Key Highlights

  • III reported third-quarter 2026 Revenue of $65.1 million, up 4.4% from $62.4 million a year earlier.
  • AI-related revenue grew 56% to almost $34 million, more than half of total revenue.
  • Adjusted EBITDA rose 18.7% to $10.0 million, a 15.4% Margin that is up nearly 200 basis points.
  • GAAP Net Income was $3.4 million, or $0.07 per diluted share, versus $3.1 million, or $0.06.
  • Fourth-quarter revenue is targeted at $64 million to $65 million, with adjusted EBITDA of $9 million to $10 million.

AI-Related Revenue Climbs 56% and Passes Half of Total Sales

Information Services Group (NASDAQ:III) reported results for the third quarter ended Sep 30, 2026 on Nov 2, 2026, with revenue of $65.1 million, up 4.4% from $62.4 million. Foreign currency added about $0.2 million to the quarter.

The firm is a global technology research and advisory company that helps clients with sourcing, technology Investment decisions and the governance of provider relationships, and it has about 1,500 professionals. Management said it pivoted to an AI-centered model roughly two years ago.

AI-related revenue rose 56% to almost $34 million, over 50% of total revenue, a level management had not expected to reach until later in 2027. Recurring Revenue grew nearly 8% to a quarterly high of $30.5 million, led by its research business.

Asia Pacific Up 46.8% and Europe Up 6.2% Offset a Flat Americas Region

Americas revenue was $41.9 million, roughly flat with last year, as some engagements slipped into the fourth quarter. Management expects a strong fourth quarter in the region and cited double-digit growth in research and strength in energy and public sector work.

Europe contributed $17.0 million, up 6.2%, while Asia Pacific rose 46.8% to $6.2 million, which management described as a return to growth in the region.

For the nine months ended Sep 30, 2026, revenue was $191.8 million, up $8.3 million, or about 5%, from $183.5 million. Consulting utilization was 74%, up 190 basis points, and headcount was 1,273.

Operating Margin Reaches 9.9%, a Four-Year High, as Net Income Edges Up

Operating income rose 40.6% to $6.5 million, lifting Operating Margin to 9.9%, up 255 basis points, which management attributed to pricing and cost control. Adjusted EBITDA grew 18.7% to $10.0 million, the eighth straight quarter of double-digit growth and the highest margin in four years.

GAAP net income was $3.4 million, or $0.07 per diluted share, compared with $3.1 million, or $0.06, a year ago. Adjusted net income was $5.0 million, or $0.10 per diluted share.

Operating cash flow was $12.3 million, up from $5.2 million in the second quarter, and cash ended at $28.6 million versus $23.7 million three months earlier.

Debt at 1.6 Times EBITDA, a $0.045 Dividend and Fourth-Quarter Targets

Total Debt principal was $59.2 million, and the gross debt-to-EBITDA ratio improved to 1.6 times from 1.9 times at Dec 31, 2025. The average borrowing rate was 5.4%, down 87 basis points. During the quarter the company paid $2.4 million in dividends and repurchased $4.3 million of stock, with about $27.9 million left on its repurchase authorization.

The board approved a fourth-quarter dividend of $0.045 per share, payable Dec 18, 2026 to holders of record on Dec 4, 2026. Management is targeting fourth-quarter revenue of $64 million to $65 million and adjusted EBITDA of $9 million to $10 million, with the delayed Americas engagements a key item to track.