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
This resulted in a 30.0% increase in adjusted earnings to 13 cents per share, 2 cents above expectations, and a 164% jump in operating cash flow from $2.5 million to $6.6 million.

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.

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