Information Services Group Inc.: Form 10-K for the period ended Dec 31, 2025

Unless the context otherwise requires, Information Services Group, Inc., the registrant, is referred to in this Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the “Form 10-K”) as the “Company,” “ISG”, “we,” “us” and “our.”

Our Company

Information Services Group, Inc. (Nasdaq: III) is a global AI-centered technology research and advisory firm. A trusted partner to more than 900 clients, including 75 of the world’s top 100 enterprises, ISG is a long-time leader in technology and business services that is now at the forefront of leveraging AI to help organizations achieve operational excellence and faster growth. The firm, founded in 2006, is known for its proprietary market data and research, in-depth knowledge and governance of provider ecosystems, and the expertise of its approximately 1,500 professionals worldwide working together to help clients maximize the value of their technology investments. For more information, visit www.isg-one.com (http://www.isg-one.com). The content on our website is available for informational purposes only. It should not be relied upon for investment purposes, nor is it incorporated by reference into this Annual Report on Form 10 K or any other filings.

Our Company was founded with the strategic vision to become a leading, high-growth provider of information-based advisory services. We continue to believe that our vision will be realized through the acquisition, integration and successful operation of market-leading brands within the data, analytics and advisory industry.

Our private and public sector clients continue to face significant technological, business and economic challenges that we believe will fuel demand for the professional services we provide. We are focused on providing unique solutions that solve key client problems. In the private sector, for example, we believe that companies will continue to face significant challenges associated with globalization and technological innovation, including the need to decrease operating costs, increase efficiencies, compete against new market entrants and evaluate and adopt increasing numbers of emerging and transformational technologies, such as artificial intelligence. Similarly, public sector organizations at the national, regional and local levels increasingly must deal with the complex and converging issues of outdated technology systems, reduced budgets and an aging workforce.

Overall, we believe the global marketplace dynamics at work in both the private and public sectors support growing demand for the professional services, analytics, platforms and advice ISG can provide. In this dynamic environment, the strength of our client relationships greatly depends on the quality of our advice and insight, our unique and valuable datasets, the independence of our thought leadership and the effectiveness of our people in assisting our clients to implement strategies that successfully address their most pressing operational challenges.

We are organized as a corporation under the laws of the State of Delaware. The current mailing address of the Company’s principal executive office is Information Services Group, Inc., 400 Atlantic Street, Stamford, CT 06901. Our telephone number is (203) 517-3100.

Our Services

ISG is a leading global provider of digital transformation and technology advisory services, helping organizations optimize performance, reduce costs, and accelerate innovation. Our expertise spans sourcing advisory, cloud and data analytics, managed governance and risk services, network and software advisory, technology strategy and operations design, change management, and market intelligence. We serve both private- and public-sector clients across the globe, supporting them through periods of expansion, consolidation, and transformation. By combining functional domain expertise with extensive empirical data and proprietary market intelligence, we enable clients to make informed strategic decisions and achieve measurable business outcomes.

The Company’s operating model is designed to extend our market leadership, enhance growth opportunities, and deliver long-term value to all stakeholders. We believe that our services address clients’ most critical priorities—advancing their digital transformation journeys and maximizing the return on their digital investments. To meet these needs, ISG operates through two global client solution areas: ISG Digital, which focuses on developing technology, transformation, sourcing, and digital solutions; and ISG Enterprise, which helps clients manage change and optimize core operations across information technology, finance, human resources, and training.

Our core solutions are supported by ISG Research, which provides extensive market analyses, provider evaluations, and data-driven insights; the ISG Network and Software Advisory portfolio; and our proprietary digital platforms—ISG GovernX®, ISG Inform™, and **ISG Tango—**that enable clients to improve supplier management, benchmark operational performance, and accelerate sourcing decisions. These offerings are increasingly enhanced with AI capabilities that deliver automation, analytics, and decision support across engagements. We continue to expand our industry-specific expertise in areas such as banking, insurance, and smart manufacturing.

Every client engagement leverages our Solution Hub, which integrates ISG’s global knowledge base, tools, and intellectual property to deliver tailored solutions. Engagements are executed through our ISG iFlex™ global delivery model, which enables the efficient deployment of resources worldwide, ensuring consistent quality, scalability, and responsiveness across time zones and geographies.

Our Competitive Advantages

We believe that ISG’s long-term strategy is supported by the following set of durable competitive advantages that reinforce our market position and ability to execute effectively:

• Independence and Objectivity ISG operates solely as a technology and business advisory firm, maintaining independence from vendors and service providers. This objectivity allows us to deliver unbiased, fact-based advice that aligns with client interests and supports long-term trusted-advisor relationships.
• Proprietary Data Assets and Market Intelligence With over 30 years of benchmarking and sourcing experience, ISG has built a proprietary data repository encompassing millions of real-world data points. These assets inform our advisory, research, and platform solutions, enabling clients to make informed, data-driven decisions and benchmark performance against industry peers.
• Deep Domain and Industry Expertise Our consultants bring an average of more than 20 years of experience across technology, operations, and industry domains. This depth of expertise allows ISG to address complex digital transformation challenges and deliver customized, high-impact solutions.
• Recognized Brand and Integrated Solutions ISG is recognized globally as a leading advisory firm in digital transformation and technology research. Our integrated service portfolio—spanning sourcing, strategy, analytics, governance, and change management—strengthens our client relationships and enhances our brand equity.
• Global Reach and Scalable Delivery Model Through our presence across the Americas, Europe, and Asia-Pacific, ISG delivers consistent, high-quality service worldwide. Our iFlex™ delivery model and Solution Hub enable scalable execution, agile resourcing, and seamless collaboration across geographies and time zones.

We believe the above strengths are central to our ability to successfully advise and support our clients to address any business challenge.

Our Strategy

ISG’s current strategy is to extend our global market leadership in digital transformation advisory by deepening our data, platform, and AI-enabled capabilities while broadening our recurring revenue base.

Key priorities are as follows:

Continue to Build on our Proprietary Data Sets and Market Intelligence.

Our key strength lies in the information, data, analytics, methods, and other intellectual property that we own. This foundation ensures our operational assessments, strategy planning, deal structuring, negotiations, and other advisory services remain truly independent. With each project, we aim to expand and refine our intellectual property, offering an ever-growing and distinctive source of information, data, and analytics for our clients.

We use nearly 10 million real-world data points from benchmarking and sourcing contracts to enhance our advisory, benchmarking, and platform processes, giving us a unique advantage that's hard to duplicate. Our proprietary intellectual property is safeguarded by various legal and contractual measures. We are committed to protecting its value and enforcing our rights whenever necessary. Consequently, we have established rigorous policies and procedures for the ownership, usage, and protection of intellectual property across all parties, including our employees.

In today's AI-driven digital marketplace, ISG Research assists enterprises in addressing emerging challenges, preparing for future opportunities, and maintaining a competitive advantage. ISG Research specializes in facilitating connections between technology buyers and sellers, including major services, cloud, and software providers. Our advisory services provide ISG Research with a comprehensive view of the technology and sourcing landscape. Our research encompasses traditional analyst coverage as well as direct feedback from market practitioners working with some of the largest enterprise clients on their transformation initiatives.

ISG monitors over 180,000 unique technology service contracts and annually evaluates more than 4,000 service and software providers, offering valuable insights into pricing, capabilities, and provider stability. When large organizations seek to assess potential partners, they rely on ISG Research for thorough evaluations of capabilities, pricing structures, breadth of offerings, and historical performance. With rapid advancements in technology, particularly artificial intelligence, ISG Research is well-equipped to guide enterprises in avoiding trends driven by hype and focusing on meaningful outcomes. Additionally, ISG Research supports providers in navigating the marketplace through market intelligence, client retention programs, pursuit assessments, and client satisfaction benchmarking.

Continue to Invest in and Scale “Platform-Enabled” Solutions.

We continue to develop and enhance our portfolio of platforms, namely ISG GovernX, ISG Tango and ISG Inform, which are critical to our delivery model.

ISG GovernX®. We continue to expand our Supplier and Contract Management capabilities powered by our GovernX® platform, a recognized vendor compliance and risk management solution. This offering provides clients with a strategic and disciplined approach to supplier relationships and large contract management. Our suite of offerings includes supplier performance improvement, reducing spending, third-party risk mitigation and supplier-based management. Based on ISG’s 25 years of managing relationships on behalf of clients, we have a robust dataset that enables us to partner with clients to deliver improvements to their business processes and to benchmark the performance of their operations against the broader market. GovernX leverages AI to support automation across the management of third-party supplier relationships, including contract and project lifecycles and risk management. Enterprises leverage the platform to deliver more value from their outsourcing spend. GovernX users can manage new contracts and proactive renewals, make timely amendments and handle contract terminations on one platform. The platform integrates with enterprise applications, such as ServiceNow, and is connected to ISG Research offerings, including contract benchmarks, assessments and total-cost-of-ownership evaluations. Additionally, GovernX clients can mitigate supply chain risks and support business continuity through integrated data feeds and real-time alerts.

ISG Tango. Our ISG Tango sourcing platform is an AI-embedded solution that enables enterprises and public sector organizations to quickly evaluate business requirements, identify desired outcomes, accelerate provider identification and selection, collaborate with providers on developing the right solution. Through our advisory and platform-enabled sourcing work, we influence billions of total contract value each year across services, software and cloud.

ISG Inform. We continue to invest in ISG Inform™ 2.0, an enhanced version of our data-as-a-service solution that provides benchmarking capability to track digital transformation and application development maturity and performance against industry peers. ISG Inform 2.0 provides a quantified view of the health of the user’s enterprise IT landscape through a series of easy-to-read visual dashboards that display key performance indicators for infrastructure, applications and digital capabilities compared with industry peers. Data and insights are drawn from the ISG total cost of ownership and sourcing databases.

Preserve and Expand Our Market Share Positions.

We expect the trend toward operational efficiency led by accelerating adoption of AI-based technologies to play an increasing role in the demand for our services. We plan to leverage our proprietary operating platform (Tango) to serve the growing number of private and public sector organizations utilizing outside advisors when undertaking cost optimization and transformation programs. We are focused on growing our existing client base by offering integrated solutions that combine our multiple services and capabilities. In addition, leveraging Tango and our iFlex global delivery capability, we will continue to expand our market reach to address the underserved, middle-market clients.

Expand “Recurring Revenue Streams.”

Our recurring revenue streams include such annuity-based ISG offerings as ISG GovernX, ISG Research Lens, ISG Inform and multi-year Public Sector contracts. All are characterized by subscriptions (i.e., renewal-centric as opposed to project-centric revenue streams) or multi-year contracts. As companies begin to recognize the importance of managing the post-sourcing transaction period, managed services have emerged as a revenue driver for the Company, with our offerings delivered through multi-year-managed services contracts. We believe that our experience with outsourcing transactions and software implementation initiatives makes us uniquely equipped to provide research insight and direct support to help our clients manage their transformational projects or act as a third-party administrator. We will continue to pursue opportunities to leverage our experience to make research and managed services an even greater revenue generator for us. The U.S. public sector, particularly state governments, local municipalities and higher education, presents a significant opportunity for ISG. Systems are typically outdated, maintenance is expensive and the workforce charged with maintenance is aging. There is a need to refurbish systems to reduce the cost of operations (particularly because governments’ tax revenues are under pressure). We believe we are well positioned as a third-party, objective advisor with no affiliation to the software providers. ISG will continue to invest in the evolution of these services, with an aim to drive increased AI adoption, greater profitability and even more value for our clients.

Scale Our Emerging Services.

We seek to evolve our capabilities and offerings to align to the constantly evolving technology landscape and the future needs of our clients. ISG invests in a portfolio of future offerings with the objective of evolving our service portfolio and relationships with clients further into AI-centered Advisory, Organizational Change Management (OCM), Training-as-a-Service (TaaS) and Software Advisory. These are all areas in which we are investing in an attempt to drive increased revenue and expand client relationships.

1. AI Advisory Services: ISG partners with clients throughout their AI adoption journey, providing comprehensive assessments of opportunities and readiness across data, talent, operating models, security, and responsible-AI frameworks. We develop multi-year strategic roadmaps encompassing governance, milestones, and value objectives. ISG’s AI Advisory offers unbiased procurement guidance and access to a targeted network of AI platforms and specialized implementation partners, as well as optimization of legacy services and external contracts for enhanced AI-driven efficiency. Implementation is overseen through rigorous program management that monitors key performance indicators (KPIs), risks, and controls; progress, realized value, and recommended next steps are communicated to management via regular dashboards and board-level updates.

