The Information Services Group (III) reported strong quarterly results last night. In fact, Q4 revenue increased 6.6% year over year to $74.2 million, driven by strong demand for digital transformation, cost optimization, research, workplace and governance solutions from clients in the Americas and Europe. , should have increased even more. 11.2% if not for the severe currency headwinds the company faces. But even with the latter shaving his $3.2 million off the top line, earnings for this period easily exceeded III’s guide range of $70-72 million and his $71.2 million in consensus views. rice field.A more profitable combination of products and services, combined with the efficiencies the company derives from his ISG NEXT
More importantly, our clients in industries and geographies facing the most challenging market conditions streamlined their technology and operating environments, maximizing continuous innovation and human-technology collaboration to help the company expects revenue of $73 million to $75 million in the first quarter. The midpoint of $74 million marks 2% year-on-year growth, analysts forecast, even as unfavorable foreign exchange is expected to cut another 2% from the top line. Just over $73.8 million. However, his $10.5 million, the midpoint of the company’s adjusted EBITDA outlook, is just short of the $10.7 million Street was asking for.
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On a day when investors are already selling all things small-cap, this slightly weak earnings forecast is enough to drive III’s stock down about 6% today. Slightly weaker earnings forecast primarily due to continued currency headwinds and higher costs associated with additional hiring III is making to help support a strong pipeline of demand I think it’s silly, given the Most notably, as these new hires pick up speed, the company’s consulting utilization rate should improve dramatically over the next few years from 67% last quarter. If this yields similar profitability improvements that I believe, III’s earnings performance will continue to trend better than expected and the stock will return to the rally it enjoyed prior to today’s market-driven downturn. think.
Julius Juenemann is an equity analyst at the CFA Forbes Special Situation Survey and forbes investor Investment newsletter. Information Services Group (III) forbes investorTo access this and other stocks recommended, forbes investorclick here to subscribe.