Analyst Summary:
Information Services Group (ISG), a global technology research and advisory firm, reported record financial results for the full year ended December 31, 2022. The company achieved double-digit operating growth in the Americas and Europe, driven by significant demand from clients seeking efficiency and optimization solutions. ISG's suite of client solutions in digital transformation, cost optimization, research, workplace and governance services, supported by their successful ISG NEXT operating model, proved to be a winning combination. Michael P. Connors, the Chairman and CEO, stated that many clients are seeking ISG's assistance with optimizing their IT and operating environments, especially those in geographies and industries facing the most challenging market conditions.
The company's revenue increased to $286.3 million, up 3 percent from the prior year, and up 8 percent in constant currency, while profitability achieved record highs in the fourth quarter. Net income margin increased from 5.6 percent to 6.9 percent in the full year, and adjusted EBITDA margin (a non-GAAP measure calculated by dividing adjusted EBITDA by reported revenues) reached a record 15 percent.
ISG also amended its existing credit agreement, resulting in more favorable terms and a lower gross-debt-to-adjusted-EBITDA ratio of 1.8 times, a record low for year end. The company will pay a dividend of $0.04 per share on a fully diluted basis on March 31, 2023, to shareholders of record as of March 20, 2023.
Management expressed optimism for the future, but acknowledged the potential effects of uncertainties such as FX, inflation, and other factors. ISG no obligation to update or revise any forward-looking statements to reflect subsequent events or circumstances. Non-GAAP information was also provided for both GAAP and non-GAAP financial results for the fourth quarter and full year ended December 31, 2022, and December 31, 2021.