2. Organizational Change Management (OCM): ISG offers OCM services designed to help clients align their organizations with the overall transformation journey, a role that becomes even more vital as AI-enabled change expands the scope of business process and workforce transformation. Our approach reduces uncertainty, resistance and costly turnover by focusing on stakeholder management, targeted communications, organizational alignment, and training enablement. We establish a clear organizational baseline—mapping structure, spans, layers, and roles—then design the target operating model to support technology programs, clarifying changes to structure, roles, decision rights, incentives and performance measures. Our comprehensive change plans cover stakeholder engagement, communications, leadership alignment, capability building, training and adoption support. We drive adoption with ISG’s change pillars: leadership alignment, stakeholder management, targeted communications, customized learning and training (including TaaS), culture and employee experience work, and disciplined project delivery—supported by a digital OCM platform and change analytics to monitor sentiment and risk. Adoption and behavior change are tracked against defined KPIs and milestones, with resistance addressed early, and we provide periodic dashboards and board-level communications on progress, outcomes and next steps.

3. Training-as-a-Service (TaaS): ISG provides TaaS and outsourced managed learning services designed for organizations that need custom learning content and digital learning platforms but have limited resources. These organizations often require ongoing training solutions to support a workforce that is constantly changing. ISG’s TaaS uses agile methods and rapid content development tools to quickly produce training materials, while digital adoption platforms (DAP) help integrate learning into daily work routines. Services on offer include training advice, analysis, strategic planning, custom content creation, delivery support, learning software subscriptions, administration, and assessment.

4. Software Advisory: ISG Software Advisory partners with clients to optimize their strategic software suppliers and ecosystem by leveraging market insights, research analytics, and deep expertise to validate architecture, requirements, bill of materials, utilization, and compliance. We advise across the full software lifecycle—including strategy and architecture validation, provider selection and contracting, deployment and adoption, renewals and governance. Our approach helps reduce costs, manage software assets, mitigate compliance risks, and resolve audit issues. We support major independent software vendor (ISV) negotiations and enterprise resource planning (ERP) modernization, optimize IaaS/PaaS commitments and cloud financials, and reduce audit exposure through robust software asset management. Additionally, our advisory connects clients to buyer guides presenting a point of view on top providers by subsegment, enabling faster, lower-risk decisions and sustained value realization from software investments.

5. ISG Network: ISG streamlines enterprise network solutions, addressing growing demands for technologies like SD-WAN, SD-LAN, SD security, 5G, UCaaS, and CCaaS that are essential for digital transformation. As clients seek secure, scalable, and efficient networks amid rising complexity and Internet of Things (IoT) expansion, ISG Network Select helps them quickly identify optimal solutions with up-to-date vendor data and insights for better pricing negotiations.

Preserve Our Financial Positions.

As the Company pursues new growth strategies, we remain committed to maintaining a strong financial foundation with both flexibility and liquidity. Our main priorities for available cash are investing in growth, paying dividends, buying back shares, and lowering debt. We expect our healthy cash flow and stable balance sheet to continue supporting the firm's long-term business strategy.

Deepen Industry Expertise.

We remain committed to enhancing our market-facing organization through continued investment, aiming to drive revenue growth while delivering comprehensive services to clients spanning approximately 20 industries. We have designated nine global sectors—Banking and Financial Services, Consumer Services, Energy and Utilities, Health Sciences, Insurance, Manufacturing, Media and Technology Software and Services, Public Sector, and Private Equity—as priorities for focused account leadership and in-depth solutions.

Consider Acquisitions and Other Growth Opportunities.

The business services, information, and advisory market is characterized by considerable fragmentation. Our established market leadership and strong brand recognition position us advantageously to grow through strategic acquisitions and other expansion opportunities. Integrating firms that offer complementary services and products would enable us to enhance and diversify our service portfolio as well as deepen our domain expertise. We will evaluate and may actively pursue joint ventures, mergers, and acquisitions with other organizations.

Our Proprietary Data Assets and Market Intelligence

One of our core assets is the information, data, analytics, methodologies and other intellectual property we possess. This intellectual property underpins the independent nature of our operational assessments, strategy development, deal structuring, negotiation and other consulting services we provide to our clients.

With each engagement we conduct, we enhance both the quantity and quality of the intellectual property we employ on behalf of our clients, thus providing a continuous, evolving and unique source of information, data and analytics.

This intellectual property is proprietary, and we rely on multiple legal and contractual provisions and devices to protect our intellectual property rights. We recognize the value of our intellectual property and vigorously defend it. As a result, we maintain strict policies and procedures regarding ownership, use and protection of our intellectual property with all parties, including our employees.

Clients

We operate in over 20 countries and across numerous industries. Our private sector clients operate primarily in the manufacturing, banking and financial services, insurance, health sciences, energy and utilities and consumer services industries. Our private sector clients are primarily large businesses ranked in the Forbes Global 2000 companies annually. Our public sector clients are primarily state and local governments (cities and counties) and authorities (airport and transit) in the United States and national and provincial government units in the United Kingdom, Italy and Australia.

Competition

Competition in the sourcing, data, information and advisory market is primarily driven by independence and objectivity, expertise, possession of relevant benchmarking data, breadth of service capabilities, reputation and price. We compete with other sourcing advisors, research firms, strategy consultants and sourcing service providers. A significant number of independent sourcing and advisory firms offer similar services to us. We believe we set ourselves apart with our data repository of recent, comparable transactions and benchmarking data, our depth of experience and our sourcing and technology implementation expertise, all of which are critical to implementing and managing successful transformation projects for business and governments.

Employees

As of December 31, 2025, we employed 1,290 people worldwide, of which 1,254 are full-time employees.

Our employee base includes executive management, service leads, partners, directors, advisors, analysts, technical specialists and functional support staff.

We recruit advisors from service providers and consulting firms with direct operational experience. These advisors leverage extensive practical expertise derived from experiences in corporate leadership, consulting, research, financial analysis, contract negotiations and operational service delivery.

All employees are required to execute confidentiality, conflict of interest and intellectual property agreements as a condition of employment. There are no collective bargaining agreements covering any of our employees.

Our voluntary advisor turnover rate has ranged between 11% and 13% over the last three years.

Human Capital Management

ISG strives to employ the brightest, most innovative people in the industry, so that we can provide world-class solutions to our clients. Employees at ISG are anchored in our core values, which include trust, integrity, respect, passion, entrepreneurship, balance and mentorship.

Our almost 1,300 employees, located in over 20 countries with more than one-fourth in the United States, perform a variety of different roles. We are participants in the competitive research and advisory industries. Attracting, developing and retaining talented people in advisory, research and other positions is critical to executing on our strategy. Our ability to compete effectively depends upon a number of factors, including learning opportunities, compensation/benefits, work environment, career opportunities and a culture of inclusivity. To make this happen, we have certain programs, training, policies and practices in place, including the following:

ISG WorkLife

We have also introduced ISG WorkLife, which is a series of progressive, best practice, Next-Gen HR offerings designed to improve the quality of our employees’ work-life experience, while helping us achieve our firm-wide objectives. ISG believes this will help us attract and retain productive talent. Some of the key offerings here include:

• ISG Cares, our enhanced volunteering program, which, among other things, provides employees paid time off to attend to charitable pursuits.
• ISG Academy, our global learning and development program.
• ISG Aspire, our global mentoring program.
• ISG iRefer, which allows the Company to attract talent through employee referrals, for which employees may earn referral bonuses.
• ISG iTime, which provides flexible paid time off arrangements for employees in certain countries.
• ISG Brand Ambassador, which highlights and encourages our people’s community support and charitable pursuits while elevating the firm’s global brand.

We understand that employees have varied interests both in and outside of the workplace. These programs, and others under ISG WorkLife, provide employees with the opportunity to pursue these activities. This allows us to attract and retain productive employees and enhance diverse perspectives.

Learning

ISG’s success depends on the knowledge and productivity of our employees. To that end, the Company invests a significant amount of time and money into providing development opportunities. Our ISG Academy is robust in offering learning in such topics specific to the employee’s industry and functional areas, leadership and people management, certifications and software and technical skills, among others. In 2025, substantially all learning and development activities were delivered virtually. Our digital certified professionals participated in more than 20,000 aggregate training hours across various programs, representing an average of approximately 15 hours of training per professional devoted to learning and development during the year.

Available Information

Our Internet address is www.isg-one.com (http://www.isg-one.com). The content on our website is available for informational purposes only. It should not be relied upon for investment purposes, nor is it incorporated by reference into this Annual Report on Form 10-K or any other filings. We make available through our Internet website under the link titled “Investors” our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, including any amendments or exhibits thereto, as soon as reasonably practicable after we electronically file any such materials with the Securities and Exchange Commission (the “SEC”). Copies of our key corporate governance documents, including our Code of Ethics and Business Conduct for Directors, Officers and Employees, Corporate Governance Guidelines and charters for our Audit Committee, our Nominating and Corporate Governance Committee and our Compensation Committee, are also on our website. Stockholders may request free copies of these documents, including our Annual Report to Stockholders, by writing to Information Services Group, Inc., 400 Atlantic Street, Stamford, CT 06901, Attention: Michael A. Sherrick, or by calling (203) 517-3100.

Our annual and quarterly reports and other information statements are also available to the public through the SEC’s website at www.sec.gov (http://www.sec.gov).

We operate in a highly competitive and rapidly changing environment that involves numerous risks and uncertainties, some of which are beyond our control. In addition, we and our clients are affected by global economic conditions and trends. The following sections address significant factors, events and uncertainties that make an investment in our securities risky. We urge you to consider carefully the factors described below and the risks that they present for our operations, as well as the risks addressed in other reports and materials that we file with the SEC and the other information included or incorporated by reference in this Annual Report on Form 10-K. When the factors, events and contingencies described below or elsewhere in this Annual Report on Form 10-K materialize, there could be a material adverse impact on our business, prospects, results of operations, financial condition and cash flows, any of which could have a potential negative effect on the trading price of our common stock. Additional risks not currently known to us or that we now deem immaterial may also harm us and negatively affect your investment. Additional or unforeseen effects from the global economic and geopolitical climate may give rise to or amplify many of these risks discussed below. Risks in this section are grouped in the following categories: (1) risks related to outstanding debt; (2) risks related to acquisitions and dispositions; (3) strategy and operation risks; (4) risks related to management and employees; (5) macroeconomic risks; (6) risks related to data, cybersecurity and confidential information; and (7) general risk factors. Many risks affect more than one category, and the risks are not in order of significance or probability of occurrence because they have been grouped by categories.

Risks Related to Outstanding Debt

We have a substantial amount of debt outstanding, which may limit our ability to fund general corporate requirements and obtain additional financing, limit our flexibility in responding to business opportunities and competitive developments and increase our vulnerability to adverse economic and industry conditions and changes in our debt rating.

On February 22, 2023, the Company amended and restated its senior secured credit facility to increase the revolving commitments per the revolving facility from $54.0 million to $140.0 million and eliminate its term loan (as further amended on June 27, 2024, the “2023 Credit Agreement”). As a result of the substantial variable costs associated with the debt obligations, we expect that:

• a decrease in revenues will result in a disproportionately greater percentage decrease in earnings;
• we may not have sufficient liquidity to fund all of these variable costs if our revenues decline or costs increase;
• we may have to use our working capital to fund these variable costs instead of funding general corporate requirements, including capital expenditures;
• we may not have sufficient liquidity to respond to business opportunities, competitive developments and adverse economic conditions; and
• our results of operations will be adversely affected if interest rates increase because, based on our current outstanding borrowings in the amount of $59.2 million as of December 31, 2025, a 1% increase in interest rates would result in a pre-tax impact on earnings of approximately $0.6 million per year.

These debt obligations may also impair our ability to obtain additional financing, if needed, and our flexibility in the conduct of our business. Our indebtedness under the 2023 Credit Agreement is secured by substantially all of our assets, leaving us with limited collateral for additional financing. Moreover, the terms of our indebtedness under the 2023 Credit Agreement restrict our ability to take certain actions, including the incurrence of additional indebtedness, mergers and acquisitions, investments and asset sales. Our ability to pay the fixed costs associated with our debt obligations will depend on our operating performance and cash flow, which in turn depend on general economic conditions and the advisory services market. A failure to pay interest or indebtedness when due could result in a variety of adverse consequences, including the acceleration of our indebtedness. In such a situation, it is unlikely that we would be able to fulfill our obligations, repay the accelerated indebtedness or otherwise cover our fixed costs. As of December 31, 2025, the total principal outstanding under the 2023 Credit Agreement was $59.2 million.

