ISG posts flat revenues, eyes digital growth
IT consulting and research firm Information Services Group posted flat returns in the third quarter, but demand is growing for its digital services, the company reported this week.
Revenues for the Stamfordbased company totaled $68 million, about the same as a year ago. Profits came to $4 million, compared with $1.4 million a year ago. The bottom line reflected a reversal of $3.6 million in tax accruals.
“Our go-digital strategy is working. We’re responding to client demand with continued investments in this area,” Chairman and CEO Michael Connors said on an earnings call Friday. “Moving workloads to the cloud and automating business processes are two of the most important business transformations for our clients.”
Digital solutions accounted for more than 40 percent of revenues. Among recent milestones, the company launched a blockchain service intended to help improve the efficiency and security of business processes.
“We expect our blockchain business to evolve over time,” Connors said. “As with automation, ISG is entering the arena now to create use cases with clients, in preparation for when this technology becomes even more mainstream over the next few years.”
Digital services underpinned revenue growth of 20 percent in Europe, with particularly strong increases in Germany, France and the Nordic countries, according to the company.
Revenues fell in the Americas due to delays in network services and declines in business from municipal and state-government clients.
“I think the issue with the public sector is we’ve seen the uncertainty and slowness in decisions across the market for this year and including the quarter, especially during the election cycle,” Connors said. “Our hope is that in 2019 we will see a rebound in the public sector.”
ISG served 430 clients in the past quarter. Its partners included Exelon, Caterpillar, Humana, Entergy, Bell Canada and AIG.
In May, ISG opened an 18,000-square-foot headquarters at 2187 Atlantic St., in the Harbor Point neighborhood of the city’s South End.
Worldwide, ISG employs approximately 1,300, including about 500 at its Global Operations Center in Bangalore, India. It also maintains offices in Guildford, England; Paris; and Frankfurt.
ISG shares closed Friday at $4.10, about flat compared with their Thursday finish.
ISG CEO and Chairman Michael Connors speaks during a ribbon-cutting event at the company’s new offices at 2187 Atlantic St. in Stamford on May 9.