ISG posts flat rev­enues, eyes dig­i­tal growth

Greenwich Time - - BUSINESS - By Paul Schott; 203-964-2236; twit­ter: @paulschott

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.

Michael Cummo / Hearst Con­necti­cut Me­dia file photo

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.

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