Our failure to comply with the covenants in our credit agreement could materially and adversely affect our financial condition and liquidity.

The 2023 Credit Agreement contains financial covenants requiring that we maintain, among other things, certain leverage and interest coverage ratios. Poor financial performance could cause us to be in default of these covenants. While we were in compliance with these covenants as of December 31, 2025, there can be no assurance that we will remain in compliance in the future. If we fail to comply with the covenants in our credit agreement, we may have to seek an amendment or waiver from our lenders to avoid the termination of their commitments and/or the acceleration of the maturity of outstanding amounts under the credit facility. The cost of our obtaining an amendment or waiver could be significant, and further, there can be no assurance that we would be able to obtain an amendment or waiver. If our lenders were unwilling to enter into an amendment or provide a waiver, all amounts outstanding under our credit facility would become immediately due and payable.

Our variable rate indebtedness subjects us to interest rate risk, which could cause our annual debt service obligations to increase significantly.

Borrowing under 2023 Credit Agreement bears interest at a rate per annum equal to either (i) the “Base Rate” (which is the highest of (a) the rate publicly announced from time to time by the administrative agent as its “prime rate,” (b) the Federal Funds Rate plus 0.5% per annum and (c) Term SOFR, plus 1.0%), plus the applicable margin or (ii) Term SOFR (which is the Term SOFR screen rate for the relevant interest period plus a credit spread adjustment of 0.10%) as determined by the administrative agent, plus the applicable margin. The applicable margin is adjusted quarterly based upon the Company’s consolidated leverage ratio. If interest rates increase, our debt service obligations on our variable rate indebtedness would increase even though the amount borrowed remained the same, and our cash flows could be adversely affected. An increase in debt service obligations under our variable rate indebtedness could affect our ability to make payments required under the terms of our credit facility.

Risks Related to Acquisitions and Dispositions

We have risks associated with acquisitions or investments.

Since our inception, we have expanded through acquisitions, including our most recent acquisition of Martino & Partners s.r.l. (“Martino & Partners”), a strategic advisory firm serving public and private sector clients in Italy, on September 1, 2025. In the future, we plan to pursue additional acquisitions and investments as opportunities arise. We may not be able to successfully integrate businesses that we acquire in the future without substantial expense, delays or other operational or financial problems. In addition, we may not be able to identify, acquire or profitably manage additional businesses. If we pursue acquisition or investment opportunities, these potential risks could disrupt our ongoing business, result in the loss of key customers or personnel, increase expenses and otherwise have a material adverse effect on our business, results of operations and financial condition.

Difficulties in integrating businesses we have acquired, or may acquire in the future, may demand time and attention from our senior management.

Integrating businesses we have acquired, or may acquire in the future, may involve unanticipated delays, costs and/or other operational and financial difficulties. In integrating acquired businesses, we may not achieve expected economies of scale or profitability or realize sufficient revenue to justify our investment. If we encounter unexpected problems as we try to integrate an acquired firm into our business, our management may be required to expend time and attention to address the problems, which would divert their time and attention from other aspects of our business.

We have risks associated with dispositions.

We have conducted dispositions in the past, most recently disposing of our automation business in 2024, and may again in the future. Disposition involve risks and uncertainties, such as our ability to sell such businesses for a satisfactory price and terms and in a timely manner, or at all, potential disruptions to other parts of our organization and distraction of management, the reallocation of internal resources that would otherwise be devoted to completing strategic acquisitions, potential losses of key employees or customers, exposure to unanticipated liabilities, any ongoing obligations to support the business following any such disposition, and other adverse financial impacts. The realization of any of these risks could adversely affect our business.

Strategy and Operation Risks

Our operating results have in the past been, and may in the future be, adversely affected by worldwide economic conditions and credit tightening.

Our results of operations are affected by the level of business activity of our clients, which in turn is affected by the level of economic activity in the industries and markets that they serve. A decline in the level of business activity of our clients, such as the impact of a pandemic, inflation, slowing growth, rising interest rates and recession, could have a material adverse effect on our revenue and profit margin. Future economic conditions could cause some clients to reduce or defer their expenditures for consulting services. We have implemented and will continue to implement cost-savings initiatives to manage our expenses as a percentage of revenue. However, current and future cost-management initiatives may not be sufficient to maintain our margins if the economic environment should weaken for a prolonged period.

The rate of growth in the broadly defined business information services and advisory sector and/or the use of technology in business may fall significantly below the levels that we currently anticipate.

Our business is dependent upon continued growth in sourcing activity, the use of technology in business by our clients and prospective clients and the continued trend towards sourcing of complex information technology and business process tasks by large and small organizations. If sourcing diminishes as a management and operational tool, the growth in the use of technology slows down or the cost of sourcing alternatives rises, our business could suffer. Companies that have already invested substantial resources in developing in-house information technology and business process functions may be particularly reluctant or slow to move to a sourcing solution that may make some of their existing personnel and infrastructure obsolete.

We may not be successful in our artificial intelligence initiatives, which could adversely affect our business, reputation or financial results.

Artificial intelligence presents new risks and challenges that may affect our business. We have made, and expect to continue to make, investments to integrate AI and machine learning technology into our services. Given the nature of AI technology, we face significant competition from other companies and an evolving regulatory landscape. Our AI efforts may not be successful, and our competitors may incorporate AI into their products more successfully than us, which could impair our ability to compete effectively and adversely affect our financial results. The rapid evolution of AI combined with the uncertain and often inconsistent regulatory landscape may require significant additional resources and costs and could in some cases limit our ability to implement AI capabilities in our solutions or potentially result in the implementation failing to produce the desired outcome. Despite our implementation of programs designed to support responsible AI use and development, we may not successfully address all issues that may arise. For example, privacy concerns, user consent, supply chain security, transparency and the accuracy, completeness and suitability of data sets are all potential issues that could adversely affect our business, reputation or financial results.

The development, deployment, and use of artificial intelligence technologies, including generative AI, involve significant legal, regulatory, operational, ethical and commercial risks, any of which could materially and adversely affect our business, financial condition, results of operations and reputation.

We are increasing our use of AI across our service delivery, advisory offerings and internal operations. AI technologies are at an early stage of development and present uncertainties regarding reliability, accuracy, explainability, data governance and long-term economic viability. Although we are dedicating resources to AI-related investments, training and partnerships, we may be unable to develop, procure, implement, or maintain AI tools and capabilities in a manner that meets client requirements, complies with applicable laws or produces anticipated operational or financial benefits.

AI systems may generate outputs that are inaccurate, biased, incomplete, unpredictable or otherwise unintended. Such outcomes could result in operational failures, adverse client impacts, misinformed decision-making, or reputational harm. Any failure by us—or by third parties whose tools or data we use—to appropriately design, test, validate, monitor or govern AI systems could expose us to contractual claims, indemnification demands, regulatory enforcement, litigation, financial penalties or other liabilities.

The regulatory framework governing AI is rapidly evolving and varies significantly across jurisdictions in which we operate. New or amended laws, regulations, standards or guidance may impose additional obligations on the development, use, auditing or documentation of AI systems, restrict certain uses of AI, require enhanced disclosures, or create new liabilities. Compliance with such frameworks may require substantial investment in governance, controls, reporting processes and oversight mechanisms. Failure to comply—whether actual or perceived—may result in investigations, fines, operational restrictions, adverse publicity or loss of client trust.

Our competitive position may be adversely affected by rapid technological change and heightened competition related to AI. Competitors, including global consultancies, technology vendors, hyperscalers and emerging AI-native firms, may introduce capabilities that exceed or supplant our own. Clients may accelerate internal development of AI capabilities that reduce demand for our services. AI and automation may also diminish the need for certain services currently provided by our personnel, and we may not be able to adjust our delivery model, pricing, staffing, training or organizational structure in a timely or cost-effective manner.

In addition, our AI capabilities depend on access to third-party infrastructure, data sets, cloud environments, software, models and specialized hardware. Supply constraints, increased pricing, licensing limitations, service interruptions, security vulnerabilities and/or incidents, or changes in contractual terms could materially impair our ability to develop, deliver or support AI-related services. Uncertainties regarding ownership, licensing or permissible use of training data, model outputs or other intellectual property may expose us to disputes, forced modifications, operational delays or damages.

Any of the foregoing factors—individually or collectively—could materially and adversely affect our business, financial condition, results of operations and reputation.

Our engagements may be terminated, delayed or reduced in scope by clients at any time.

Our clients may decide at any time to abandon, postpone and/or reduce our involvement in an engagement. Our engagements can be terminated, or the scope of our responsibilities may be diminished, with limited advance notice. If an engagement is terminated, delayed or reduced unexpectedly, the professionals working on the engagement could be underutilized until we assign them to other projects. Accordingly, the termination or significant reduction in the scope of a single large engagement, or multiple smaller engagements, could harm our business results.

Our operating results may fluctuate significantly from period to period as a result of factors outside of our control.

Our revenues and operating results may vary significantly from accounting period to accounting period due to factors including:

• fluctuations in revenues earned on contracts;
• commencement, completion or termination of engagements during any particular period;
• additions and departures of key advisors;
• transitioning of advisors from completed projects to new engagements;
• seasonal trends;
• introduction of new services by us or our competitors;
• changes in fees, pricing policies or compensation arrangements by us or our competitors;
• strategic decisions by us, our clients or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments or changes in business strategy;
• global economic and political conditions and related risks, including acts of terrorism, war, pandemics, inflation, slowing growth, rising interest rates and recession; and
• conditions in the travel industry that could prevent our advisors from traveling to client sites.

We depend on project-based advisory engagements, and our failure to secure new engagements could lead to a decrease in our revenues.

Advisory engagements typically are project-based. Our ability to attract advisory engagements is subject to numerous factors, including the following:

• delivering consistent, high-quality advisory services to our clients;
• tailoring our advisory services to the changing needs of our clients;
• matching the skills and competencies of our advisory staff to the skills required for the fulfillment of existing or potential advisory engagements; and
• maintaining a global business operation.

Any material declines in our ability to secure new advisory arrangements could have an adverse impact on our revenues and financial condition.

Clients’ failure or inability to pay for our services, whether on a timely basis or at all, could materially, adversely affect our results of operations and financial condition.

As further described in Note 2 to the Consolidated Financial Statements, “Summary of Significant Account Policies – Accounts Receivable, Contract Assets and Allowance for Doubtful Accounts,” the Company has been engaged in litigation with certain clients who have either failed to make payments as per the contracted payment schedule or have disputed account receivable balances for services rendered. While we maintain an allowance for doubtful accounts for estimated losses resulting from the inability of clients to pay fees or for disputes that affect our ability to fully collect billed accounts receivable, our actual experience may vary from these estimates, and there is no guarantee that such allowance will ultimately be sufficient. We may be required to record additional allowances or write offs in future periods, which, in turn, could adversely impact our financial condition and results of operation.

Moreover, while the Company continues to aggressively pursue legal action and/or collection against clients who dispute charges or fail to make payments, there is no guarantee that the Company’s legal actions will be successful, that actual collections from clients will reflect the Company’s estimate of amounts owed, and/or that the Company will be able to recoup legal fees expended on such actions.

If we are unable to achieve or maintain adequate utilization for our consultants, our operating results could be adversely impacted.

Our profitability depends to a large extent on the utilization of our consultants. Utilization of our consultants is affected by a number of factors, including:

• additional hiring of consultants because there is generally a transition period for new consultants;
• the number and size of client engagements;
• the unpredictability of the completion and termination of engagements;
• our ability to transition our consultants efficiently from completed engagements to new engagements;
• unanticipated changes in the scope of client engagements or unexpected terminations of client engagements; and
• our ability to maintain an appropriate level of consultants by forecasting the demand for our services.

We could lose money on our fixed-fee or capped-fee contracts.

As part of our strategy, from time to time, we enter into fixed-fee contracts, in addition to contracts based on payment for time and materials with capped fees. Because of the complexity of many of our client engagements, accurately estimating the cost, scope and duration of a particular engagement can be difficult. If we fail to make accurate estimates, we could be forced to devote additional resources to these engagements for which we will not receive additional compensation. While losses on our fixed-fee contracts are rare, to the extent that an expenditure of additional resources is required on an engagement, this could reduce the profitability of, or result in a loss on, the engagement.

