Information Services Group) was established in 2006-7 by former Nielsen / VNU man Michael P. Connors, and employs around 1,600 people in more than twenty countries. Its services include digital transformation and other change management, sourcing advisory, strategy and operations design, market intelligence, technology research and analysis.

The firm sold its robotic process automation (RPA) unit to digital transformation solutions company UST at the beginning of October last year, for $27m in cash.

Connors (pictured) says of the results: 'We delivered a strong fourth quarter, beginning with the sale of our automation unit, which significantly strengthened our balance sheet. Our profitability improved, with adjusted EBITDA up 11 percent and our adjusted EBITDA margin up more than 200 basis points. We generated strong cash flow and have reduced our debt by 25 percent from a year ago. And we saw a return to growth in the Americas, our largest region, with revenues up 6 percent, excluding the results of our divested automation unit. Among our recurring revenue streams, we saw particular strength in our GovernX business, with recurring revenues accounting for 45 percent of our firmwide revenues in the quarter'.

For the first quarter of this year the company is forecasting revenue of between $58m and $59m, and adjusted EBITDA of $6.5m-$7.5m. Connors notes a demand environment 'gradually improving... as clients accelerate their overall technology spending to facilitate broadscale adoption of AI, especially in areas including cloud computing, data analytics and data governance', and says ISG is 'ideally positioned' to benefit from this.

Web site: www.isg-one.com .