Stonegate Capital Partners Updates Coverage on Information Services Group, Inc. (III) 2Q26
Rhea-AI Summary
Stonegate Capital Partners updated its coverage on Information Services Group (NASDAQ: III) following 2Q26 results. Revenue rose 6.4% year over year to $65.5M and adjusted EBITDA increased 13% to $9.4M, both above guidance, with adjusted EBITDA margin expanding 80 bps to 14.3%.
According to Stonegate, AI-related revenue grew 64% to $26M and recurring revenue increased 7% to a record $30M, broadening growth in the Americas and Europe. Management indicated the sales pipeline is among the strongest historically and guided to continued year-over-year growth and margin expansion in 3Q26, despite client decision timing remaining a key visibility constraint.
Positive
- Revenue 2Q26 up 6.4% y/y to $65.5M, above guidance
- Adjusted EBITDA 2Q26 up 13% y/y to $9.4M; margin 14.3%, +80 bps
- AI-related revenue up 64% y/y to $26M; nearly half of clients contributing
- Recurring revenue up 7% y/y to a record $30M, improving visibility
- 3Q26 outlook guided to continued y/y growth and margin expansion
Negative
- Client and enterprise decision timing remains a primary visibility constraint
- Asia-Pacific region still monitored for a return to growth
Key Figures
Historical Context
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| Aug 05 | 2Q26 earnings report | Positive | +17.4% | Revenue and adjusted EBITDA exceeded guidance, with higher margins and a share repurchase authorization. |
| Aug 04 | Provider recognition | Positive | +2.1% | Hexaware was named a Top 15 Sourcing Standout in the 2Q 2026 ISG Index. |
| Aug 04 | AI infrastructure report | Positive | +2.1% | ISG released a Switzerland cloud and data-center services report focused on AI-ready infrastructure. |
| Aug 04 | AI infrastructure report | Positive | +2.1% | ISG released a Germany report covering AI demand and private and hybrid cloud strategies. |
| Jul 30 | Banking study launch | Neutral | -3.3% | ISG launched a banking technology study with findings scheduled for publication in December 2026. |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Recent positive announcements generally aligned with gains, while one neutral research-study launch diverged with a decline.
Key Terms
ebitda financial
operating leverage financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
Dallas, Texas--(Newsfile Corp. - August 10, 2026) - Information Services Group, Inc. (NASDAQ: III): Stonegate Capital Partners Updates Coverage on Information Services Group, Inc. (NASDAQ: III). III's 2Q26 results improved the forward setup as revenue and adj. EBITDA exceeded guidance, AI-related revenue accelerated, and recurring revenue reached a record. The differentiated read-through is that AI is strengthening both sides of ISG's earnings model, generating demand across governance, sourcing, research, and advisory while supporting delivery efficiency, higher-value mix, and margin expansion. Underlying growth remained mid-single digits excluding FX and Martino, with growth broadening across the Americas and Europe despite measured enterprise decision-making. Record recurring revenue expands visibility beneath ISG's project-oriented advisory work. Management said the pipeline is probably as strong as it has ever been, although client decision timing remains the primary visibility constraint. We are keeping an eye on AI governance expansion, larger opportunity conversion, recurring-revenue mix, and APAC's return to growth.
To view the full announcement, including downloadable images, bios, and more, click here.
Key Takeaways:
Revenue increased
6.4% y/y to$65.5M and adj. EBITDA increased13% to$9.4M , both above guidance, while adj. EBITDA margin expanded 80 bps to14.3% . The quarter reinforces the view that III is converting improving demand, pricing, higher-value advisory mix, and AI-enabled delivery efficiencies into better operating leverage.AI-related revenue increased
64% y/y to$26M , with nearly half of clients now generating AI-related revenue, while recurring revenue increased7% y/y to a record$30M . We believe the combination is important to the forward setup, as AI governance is creating incremental demand across existing client relationships while recurring revenue adds greater visibility to III's traditionally project-oriented model.Growth broadened across the Americas and Europe, while management described the pipeline as potentially the strongest it has ever been and guided to continued y/y growth and margin expansion in 3Q26. Although enterprise decision timing remains a near-term constraint, the strength of the pipeline and improving regional trends support a constructive 2H26 outlook.
Click image above to view full announcement.
About Stonegate
Stonegate Capital Partners is a leading capital markets advisory firm providing investor relations, equity research, and institutional investor outreach services for public companies. Our affiliate, Stonegate Capital Markets (member FINRA) provides a full spectrum of investment banking, equity research and capital raising for public and private companies.
Contacts:
Stonegate Capital Partners
(214) 987-4121
info@stonegateinc.com
Source: Stonegate, Inc.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/308889