Our contracts with contingent-based revenue may cause unusual variations in our operating results.

As part of our strategy, from time to time, we earn incremental revenues, in addition to hourly or fixed-fee billings, which are contingent on the attainment of certain contractual milestones or objectives. Because it is uncertain when the milestones or objectives will be achieved, if ever, any such incremental revenues may cause unusual variations in quarterly revenues and operating results. Also, whether any contractual milestones or objectives are achieved may become subject to dispute.

We may not be able to maintain our existing services and products.

We operate in a rapidly evolving market, and our success depends upon our ability to deliver high-quality advice and analysis to our clients. Any failure to continue to provide credible and reliable information and advice that is useful to our clients could have a significant adverse effect on future business and operating results. Further, if our advice proves to be materially incorrect and the quality of service is diminished, our reputation may suffer and demand for our services and products may decline. In addition, we must continue to improve our methods for delivering our products and services in a cost-effective manner.

Expanding our service offerings may not be profitable.

We may choose from time to time to develop new service offerings because of market opportunities or client demands. Developing new service offerings involves inherent risks, including:

• a lack of market understanding;
• competition from more established market participants;
• any inability to estimate demand for the new service offerings; and
• unanticipated expenses to hire qualified consultants and to market our new service offerings.

If we cannot manage the risks associated with new service offerings effectively, we are unlikely to be successful in these efforts, which could harm our ability to sustain profitability.

We may not have the ability to develop and offer the new services and products that we need to remain competitive.

Our future success will depend in part on our ability to offer new services and products. To maintain our competitive position, we must continue to enhance and improve our services and products, develop or acquire new services and products in a timely manner and appropriately position and price new services and products relative to the marketplace and our costs of producing them. These new services and products must successfully gain market acceptance by addressing specific industry and business sectors and by anticipating and identifying changes in client requirements. The process of researching, developing, launching and gaining client acceptance of a new service or product, or assimilating and marketing an acquired service or product, is risky and costly. We may not be able to introduce new, or assimilate acquired, services and products successfully. Any failure to achieve successful client acceptance of new services and products could have an adverse effect on our business results.

We may fail to anticipate and respond to market trends.

Our success depends in part upon our ability to anticipate rapidly changing technologies and market trends and to adapt our advice, services and products to meet the changing sourcing advisory needs of our clients. Our clients regularly undergo frequent and often dramatic changes. That environment of rapid and continuous change presents significant challenges to our ability to provide our clients with current and timely analysis, strategies and advice on issues of importance to them. Meeting these challenges requires the commitment of substantial resources. Any failure to continue to respond to developments, technologies and trends in a manner that meets market needs could have an adverse effect on our business results.

We may be unable to protect important intellectual property rights.

We rely on copyright and trademark laws, as well as nondisclosure and confidentiality arrangements, to protect our proprietary rights in our methods of performing our services, our data and our tools for analyzing financial and other information. There can be no assurance that the steps we have taken, or may take in the future, to protect our intellectual property rights will be adequate to deter misappropriation of our rights or that we will be able to detect unauthorized use and take timely and effective steps to enforce our rights. If substantial and material unauthorized uses of our proprietary methodologies, data and analytical tools were to occur, we may be required to engage in costly and time-consuming litigation to enforce our rights. There can be no assurance that we would prevail in such litigation. If others were able to use our intellectual property or were to independently develop our methodologies or analytical tools, our ability to compete effectively and to charge appropriate fees for our services may be adversely affected.

We face competition and our failure to compete successfully could materially adversely affect our results of operations and financial condition.

The business information services and advisory sector is highly competitive, fragmented and subject to rapid change. We face competition from many other providers ranging from large organizations to small firms and independent contractors that provide specialized services. Our competitors include any firm that provides sourcing or benchmarking advisory services, IT strategy or business process consulting, which may include a variety of consulting firms, service providers, niche advisors and, potentially, advisors currently or formerly employed by us. Some of our competitors have significantly more financial and marketing resources, larger professional staffs, closer client relationships, broader geographic presences or more widespread recognition than us.

In addition, limited barriers to entry exist in the markets in which we do business. As a result, additional new competitors may emerge, and existing competitors may start to provide additional or complementary services. There can be no assurance that we will be able to successfully compete against current and future competitors and our failure to do so could result in loss of market share, diminished value in our products and services, reduced pricing and increased marketing expenditures. Furthermore, we may not be successful if we cannot compete effectively on quality of advice and analysis, timely delivery of information, client service or the ability to offer services and products to meet changing market needs for information, analysis or price.

We derive a significant portion of our revenues from our largest clients and could be materially and adversely affected if we lose one or more of our large clients.

Our 25 largest clients accounted for approximately 30% of revenue in both 2025 and 2024. If one or more of our large clients terminate, significantly reduce their engagement or fail to remain a viable business, then our revenues could be materially and adversely affected. In addition, sizable receivable balances could be jeopardized if large clients fail to remain a going concern.

Risks Related to Management and Employees

The loss of key executives could adversely affect our business.

The success of our business is dependent upon the continued service of a relatively small group of key executives, including Michael P. Connors, Chairman and Chief Executive Officer; Todd D. Lavieri, Vice Chairman and President – ISG Americas and Asia

Pacific; Michael A. Sherrick, Executive Vice President and Chief Financial Officer; and Thomas S. Kucinski, Executive Vice President and Chief Human Resources Officer, among others.

Although we currently intend to retain our existing management, we cannot assure that such individuals will remain with us for the immediate or foreseeable future. The unexpected loss of the services of one or more of these executives could adversely affect our business.

We rely heavily on key members of our management team.

We are dependent on our management team. We grant restricted stock units (“RSUs”) from time to time to key employees and, in connection with such grants, require recipients to execute a restrictive covenant agreement. Vested and unvested RSUs will be forfeited upon any violation of the restrictive covenant agreement. We may not be able to retain these managers and may not be able to enforce the restrictive covenants. If we were to lose a number of key members of our management team and were unable to replace such individuals quickly, we could have difficulty maintaining our growth and certain key relationships with large clients and face competition from these former managers if the restrictive covenants are unenforceable.

We depend upon our ability to attract, retain and train skilled advisors and other professionals.

Our business involves the delivery of advisory and consulting services. Therefore, our continued success depends in large part upon our ability to attract, develop, motivate, retain and train skilled advisors and other professionals who have advanced information technology and business processing domain expertise, financial analysis skills, project management experience and other similar abilities. These advisors could resign and join one of our competitors or provide sourcing advisory services to our clients through their own ventures.

We must also recruit staff globally to support our services and products. We face competition for the limited pool of these qualified professionals from, among others, technology companies, market research firms, consulting firms, financial services companies and electronic and print media companies, some of which have a greater ability to attract and compensate these professionals. Moreover, increasing wage inflation may affect our profit margin as we strive to provide compensation packages that are competitive. We face risks related to global labor shortages, and competitive markets have increased attrition throughout our sector. Some of the personnel that we attempt to hire may be subject to non-compete agreements that could impede our short-term recruitment efforts. Any failure to retain key personnel or hire and train additional qualified personnel as required to support the evolving needs of clients or growth in our business could adversely affect the quality of our products and services, and our future business and operating results.

We may have agreements with certain clients that limit the ability of particular advisors to work on some engagements for a period of time.

We provide services primarily in connection with significant or complex sourcing transactions and other matters that provide potential competitive advantages and/or involve sensitive client information. Our engagement by a client occasionally precludes us from staffing certain advisors on new engagements with other clients because the advisors have received confidential information from a client who is a competitor of the new client. Furthermore, it is possible that our engagement by a client could preclude us from accepting engagements with such client’s competitors because of confidentiality concerns.

Macroeconomic Risks

Our international operations expose us to a variety of risks that could negatively impact our future revenue and growth.

Approximately 34% of our revenues for 2025 and 36% of our revenues for 2024 were derived from sales outside of the Americas. Our operating results are subject to the risks inherent in international business activities, including:

• tariffs and trade barriers;
• regulations related to customs and import/export matters;
• restrictions on entry visas required for our advisors to travel and provide services;
• tax issues, such as tax law changes and variations in tax laws as compared to the United States;
• cultural and language differences;
• an inadequate banking system;
• foreign exchange controls;
• restrictions on the repatriation of profits or payment of dividends;
• crime, strikes, riots, civil disturbances, pandemics, terrorist attacks and wars;
• nationalization or expropriation of property;
• law enforcement authorities and courts that are inexperienced in commercial matters; and
• deterioration of political relations with the United States.

Air travel, telecommunications and entry through international borders are all vital components of our business. If a pandemic, military conflict or terrorist attack were to occur, our business could be disproportionately impacted because of the disruption, including potential cancellation of ISG events.

Further, conducting business abroad subjects us to increased regulatory compliance and oversight. For example, in connection with our international operations, we are subject to laws prohibiting certain payments to governmental officials, such as the Foreign Corrupt Practices Act of 1977, as amended. A failure to comply with applicable regulations could result in regulatory enforcement actions as well as substantial civil and criminal penalties assessed against us and our employees.

We intend to continue to expand our global footprint in order to meet our clients’ needs. This may involve expanding into countries beyond those in which we currently operate, including into less-developed countries that may have less political, social or economic stability and less-developed infrastructure and legal systems. As we expand our business into new countries, regulatory, personnel, technological and other difficulties may increase our expenses or delay our ability to start up operations or become profitable in such countries. This may affect our relationships with our clients and could have an adverse effect on our business.

Changes to trade policy, including new or increased tariffs and changing import/export regulations, may adversely affect our business, financial condition and results of operations.

Changes in U.S. or international laws and policies governing foreign trade could materially and adversely affect our business. The U.S. has instituted certain changes, and has proposed additional changes, in trade policies that include the negotiation or termination of trade agreements, the imposition of higher tariffs on imports into the U.S. and other government regulations affecting trade between the U.S. and other countries where we conduct our business. The new tariffs and other changes in U.S. trade policy have triggered retaliatory actions by affected countries, and foreign governments have instituted, or are considering imposing, trade sanctions on U.S. goods.

The imposition of tariffs and other trade restrictions, as well as the escalation of trade disputes and any downturns in the global economy resulting therefrom, could materially and adversely affect our business, financial condition and results of operations. The extent and duration of the tariffs and other trade restrictions and the resulting impact on general economic conditions and on our business are uncertain and depend on various factors, such as negotiations between the U.S. and affected countries, the responses of other countries or regions, exemptions or exclusions that may be granted, the availability and cost of alternative sources of supply and demand for our services in affected markets.

We operate in a number of international areas which exposes us to significant foreign currency exchange rate risk.

We have significant international revenue, which is predominantly collected in local currency. It is expected that our international revenues will start to show growth as European and Asian Pacific markets adopt to sourcing solutions. The translation of our revenues into U.S. dollars, as well as our costs of operating internationally, may adversely affect our business, results of operations and financial condition.

Risks Related to Data, Cybersecurity and Confidential Information

Data protection and emerging cybersecurity laws and self-regulatory codes may restrict our activities and increase our costs.

Various statutes and rules regulate conduct in areas such as privacy, data protection, and cybersecurity that may affect our collection, use, storage, and transfer of information both abroad and in the United States. Compliance with these laws and self-regulatory codes may require us to make certain investments or may dictate that we not offer certain types of services or only offer such services after making necessary modifications. Moreover, these laws and regulations impose operational requirements, including disclosures to consumers about personal data practices, opt-out and consent choices and required contractual terms with certain third parties, and obligations to provide notice to individuals, third parties, and/or regulators in the event of certain cybersecurity incidents involving personal data. Failure to comply with these laws and self-regulatory codes may result in, among other things, civil and criminal liability, negative publicity, restrictions on further use of data, fines, and/or liability under contractual warranties.

In addition, there is an increasing public concern regarding data and consumer protection issues, with the result that the number of jurisdictions with data protection laws continues to increase and the scope of existing privacy laws and the data considered to be covered by such laws keeps expanding. Changes in these laws (including newly released interpretations of these laws by courts and regulatory bodies)

may limit our client data access, use and disclosure, and may require increased expenditures by us or may dictate that we may not offer certain types of services.

As a global company, ISG must comply with various international and domestic data privacy regulations such as (i) the EU and UK General Data Protection Regulation (“GDPR”), which has extra-territorial scope and substantial fines for breaches (up to 4% of global annual revenue or €20 million, whichever is greater), (ii) the California Consumer Privacy Act, which, unlike data privacy provisions enacted by other US states, covers individuals acting in a commercial or employment context not just as consumers, and (iii) the Australian Privacy Act, among others. In addition, India’s Ministry of Electronics and Information Technology notified the Digital Personal Data Protection Rules 2025 (the “Rules”) November 13, 2025, operationalizing the Digital Personal Data Protection Act 2023 (“DPDPA”) enacted by the Parliament of India in August 2023. Companies operating in India must meet the DPDPA’s core compliance obligations, which includes reporting data breaches within seventy-two hours, appointing consent managers and data protection officers, and implementing systems for express user permission, within a phased twelve-to-eighteen-month timeline. Like the GDPR, the DPDPA has extra-territorial reach. The DPDPA shares many provisions with existing privacy laws, and ISG therefore anticipates that its existing processes already broadly align with the law. However, like the GDPR, failure to comply with the DPDPA may lead to substantial fines. ISG is also continuing to monitor the development of and public guidelines regarding the EU’s ePrivacy Regulation to determine whether further action is required.

To mitigate the risk and negative exposure of data outside ISG, we have put in place a data protection framework that includes policies, procedures, guidance and records. This includes policies and procedures for rights and usage of personal and client data.

We are exposed to risks related to cybersecurity.

A significant portion of our business is conducted over the internet, and we rely on the secure processing, storage and transmission of confidential, sensitive, proprietary and other types of information relating to our business operations and confidential and sensitive information about our clients and employees in our computer systems and networks, and in those of our third-party vendors. Individuals, groups, state-sponsored organization, and actors utilizing AI may take steps that pose threats to our operations, our computer systems, our employees, and our clients. The cybersecurity risks we face range from cyberattacks common to most industries, such as the development and deployment of malicious software to gain access to our networks and attempt to steal confidential information, launch distributed denial of service attacks or attempts at other coordinated disruptions, to more advanced threats that target us because of our prominence in the global research and advisory field. Ransomware risk has increased significantly in recent years and presents a significant risk of financial extortion and loss of data. Our operating model allows employees to continue to work remotely or on a hybrid basis, which magnifies the importance of the integrity of our remote access security measures.

We have robust measures in place to address and mitigate cyber-related risks. Notwithstanding this, we continue to experience attack attempts against our environment. We have and continue to expect to invest in the security and resiliency of our networks and products and to enhance our internal controls and processes, which are designed to help protect our systems and infrastructure and the information they contain. These include timely detection of incidents through monitoring, training, incident response capabilities and mitigating cyber and security risks to our data, systems, products and services. However, given the complex, continuing and evolving nature of cyber and other security threats, these efforts may not be fully effective, particularly against previously unknown vulnerabilities that could go undetected for an extended period.

We also face risks related to our use of third-party suppliers, with whom we may share data and operational systems. If such suppliers are affected by a cybersecurity threat or incident, it could result in not only a reduction in or loss of their ability to service us (which could be a significant component of our services to clients) but also the exposure of ISG or client data or a potential backdoor into ISG’s systems and network.

We are exposed to risks related to artificial intelligence.

We recognize that our use of AI introduces risks related to data protection, cybersecurity, model integrity, confidentiality and operational reliability. In particular, our use of AI technologies may expose us to errors, data quality issues, security vulnerabilities, or other harms, especially as these technologies can behave unpredictably, fail, or produce inaccurate or biased outputs. Failures in oversight, system design, or data quality could result in various harms to us or our clients, including, but not limited to, operational disruptions, security or privacy incidents, and/or reputational challenges. Because AI systems can be complex and difficult to fully evaluate or audit, we may be unable to detect errors or vulnerabilities in a timely manner. If we are unable to effectively implement, monitor, and manage these technologies, our business, financial condition, and results of operations could be adversely affected.

In light of these risks, we have established governance processes intended to support the responsible evaluation, approval, deployment and monitoring of AI tools used in our internal operations and in client delivery. These processes include review mechanisms for higher-risk AI use cases, defined roles and responsibilities for management oversight, and coordination among our information security, legal, compliance and risk management functions.

Our Board of Directors, through its designee, the Information Security Committee (“ISC”), receives periodic updates from management regarding emerging AI-related risks, regulatory developments, and the potential impact of AI on our operations, technology environment and risk profile. Management is responsible for implementing controls, policies, training and monitoring procedures relevant to AI technologies, including restrictions on the use of unapproved or public AI tools that may create confidentiality, cybersecurity or compliance risks.

As AI technologies and associated global and domestic laws and regulations continue to evolve, we may be required to, among other things: enhance our governance frameworks, controls, documentation and reporting practices, increase our compliance costs; and/or limit our use of certain technologies. There can be no assurance that our processes will be sufficient to prevent or mitigate all AI-related risks, and failures or limitations in these processes could have a material adverse effect on our operations, reputation or regulatory posture. Moreover, any failure to comply with emerging AI regulatory frameworks could result in enforcement actions, fines, or other adverse consequences.

We may be subject to claims for substantial damages by our clients arising out of disruptions to their businesses or inadequate service, and our insurance coverage may be inadequate.

Most of our service contracts with clients contain service level and performance requirements, including requirements relating to the quality of our services. Failure to consistently meet the service requirements of a client or errors made by our employees while delivering services to our clients could disrupt the client’s business and result in a reduction in revenues or a claim for damages against us. Additionally, we could incur liability if a process we manage for a client was to result in internal control failures or impair our client’s ability to comply with their own internal control requirements.

Under our service agreements with our clients, our liability for breach of our obligations is generally limited to actual damages suffered by the client and is typically capped at the greater of an agreed amount or the fees paid or payable to us under the relevant agreement. These limitations and caps on liability may be unenforceable or otherwise may not protect us from liability for damages. In addition, certain liabilities, such as claims of third parties for which we may be required to indemnify our clients or liability for breaches of confidentiality, are generally not limited under those agreements. Although we have general commercial liability insurance coverage, the coverage may not continue to be available on acceptable terms or in sufficient amounts to cover one or more large claims. The successful assertion of one or more large claims against us that exceed available insurance coverage or changes in our insurance policies (including premium increases or the imposition of large deductible or co-insurance requirements) could have a material adverse effect on our business.

We could have liability, or our reputation could be damaged, if we fail to protect client and/or our data from security breaches or cyberattacks.

We are dependent on information technology networks and systems to securely process, transmit and store electronic information and to communicate among our locations around the world and with our people, clients, alliance partners and vendors. As the breadth and complexity of this infrastructure continues to grow, because of the use of mobile technologies, social media and cloud-based services, the risk of security breaches and cyberattacks increases. Such breaches could lead to shutdowns or disruptions of or damage to our systems and those of our clients, alliance partners and vendors and unauthorized disclosure of sensitive or confidential information, including confidential or personal data.

In addition, third party Cyber Security Risk is a critical focus for us. All potential new suppliers go through our Data Protection Impact Assessment (“DPIA”) process. This starts with an initial screening questionnaire. The questionnaire covers what personal data and client data is processed, whether the third party has any access requirements to our environment and how is data is transferred. From this, our security team assesses the third party, conducts further due diligence, and reviews contractual clauses. If the risk assessment identifies that the baseline Information security & privacy technical and organizational controls are not met, the business will be advised accordingly. The outcome of all DPIAs is recorded on the DPIA register. All new third parties processing personal data or client data are assessed to be either Tier 1, 2 or 3, with Tier 1 being the highest risk in terms of data processed or interactions to our environment from a cyber security threat perspective. Tier 1 and 2 third parties are recorded on our business-critical services register and reviewed annually, and we review the compliance documentation, such as latest ISO certifications, SOC2 reports and pen tests, of those Tier 1 and 2 third parties. Tier 3 third parties are recorded on the DPIA register, but no further due diligence is performed by the security team, as Tier 3 third parties process no client or personal data and have no access or integration to ISG’s network or systems. As part of our continuous improvement in our third-party risk management process, we engage the services of a third-party risk monitoring service to monitor threat intelligence and known vulnerabilities.

Although we seek to prevent, detect, and investigate cybersecurity threats and incidents, and have taken steps to mitigate the likelihood of network security breaches, there can be no assurance that attacks by unauthorized users will not be attempted in the future or that our security measures will be effective. Unauthorized disclosure of sensitive or confidential client data, whether through breach of our processes, systems or otherwise, could subject us to liability, damage our reputation and cause us to lose existing and potential clients. We may also be subject to civil actions and/or criminal prosecution by government or quasi-government agencies for breaches relating to such data. Our insurance coverage for breaches or mismanagement of such data may not continue to be available on reasonable terms or in sufficient amounts to cover one or more large claims against us.

Client restrictions on the use of client data could adversely affect our activities.

Most of the data we use to populate our databases comes from our client engagements. The insight sought by clients from us relates to the contractual data and terms, including pricing and costs, to which we have access while assisting our clients in the negotiation of our sourcing agreements. Data is obtained through the course of our engagements with clients who agree to contractual provisions permitting us to consolidate and utilize on an aggregate basis such information. If we were unable to utilize key data from previous client engagements, our business, financial condition and results of operations could be adversely affected.

General Risk Factors

Failure to maintain effective internal control over financial reporting could adversely affect our business and the market price of our common stock.

Pursuant to rules adopted by the SEC implementing Section 404 of the Sarbanes Oxley Act of 2002, we are required to assess the effectiveness of our internal control over financial reporting and provide a management report on our internal control over financial reporting in all annual reports. This report contains, among other matters, a statement as to whether or not our internal control over financial reporting is effective and the disclosure of any material weaknesses in our internal control over financial reporting identified by management.

The Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a framework for companies to assess and improve their internal control systems. Auditing Standard No. 5 provides the professional standards and related performance guidance for auditors to attest to, and report on, management’s assessment of the effectiveness of internal control over financial reporting under Section 404. Management’s assessment of internal control over financial reporting requires management to make subjective judgments and some of the judgments will be in areas that may be open to interpretation. Therefore, our management’s report on our internal control over financial reporting may be difficult to prepare, and our auditors may not agree with our management’s assessment.

While we currently believe our internal control over financial reporting is effective, we are required to comply with Section 404 on an annual basis. If, in the future, we identify one or more material weaknesses in our internal control over financial reporting during this continuous evaluation process, our management will be unable to assert such internal control is effective. Therefore, if we are unable to assert that our internal control over financial reporting is effective in the future, or if our auditors are unable to express an opinion on the effectiveness of our internal control, our investors could lose confidence in the accuracy and completeness of our financial reports, which could have an adverse effect on our business and the market price of our common stock.

Our actual operating results may differ significantly from our guidance.

From time to time, we release guidance regarding our future performance that represents our management’s estimates as of the date of release. This guidance, which consists of forward-looking statements, is prepared by our management and is qualified by, and subject to, the assumptions and the other information contained or referred to in the release. Our guidance is not prepared with a view toward compliance with published guidelines of the Public Company Accounting Oversight Board (United States) and neither our independent registered public accounting firm nor any other independent expert or outside party compiles or examines the guidance and, accordingly, no such person or firm expresses any opinion or any other form of assurance with respect thereto. Guidance is based upon a number of assumptions and estimates that, while presented with numerical specificity, is inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control and are based upon specific assumptions with respect to future business decisions, some of which will change. The principal reason that we release this data is to provide a basis for our management to discuss our business outlook with analysts and investors. We do not accept any responsibility for any projections or reports published by any such persons. Guidance is necessarily speculative in nature, and it can be expected that some or all of the assumptions of the guidance furnished by us will not materialize or will vary significantly from actual results. Accordingly, our guidance is only an estimate of what management believes is realizable as of the date of release. Actual results will vary from the guidance and the variations may be material. Investors should also recognize that the reliability of any forecasted financial data diminishes the farther in the future that the data is forecast. In light of the foregoing, investors are urged to put any guidance in context and not to place undue reliance on it. Any failure to successfully implement our operating strategy or the occurrence of any of the events or circumstances set forth in this Annual Report on Form 10-K could result in the actual operating results being different than the guidance, and such differences may be adverse and material.

We may experience employment-related claims, commercial indemnification claims and other legal proceedings that could materially harm our business.

We currently are, and may again in the future be, subject to employment-related claims in certain of the jurisdictions in which we operate, including claims of wage and hour violations. We incur a risk of liability for claims relating to employment-related matters, contractual obligations, government inquiries and other claims. Some or all of these claims may give rise to litigation or settlements, which may cause us to incur costs or have other material adverse impacts on our financial statements. Additionally, new employment and labor laws and regulations may be proposed or adopted in the jurisdictions in which we operate that may increase the potential exposure of employers to employment-related claims and litigation.

Certain clients have negotiated broad indemnification provisions regarding the services we provide. In addition, we may have liability to our clients for the action or inaction of our consultants that may cause harm to our clients or third parties. In some cases, we must indemnify our clients for certain acts of our consultants or arising from our consultants’ presence on the client’s job site. We may also incur fines, penalties, and losses that are not covered by insurance or negative publicity with respect to these matters.

ISG maintains a cyber risk management program designed to identify, assess, manage, mitigate and respond to cybersecurity threats. This program is integrated within the Company’s enterprise risk management system and addresses both the corporate information technology environment and the Company’s client-facing products. We regularly assess the threat landscape, taking a holistic view of cybersecurity threats, as such term is defined in Item 106(a) of Regulation S-K.

The underlying controls of the cyber risk management program are based on recognized best practices and standards for cybersecurity and information technology. ISG performs annual assessments, by two independent third parties, against the International Organization Standardization (“ISO”) 27001 Information Security Management System requirements for which we maintain certification. ISG also maintains certification across other cyber security frameworks, including the Trusted Information Security Assessment Exchange and UK Cyber Essentials. Following an independent third party audit of the ISG GovernX and Executive Insights Systems against the Description of a service organization system in a SOC2 Type 2 Report (AICPA, Description Criteria), ISG was able to provide reasonable assurance that our service commitments and system requirements were achieved based on the trust services criteria relevant to security, confidentiality and availability.

The Company’s cybersecurity efforts are led by the Chief Information Security Officer (“CISO”), who reports to the Chief Information Officer (“CIO”) and has responsibilities that cover the management of cybersecurity risk and the protection and defense of our networks and systems. Our CISO has proven cyber operations and cyber risk management experience, having previously worked for UK law enforcement and leading organizations in the financial services, health and advertising sectors. Our CISO also holds relevant cyber management qualifications, such as being a Certified Information Systems Security Professional. The CISO manages a team of qualified cybersecurity professionals with broad experience and expertise across cybersecurity disciplines that provide ad-hoc reports to the CISO regarding cybersecurity threats and incidents. Cybersecurity risk is maintained and managed under our Information Security Management System framework with oversight through our internal Executive Board (“IEB”) and our Board of Directors, which has delegated responsibility for cybersecurity risk to our Information Security Committee (“ISC”).

Cybersecurity is an important area of focus for our Board of Directors. The Board of Directors reviews and discusses with our CIO the Company’s cybersecurity, privacy and data security programs, the status of projects to strengthen internal cybersecurity, results from third-party assessments, any significant cybersecurity incidents, and the emerging threat landscape. Our CIO discusses the same cybersecurity topics covered with the Board of Directors with the IEB. In addition, the IEB makes decisions on resourcing and project prioritization in support of our cybersecurity and compliance initiatives.

Responsibility for cybersecurity risk has been delegated to the ISC, which consists of senior executives (including three IEB members), namely our Chief Financial Officer (IEB member), Chief Human Resources Officer (IEB member), Chief Information Officer, Partner, Data Analytics & Technology Office (IEB member), Chief Information Security Officer, Legal Counsel, Director – Workplace Services and Senior Manager, Compliance & Data Privacy. The ISC oversees the management of processes for identifying and mitigating cybersecurity risks, material vulnerabilities and high-rated incidents to help align our risk exposure with our strategic objectives. The ISC meets quarterly and receives additional ad-hoc briefings from the CISO as and when required.

In the event of a major security incident, certain members of the ISC form part of our Incident Management Team (“IMT”). The IMT follows our detailed incident response playbook, which outlines the steps to be followed from incident detection to mitigation, recovery and notification, including notifying functional areas (e.g., legal), as well as senior leadership, the IEB and the Board of Directors, as appropriate.

For the evaluation of our security controls, ISG engages third-parties services to conduct penetration testing, independent audits or provide consulting on best practices to address new challenges. These evaluations include testing both the design and operational effectiveness of our security controls. We also share and receive threat intelligence which we utilize to bolster defenses against active threats. These tests and assessments are useful tools for maintaining a robust cybersecurity program to protect our investors, clients, employees, vendors, intellectual property and drive continuous improvement across our security domain.

ISG recognizes that if our third-party suppliers are affected by cyber security incidents, we could be indirectly impacted, including, through the potential loss of service (which could be a significant component of our services to clients), exposure of ISG or client data or a potential backdoor into ISG systems or network. We maintain processes and procedures to continuously assess third-party cybersecurity risk and include security and privacy addendums to our contracts where applicable. We seek to work directly with any suppliers to address potential deficiencies when identified.

To mitigate the risk and negative exposure of personal data being breached or inadvertently shared outside of ISG, we maintain a data protection framework that includes policies, procedures, guidance and records. This includes policies and procedures regarding the rights and usage of personal and client data. ISG employs a Data Privacy Manager who briefs the ISC on privacy matters as part of the quarterly ISC meetings. The Data Privacy Manager completes an internal audit annually and works with a specialist third party to complete an external Data Protection Compliance review.

We continue to invest in the cybersecurity and resiliency of our networks and to enhance our internal controls and processes, which are designed to help protect our systems and infrastructure, and the information they contain.

As of the date of this Annual Report on Form 10-K, we are not aware of any cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected, or are reasonably likely to materially affect, the Company, including our business strategy, results of operations or financial condition. Notwithstanding the extensive approach we take to cybersecurity, we may not be successful in preventing or mitigating cybersecurity threats or incidents, and such threats or incidents may have a material adverse effect on us. While ISG maintains cybersecurity insurance, the costs related to cybersecurity threats or service disruptions to both ISG and our clients may not be fully insured.

For more information regarding the risks we face from cybersecurity threats, see the risks identified under “Risks Related to Data, Cybersecurity and Confidential Information” found in “Part 1A, Risk Factors” of this Annual Report on Form 10-K.

We maintain our executive offices in Stamford, Connecticut. The lease for our executive offices covers approximately seventeen thousand five hundred square feet and expires in November 2036. The majority of our business activities are performed on client sites or remotely. We do not own offices or properties. We have leased offices in the United States, Canada, Denmark, Switzerland, the Netherlands, Finland, France, Germany, India, Italy and the United Kingdom.

We and our consolidated subsidiaries are not currently subject to any material legal proceedings, nor, to our knowledge, are any material legal proceedings threatened against us or our consolidated subsidiaries that, in each case, are required to be disclosed under Item 103 of Regulation S-K. From time to time, we and our consolidated subsidiaries may be a party to certain legal proceedings in the ordinary course of business, including as described in the notes to the financial statements. Refer to Note 14 under the heading “Legal Reserve.”

The purpose of this Management’s Discussion and Analysis (“MD&A”) is to facilitate an understanding of significant factors influencing the operating results, financial condition and cash flows of the Company. Additionally, the MD&A conveys our expectations of the potential impact of known trends, events or uncertainties that may impact future results. You should read this discussion in conjunction with our consolidated financial statements and related notes included in this Annual Report on Form 10-K. Historical results and percentage relationships are not necessarily indicative of operating results for future periods. References to “ISG”, “we,” “our” and “us” in this MD&A are to the Company and its consolidated subsidiaries.

This MD&A provides an analysis of our consolidated financial results and cash flows for 2025 and 2024 under the headings “Results of Operations,” “Non-GAAP Financial Presentation,” “Non-GAAP Financial Measures,” and “Liquidity and Capital Resources.” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the year ended December 31, 2024.

BUSINESS OVERVIEW

Information Services Group, Inc. (Nasdaq: III) is a global AI-centered technology research and advisory firm. A trusted partner to more than 900 clients, including 75 of the world’s top 100 enterprises, ISG is a long-time leader in technology and business services sourcing that is now at the forefront of leveraging AI to help organizations achieve operational excellence and faster growth. The firm, founded in 2006, is known for its proprietary market data and research, in-depth knowledge and governance of provider ecosystems, and the expertise of its 1,500 professionals worldwide working together to help clients maximize the value of their technology investments. For more information, visit www.isg-one.com (http://www.isg-one.com). The content on our website is available for informational purposes only. It should not be relied upon for investment purposes, nor is it incorporated by reference into this Annual Report on Form 10 K or any other filings.

Our strategy is to strengthen our existing market position and develop new services and products to support future growth plans. As a result, we are focused on growing our existing service model, expanding geographically, developing new industry sectors, productizing market data assets, expanding our managed services offerings and growing via acquisitions. Although we do not expect any adverse conditions that will impact our ability to execute against our strategy over the next twelve months, the more significant factors that could limit our ability to grow in these areas include global macro-economic conditions and the impact on the overall sourcing market, competition, our ability to retain advisors and reductions in discretionary spending with our top client accounts or other significant client events. Other areas that could impact the business would also include natural disasters, pandemics, wars, legislative and regulatory changes and capital market disruptions.

We principally derive revenues from fees for services generated on a project-by-project basis. Prior to the commencement of a project, we reach agreement with the client on rates for services based upon the scope of the project, staffing requirements and the level of client involvement. Revenues for services rendered are recognized on a time and materials basis or on a fixed-fee or capped-fee basis in accordance with accounting and disclosure requirements for revenue recognition.

Revenues for time and materials contracts are recognized based on the number of hours worked by our advisors at an agreed upon rate per hour and are recognized in the period in which services are performed. Revenues for time and materials contracts are billed monthly, semimonthly or in accordance with the specific contractual terms of each project.

We also derive our revenues from certain recurring revenue streams. These include such annuity-based ISG offerings as ISG GovernX, ISG Research Lens. ISG Inform and the multi-year Public Sector contracts. These offerings are characterized by subscriptions (i.e., renewal-centric as opposed to project-centric revenue streams) or, in some instances, multi-year contracts. Our digital services now span a volume of offerings and have become embedded as part of our traditional transaction services. Digital enablement provides capabilities, digital insights and better engagement with clients and partners.

Our results are impacted principally by our full-time consultants’ utilization rate, the number of business days in each quarter and the number of our revenue-generating professionals who are available to work. Our utilization rate can be negatively affected by increased hiring because there is generally a transition period for new professionals that result in a temporary drop in our utilization rate. Our utilization rate can also be affected by seasonal variations in the demand for our services from our clients. The number of business workdays is also affected by the number of vacation days taken by our consultants and holidays in each quarter. We typically have fewer business workdays available in the fourth quarter of the year, which can impact revenues during that period. Time-and-expense engagements do not provide us with a high degree of predictability as to performance in future periods. Unexpected changes in the demand for our services can result in significant variations in utilization and revenues and present a challenge to optimal hiring and staffing. The volume of work performed for any particular client can vary widely from period to period.

CURRENT ENVIRONMENT

Inflation rates and the adverse effect of interest rates continued to be volatile in the past year. Inflation has not had a material effect on our business operations, financial performance and results of operations, other than its impact on the general economy. Changes to interest rates has impacted our business operations, financial performance and results of operations, as our interest expense has decreased from $5.8 million in 2024 to $4.1 million in 2025. The Company continuously monitors these changes and evaluates any effect. If our costs, in particular personnel-related costs, were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases in future periods. Our inability or failure to realize these offsets could adversely affect our business operations, financial performance and results of operations.

EXECUTIVE SUMMARY

2025 was a year of accelerating growth for ISG. Fueled by continuing client interest in our AI-powered transformation services, an improved business mix and our disciplined operating approach.

Our 2025 results were achieved in the face of macroeconomic headwinds that resulted in longer decision cycles and cautious spending. Leading the way was our Americas business, which had its strongest revenue growth since 2021, up 11 percent, excluding 2024 results from our divested automation unit. We also saw solid improvement in our EMEA region in the second half, capped by 28 percent growth in the fourth quarter as the region began to recover from earlier macro challenges.

Enterprise AI consulting and research, not surprisingly, played a significant part in our growth, and now represents about 30 percent of our firmwide revenue, up from 10 percent last year. We have served more than 350 clients with AI advisory and research services this year, focusing on strategy, sourcing, data transformation and agentic AI. That’s up more than 200 percent from the prior year.

Our recurring revenue, meanwhile, continues to be a strength, with growth driven by our Research and Governance units. Recurring revenues, highly valued for their predictability, represented 46 percent of our firmwide total in 2025.

Our ISG Research business delivered double-digit growth, led by our ISG Provider Lens® provider evaluation research and ISG Events. Client interest in AI-related content continues to rise, evidenced by our five sold-out AI Impact Summit events held across the globe in 2025. In addition, our third annual State of Enterprise AI Adoption study quickly became our most downloaded report ever.

Software continues to be a significant spend category for enterprises, with global spending expected to double to more than $1.4 trillion by end of 2030, with AI as a catalyst. In 2025, our Software unit achieved double-digit growth, reflecting strong enterprise demand for insights and support in this area.

Our ISG Platforms, infused with the power of AI, also performed well, especially our ISG GovernX® supplier governance and risk management platform. Leveraging GovernX, our Governance unit served more than 80 clients in 2025, growing both revenue and capabilities. Soon to be launched is a new AI governance solution that will help clients manage AI risk.

ISG Tango™, our AI-powered, future-proof sourcing solution, has quickly become our most successful platform product to date. We are now managing more than $25 billion of total contract value through the platform, as we continue to transition our sourcing work to Tango. In addition to modernizing and ensuring our entire sourcing process is more efficient, ISG Tango also gives us the platform capabilities we need to expand into the underserved mid-market (enterprises with $10 billion of revenue or less). With the power of Tango and our dedicated approach, we have been very successful in penetrating this market, adding more than 50 new clients in 2025.

Our Enterprise Change and Training as a Service (TaaS) business had a strong year, landing some of our largest multi-year accounts in 2025. Importantly, the number of our broader advisory engagements that included OCM increased by 20 percent this year, as change management becomes more integral to our solutioning.

In addition to our organic growth initiatives, we expanded our business in Europe this year by acquiring Martino & Partners, a highly regarded strategic advisory firm that serves primarily public sector clients in Italy. This acquisition expands our addressable market in Italy, where we see an emerging growth opportunity.

In another move to expand our capabilities, we acquired the AI Maturity Index in January this year. This AI readiness benchmarking and intelligence platform allows organizations to identify gaps in their workforce readiness and use a data-driven approach to achieve rapid improvement. This offering is already generating strong interest and opening up new client discussions about our broad range of AI-related capabilities.

RESULTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 2025 COMPARED TO YEAR ENDED DECEMBER 31, 2024

Revenues

Revenues are generally derived from fixed-fee contracts as well as engagements priced on a time and materials basis, which are recorded based on actual time worked as the services are performed. In addition, we also earn revenues which are contingent on the attainment of certain contractual milestones. Revenues related to materials required during an engagement (mainly out-of-pocket expenses such as airfare, lodging and meals) generally do not include a profit mark up and can be charged and reimbursed separately or as part of the overall fee arrangement. Invoices are issued to clients monthly, semimonthly or in accordance with the specific contractual terms of each project.

We operate in one segment, fact-based sourcing advisory services. We operate principally in the Americas, Europe and Asia Pacific. Our foreign operations are subject to local government regulations and to the uncertainties of the economic and political conditions of those areas, and the revenue for our foreign operations is predominantly invoiced and collected in local currency.

Geographical revenue information for the segment is as follows:

(in thousands)

Total revenues for the year ended December 31, 2025 decreased by $2.9 million or approximately 1% in 2025, with revenues decreasing in Europe and Asia Pacific but increasing in the Americas. The increase revenue in the Americas was primarily due to an increase in the Consulting, Research, and GovernX service lines, partially offset by a decrease due to the prior year’s sale of the Automation service line and lower revenue in the Network & Software (“NaSa”) service line. The decrease in revenue in Europe was primarily attributable to the prior year’s sale of the Automation service line and lower revenues in the NaSa and GovernX service lines, partially offset by an increase in the Consulting service line. The revenue decrease in Asia Pacific was primarily attributable to a decrease in the Consulting, NaSa and GovernX service lines. The translation of foreign currency revenues into U.S. dollars positively impacted performance in Europe and Asia Pacific compared to the prior year by $2.3 million.

Operating Expenses

The following table presents a breakdown of our operating expenses by functional category:

(in thousands)

Total operating expenses decreased by $14.9 million, or approximately 6%, in 2025. The decrease in operating expenses was primarily due to lower automation license fees expense of $8.0 million, restructuring costs of $2.6 million, acquisition and disposition-related costs of $2.4 million, compensation expense of $2.7 million, expense reversal associated with an amount that was no longer due to a sub-contractor of $1.9 million, computer expense of $0.3 million, bad debt expense of $0.2 million, and stock-based compensation of $0.2 million. These costs were partially offset by the prior year’s contingent consideration adjustment of $1.5 million, higher legal reserves of $1.9 million, travel and entertainment expense of $1.2 million, and professional fees of $0.6 million.

Compensation costs consist of a mix of fixed and variable salaries, annual bonuses, benefits and retirement plan contributions. Statutory and 401(k) plans are offered to employees as appropriate. Direct costs also include employee taxes, health insurance, workers compensation and disability insurance.

A portion of compensation expenses for certain billable employees are allocated between direct costs and selling, general and administrative costs based on relative time spent between billable and non-billable activities.

Selling costs consist principally of compensation expense related to business development, proposal preparation, acquisition and disposition-related cost and delivery and negotiation of new client contracts. Selling costs also include travel expenses relating to the pursuit of sales opportunities, expenses for hosting periodic client conferences, public relations activities, participation in industry conferences, industry relations, website maintenance and business intelligence activities. Additionally, we maintain a dedicated global marketing function responsible for developing and managing sales campaigns, brand promotion, the ISG Index and assembling client proposals.

We maintain a comprehensive program for training and professional development with the related costs included in SG&A. Related expenses include product training, updates on new service offerings or methodologies and development of client project management skills. Also included in training and professional development are expenses associated with the development, enhancement and maintenance of our proprietary methodologies and tools and the systems that support them.

Selling, general and administrative expenses consist principally of executive management compensation, allocations of billable employee compensation related to general management activities, IT infrastructure and costs for finance, accounting, information technology and human resource functions. General and administrative costs also reflect continued investment associated with implementing and operating client and employee management systems. Because our billable personnel operate remotely or on client premises, all occupancy expenses are recorded as general and administrative.

Depreciation and amortization expenses amounted to $4.5 million in 2025 and $5.9 million in 2024, respectively. The decrease of $1.4 million was primarily due to the sale of the automation business on October 1, 2024. Our fixed assets consist of furniture, fixtures, equipment (mainly personal computers) and leasehold improvements. Depreciation expenses are generally computed by applying the straight-line method over the estimated useful lives of assets. We also capitalize some costs associated with the purchase and development of internal-use software, system conversions and website development costs. These costs are amortized over the estimated useful life of the software or system.

We amortize our intangible assets (e.g., client relationships and databases) over their estimated useful lives. Goodwill related to acquisitions is not amortized but is subject to annual impairment testing.

Other Income (Expense), Net

The following table presents a breakdown of other expense, net:

($ in thousands)

The total increase of $2.7 million was primarily attributable to the reduction of gain on the sale of business of $3.8 million that is related to the prior year sale of the Automation business, and lower interest income and partially offset by lower interest expense attributable to a lower debt balance and lower interest rates.

Income Tax Expense

Our effective tax rate varies from period to period based on the mix of earnings among the various state and foreign tax jurisdictions in which our business is conducted and the level of non‑deductible expenses incurred in any given period. Our effective tax rate for the year ended December 31, 2025 was 35.7% compared to 45.7% for the year ended December 31, 2024. The variance from the U.S. statutory rate of 21.0% for the year ended December 31, 2025, was primarily caused by state taxes, the impact of higher tax rates applicable on company earnings in foreign jurisdictions, non-deductible expenses for tax purposes in the United States, and a benefit from the sale of the automation business.

NON-GAAP FINANCIAL PRESENTATION

This MD&A presents supplemental measures of our performance that are derived from our consolidated financial information but are not presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). We refer to these financial measures, which are considered “non-GAAP financial measures” under SEC rules, as adjusted EBITDA, adjusted net income and adjusted earnings per diluted share, each as defined below. See “Non-GAAP Financial Measures” below for information about our use of these non-GAAP financial measures, including our reasons for including these measures and reconciliations of each non-GAAP financial measure to the most directly comparable GAAP financial measure.

NON-GAAP FINANCIAL MEASURES

We use non-GAAP financial measures to supplement the financial information presented on a GAAP basis. We provide adjusted EBITDA (defined as net income, plus interest, taxes, depreciation and amortization, foreign currency transaction gains/losses, non-cash stock compensation, interest accretion associated with contingent consideration, loss on assets disposal, change in contingent consideration, acquisition and disposition-related costs, gain on sale of business and severance, integration and other expense), adjusted net income (defined as net income, plus amortization of intangible assets, non-cash stock compensation, foreign currency transaction gains/losses, interest accretion associated with contingent consideration, acquisition and disposition-related costs, loss on assets disposal, change in contingent consideration, and severance, integration and other expense, gain sales of business on a tax-adjusted basis) and adjusted net income per diluted share, excluding the net of tax effect of the items set forth in the table below. These are non-GAAP measures that the Company believes provide useful information to both management and investors by excluding certain expenses and financial implications of foreign currency translations that management believes are not indicative of ISG’s core operations. These non-GAAP measures are used by the Company to evaluate the Company’s business strategies and management’s performance and exclude non-cash and certain other special charges that some investors may believe obscure the user’s overall understanding of the Company’s current financial performance and the Company’s prospects for the future. We believe that these non-GAAP financial measures provide useful information to investors because they improve the comparability of the financial results between periods and provide for greater transparency of key measures used to evaluate the Company’s performance.

(in thousands)

(in thousands)

(1) Consists of expenses from acquisition and disposition-related costs and non-cash fair value adjustments on pre-acquisition contract liabilities.

(2) Marginal tax rate of 32%, reflecting U.S. federal income tax rate of 21% plus 11% attributable to U.S. states and foreign jurisdictions.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity

Our primary sources of liquidity are cash flows from operations, existing cash and cash equivalents and borrowings under our revolving line of credit. Operating assets and liabilities consist primarily of accounts receivable and contract assets, prepaid expense and other assets, accounts payable, contract liabilities, accrued expenses and other liabilities. The volume of billings and timing of collections and payments affect these account balances.

The following table summarizes our cash flows for the years ended December 31, 2025 and 2024:

(in thousands)

As of December 31, 2025, our liquidity and capital resources included cash, cash equivalents and restricted cash of $28.8 million compared to $23.2 million as of December 31, 2024, a net increase of $5.6 million, which was primarily attributable to the following:

• our operating activities provided net cash of $29.0 million for the year ended December 31, 2025. Net cash provided from operations was primarily attributable to our net income after adjustments for non-cash charges of approximately $22.5 million and $6.5 million provided from working capital primarily attributable to $7.8 million change in accrued expenses and other liabilities, a change in accounts payable of $0.6 million, and $0.2 million change in prepaid expenses and other assets, partially offset by a change in account receivables of $1.8 million, and a $0.3 million change in contract liabilities ;
• treasury share repurchases of $9.3 million;
• repayment of outstanding debt of $15.0 million;
• payments related to tax withholding for stock-based compensation of $3.1 million;
• cash dividends paid to shareholders of $9.2 million;
• proceeds from revolving facility of $15.0 million;
• payment of contingent consideration of $0.6 million;
• proceeds from UST Global Inc. for final working capital settlement of $0.7 million, in connection with sale of the Automation business;
• payment for the acquisition of Martino & Partners of $1.6 million;
• proceeds from the sale of the Automation business of $2.0 million;
• capital expenditures for property, plant and equipment of $4.0 million; and
• proceeds from issuance of employee stock purchase plan shares of $0.6 million.

Capital Resources

The Company’s current outstanding debt may limit our ability to fund general corporate requirements and obtain additional financing, impact our flexibility in responding to business opportunities and competitive developments and increase our vulnerability to adverse economic and industry conditions.

On February 22, 2023, the Company amended and restated its senior secured credit facility to increase the revolving commitments per the revolving facility from $54.0 million to $140.0 million and eliminate its term loan (as further amended on June 27, 2024, the “2023 Credit Agreement”). The material terms under the 2023 Credit Agreement are as follows. Capitalized terms used but not defined herein have the meanings ascribed to them in the 2023 Credit Agreement:

• The revolving credit facility has a maturity date of February 22, 2028.
• The credit facility is secured by all of the equity interests owned by the Company, and its direct and indirect domestic subsidiaries and, subject to agreed exceptions, the Company’s direct and indirect “first-tier” foreign subsidiaries, and a perfected first priority security interest in all of the Company’s and its direct and indirect domestic subsidiaries’ tangible and intangible assets.
• The Company’s direct and indirect existing and future wholly owned domestic subsidiaries serve as guarantors to the Company’s obligations under the senior secured facility.
• At the Company’s option, the credit facility bears interest at a rate per annum equal to either (i) the “Base Rate” (which is the highest of (a) the rate publicly announced from time to time by the administrative agent as its “prime rate,” (b) the Federal Funds Rate plus 0.5% per annum and (c) Term SOFR, plus 1.0%), plus the applicable margin or (ii) Term SOFR (which is the Term SOFR screen rate for the relevant interest period plus a credit spread adjustment of 0.10%) as determined by the administrative agent, plus the applicable margin. The applicable margin is adjusted quarterly based upon the Company’s consolidated leverage ratio. Prior to the end of the first quarter-end following the closing of the credit facility, the applicable margin shall be a percentage per annum equal to 0.50% for the revolving loans maintained as Base Rate loans or 1.50% for the revolving loans maintained as Term SOFR loans.
• The senior secured credit facility contains a number of covenants that, among other things, place restrictions on matters customarily restricted in senior secured credit facilities, including restrictions on indebtedness (including guarantee obligations), liens, fundamental changes, sales or dispositions of property or assets, investments (including loans, advances, guarantees and acquisitions), transactions with affiliates, dividends and other payments in respect of capital stock, optional payments and modifications of other material debt instruments, negative pledges and agreements restricting subsidiary distributions and changes in line of business. In addition, the Company is required to comply with a consolidated leverage ratio and consolidated interest coverage ratio.
• The senior secured credit facility contains customary events of default, including cross-default to other material agreements, judgment default and change of control provisions.

The Company’s financial statements include outstanding borrowings of $59.2 million at both of December 31, 2025 and December 31, 2024, which are carried at amortized cost. The fair value of debt is classified within Level 3 of the fair value hierarchy. The fair value of the Company’s outstanding borrowings was approximately $59.5 million and $59.6 million as of December 31, 2025 and December 31, 2024, respectively. The fair values of debt have been estimated using a discounted cash flow analysis based on the Company’s incremental borrowing rate for similar borrowing arrangements. The incremental borrowing rate used to discount future cash flows was 5.3% and 6.4% for December 31, 2025 and December 31, 2024, respectively. The Company also considered recent transactions of peer group companies for similar instruments with comparable terms and maturities as well as an analysis of current market conditions and interest rates. In 2025, the Company borrowed $15.0 million and subsequently repaid $15.0 million of its revolving credit facility. The Company is currently in compliance with its financial covenants.

We anticipate that our current cash and the ongoing cash flows from our operations will be adequate to meet our working capital, capital expenditure and debt financing needs for at least the next twelve months. The anticipated cash needs of our business could change significantly if we pursue and complete additional business acquisitions, if our business plans change, if economic conditions change from those currently prevailing or from those now anticipated, or if other unexpected circumstances arise that may have a material effect on the cash flow or profitability of our business. If we require additional capital resources to grow our business, either internally or through acquisition, or maintain liquidity, we may seek to sell additional equity securities or to secure additional debt financing. The sale of additional equity securities or certain forms of debt financing could result in additional dilution to our stockholders. We may not be able to obtain financing arrangements in amounts or on terms acceptable to us in the future.

The Company has financial covenants underlying its debt which require a debt to adjusted EBITDA ratio of 1.85. The Company was in compliance with its financial covenants under the 2023 Credit Agreement as of December 31, 2025.

Employee Retirement Plans

For the fiscal years ended December 31, 2025 and 2024, we contributed $1.8 million and $0.7 million, respectively, to our 401(k) plan (the “Savings Plan”) on a fully discretionary basis. These amounts were invested by the participants in a variety of investment options under an arrangement with a third-party asset manager. All current and future financial risks associated with the gains and losses on investments are borne by Savings Plan participants.

Critical Accounting Policies and Estimates

The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires the appropriate application of certain accounting policies, many of which require management to make estimates and assumptions about future events and their impact on amounts reported in our consolidated financial statements and related notes. Since future events and their impact cannot be determined with certainty, the actual results may differ from estimates. Such differences may be material to out consolidated financial statements.

We believe the application of our accounting policies, and the estimates inherently required therein, are reasonable. These accounting policies and estimates are periodically reevaluated, and adjustments are made when facts and circumstances dictate a change. Historically, we have found the application of accounting policies to be appropriate, and actual results have not differed materially from those determined using necessary estimates.

Our accounting policies are more fully described in Note 2—Summary of Significant Accounting Policies in the Notes to Consolidated Financial Statements. We have identified revenue recognition as a critical accounting estimate:

Revenue Recognition

We recognize our revenues by applying the following five steps: (1) identifying the contract with the customer; (2) identifying the performance obligation(s) in the contract; (3) determining the transaction price; (4) allocating the transaction price to the performance obligation(s); and (5) recognizing revenue when (or as) the Company satisfies the performance obligation(s).

We principally derive revenues from fees for services generated on a project-by-project basis. Prior to the commencement of a project, we reach agreement with the client on rates for services based upon the scope of the project, staffing requirements and the level of client involvement. It is our policy to obtain written agreements from clients prior to performing services or when evidence of enforceable rights and obligations is obtained. In these agreements, the clients acknowledge that they will pay based upon the amount of time spent on the project or an agreed upon fee structure.

Revenues for time and materials contracts, which may include capped-fees or “not-to-exceed” clauses, are recognized based on the number of hours worked by our advisors at an agreed-upon rate per hour and are recognized in the period in which services are performed. Revenues for time and materials contracts are billed monthly, semimonthly or in accordance with the specific contractual terms of each project. For contracts with capped fees or not-to-exceed clauses, we monitor our performance and fees billed to ensure that revenue is not recognized in excess of the contractually capped fee.

Revenues related to fixed-fee contracts are recognized as value is delivered to the customer, consistent with the transfer of control to the customer over time. Revenue for these contracts is recognized proportionally over the term of the contract using an input method based on the proportion of labor hours incurred as compared to the total estimated labor hours for the fixed-fee contract performance obligations, which we consider the best available indicator of the pattern and timing in which contract performance obligations are fulfilled and control transfers to the customer. This percentage is multiplied by the contracted dollar amount of the project to determine the amount of revenue to recognize in an accounting period. The contracted amount used in this calculation typically excludes the amount the client pays for reimbursable expenses. There are situations where the number of hours to complete projects may exceed our original estimate as a result of an increase in project scope or unforeseen events. The results of any revisions in these estimates are reflected in the period in which they become known.

For managed service implementation contracts, revenue is recognized over time as a percentage of hours incurred to date as compared to the total expected hours of the implementation, consistent with the transfer of control to the customer. For ongoing managed services contract, revenue is recognized over time, consistent with the weekly or monthly fee specified within such arrangements.

We also derive revenues based on negotiating reductions in network and software costs of companies with the entities’ related service providers and providing other services such as audits of network and communication expenses and consultation for network architecture. These contracts can be fixed in fees or can be based on the level of savings achieved related to its communications costs. Additionally, these contracts can also have a fixed component and a contingent component based on the savings generated by the Company. For network and software contingency contracts with termination for convenience clauses, revenue is recognized over time due to the existence of provisions for payment for progress incurred to date plus a reasonable profit margin. The contract periods range from a few months to in excess of a year.

We also previously entered into arrangements for the sale of automation software licenses and related delivery of consulting or implementation services at the same time or within close proximity to one another. Such software-related performance obligations included the sale of on-premises software, hybrid and software-as-a-service licenses, as well as other software-related services. Revenue associated with the software performance obligation is primarily recognized at the point at which the software is installed, or access is granted. We sold our automation business line in Q4 2024.

Revenue associated with events is recognized at the point of time at which the event occurs and is primarily comprised of sponsorships. Conversely, revenue associated with research subscriptions is recognized over time, as the customer accesses our data or related platforms. In addition, we sell research products for which the revenue is recognized at a point in time upon delivery to the client.

The agreements entered into in connection with a project typically allow our clients to terminate early due to breach or for convenience with 30 days’ notice. In the event of termination, the client is contractually required to pay for all time, materials and expenses incurred by us through the effective date of the termination. In addition, from time to time, we enter into agreements with clients that limit our right to enter into business relationships with specific competitors of that client for a specific time period. These provisions typically prohibit us from performing a defined range of services that we might otherwise be willing to perform for potential clients. These provisions are generally limited to six to twelve months and usually apply only to specific employees or the specific project team.

When we recognize revenues in advance of billing, those revenues are recorded as contract assets. When we invoice in advance of earning revenues, those amounts are recorded as contract liabilities.

Recent Accounting Pronouncements

See Note 2 to our Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K.

We are exposed to financial market risks primarily related to changes in interest rates. A 100 basis point change in interest rates would result in an annual change in our results of operations of $0.6 million pre‑tax. We do not enter into investments for trading or speculative purposes.

Interest Rate Risk

As of December 31, 2025, the Company had $59.2 million in total debt principal outstanding. Note 13 — Financing Arrangements and Long-Term Debt in the Notes to Consolidated Financial Statements provides additional information regarding the Company’s outstanding debt obligations.

All of the Company’s total debt outstanding as of December 31, 2025 was based on a floating base rate (SOFR – Secured Overnight Financing Rate) of interest, which potentially exposes the Company to increases in interest rates. However, due to our debt to EBITDA ratio of 1.85 times and forecasted rates from external banks, we believe that our total exposure is limited and such exposure is considered in our forecasted cash uses.

Foreign Currency Risk

A significant portion of our revenues are typically derived from sales outside of the United States. Among the major foreign currencies in which we conduct business are the Euro, the British Pound and the Australian dollar. The reporting currency of our consolidated financial statements is the U.S. dollar. As the values of the foreign currencies in which we operate fluctuate over time relative to the U.S. dollar, the Company is exposed to both foreign currency translation and transaction risk.

Translation risk arises as our foreign currency assets and liabilities are translated into U.S. dollars because the functional currencies of our foreign operations are generally denominated in the local currency. Adjustments resulting from the translation of these assets and liabilities are deferred and recorded as a component of stockholders’ equity. In 2025, the impact of foreign currency translation on our Statement of Stockholders’ Equity was $1.9 million. The translation of our foreign currency revenues and expenses historically has not had a material impact on our consolidated earnings because movements in and among the major currencies in which we operate tend to impact our revenues and expenses fairly equally. However, our earnings could be impacted during periods of significant exchange rate volatility, or when some or all of the major currencies in which we operate move in the same direction against the U.S. dollar.

Transaction risk arises when we enter into a transaction that is denominated in a currency that may differ from the local functional currency. As these transactions are translated into the local functional currency, a gain or loss may result, which is recorded in current period earnings. In 2025, the impact on revenues from foreign currency transactions was not material to our consolidated financial statements.

Credit Risk

Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of short-term, highly liquid investments classified as cash equivalents and accounts receivable and contract assets. The majority of the Company’s cash and cash equivalents are with large investment-grade commercial banks. Accounts receivable and contract asset balances deemed to be collectible from customers have limited concentration of credit risk due to our diverse customer base and geographies. Actual collections from customers may differ from the Company’s estimates. See “Accounts Receivable, Contract Assets and Allowance for Doubtful Accounts” in Note 2 to the Notes to Consolidated Financial Statements.

Disclosure Controls and Procedures

Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2025, as required by Rule 13a-15(b) under the Exchange Act. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of December 31, 2025.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external reporting purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2025, as required by Rule 13a-15(c) under the Exchange Act. In making this assessment, we used the criteria set forth in the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on its evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2025.

The effectiveness of the Company’s internal control over financial reporting as of December 31, 2025 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in its attestation report which appears herein.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on the Effectiveness of Controls

Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in a cost-effective control system, no controls can provide absolute assurance that misstatements due to error or fraud will not occur, and no evaluation of any such controls can provide absolute assurance that control issues and instances of fraud, if any, within our Company have been detected.

These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of the effectiveness of our controls to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies and procedures.