III

Good morning, welcome to the Information Services Group first quarter 2026 conference call. This call is being recorded, and a replay will be available on ISG's website within 24 hours. Now I'd like to turn the call over to Mr. Barry Holt for his opening remarks and introductions. Mr. Holt, please go ahead.

Thank you, operator. Hello, and good morning. My name is Barry Holt. I am head of corporate communications for ISG. I'd like to welcome everyone to ISG's first quarter conference call. I'm joined today by Michael Connors, Chairman and Chief Executive Officer, and Michael A. Sherrick, Executive Vice President and Chief Financial Officer. Before we begin, I would like to read a forward-looking statement. It is important to note that this communication may contain forward-looking statements which represent the current expectations and beliefs of the management of ISG concerning future events and their potential effects. These statements are not guarantees of future results and are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated.

For a more detailed listing of the risks and other factors that could affect future results, please refer to the forward-looking statement contained in our Form 8-K that was furnished last night to the SEC and the Risk Factors sections of our most recent Form 10-K and 10-Q filings. You should also read ISG's annual report on Form 10-K and any other relevant documents, including any amendments or supplements to these documents filed with the SEC. You will be able to obtain free copies of any of ISG's SEC filings on either ISG's website at www.isg-one.com or the SEC's website at www.sec.gov. ISG undertakes no obligation to update or revise any forward-looking statement to reflect subsequent events or circumstances.

During this call, we will discuss certain non-GAAP financial measures which ISG believes improves the comparability of the company's financial results between periods and provides for a greater transparency of key measures used to evaluate the company's performance. The non-GAAP measures which we will touch on today include adjusted EBITDA, adjusted net earnings, and the presentation of selected financial data on a constant currency basis. Non-GAAP measures are provided as additional information and should not be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. For the reconciliation of all non-GAAP measures presented to the closely applicable GAAP measure, please refer to our current report on Form 8-K, which was filed last night with the SEC. Now I would like to turn the call over to Michael Connors, who will be followed by Michael A. Sherrick. Mike?

Thank you, Barry Holt, and good morning, everyone. Today, we will review our strong Q1 results, our compelling AI transformation story, our view of the broader demand environment, and our outlook for Q2. ISG had a strong 1st quarter and an excellent start to the year, continuing our momentum. Our Q1 results, both revenue and EBITDA, were at the top end of our guidance. Revenue was $61.2 million, up 3%, led by 25% growth in Europe and 9% growth in recurring revenues, powered by our research, public sector, and governance businesses. In terms of profitability, Q1 marks the 6th quarter in a row that our adjusted EBITDA has grown by double digits.

Versus the prior year, it was up 12% to $8.3 million, and our adjusted EBITDA margin was up more than 100 basis points to 13.5%, fueled by a more profitable business mix and our strong operating discipline. A few comments on our AI transformation story. AI demand continues to accelerate for ISG. In Q1, we delivered $21 million of AI-related revenue, about a third of our firm-wide total. That was up from $12 million a year ago. AI-related revenue includes work where AI is a key part of the client solution, including AI research and insights, AI strategy, sourcing governance, operating model design, business case validation, software, tech provider evaluation, and transformation support. AI and the cost optimization initiatives that fund digital transformation remain leading areas of client investment, and that plays to our strengths.

Apart from AI-driven solutions, we are leveraging AI in our own client delivery model to improve speed, quality, and efficiency, thereby supporting margin expansion over time. Our recently launched ISG AI Index underscores how the AI market continues to develop. Initial spending is concentrated in infrastructure as hyperscalers ramp up capacity to meet demand. Software and platform providers are beginning to monetize their AI capabilities, while managed services is still in the early stages, indicating the larger opportunity remains in front of us. As AI demand rises, so does complexity. It's in these periods of disruption, especially, that clients turn to ISG for our independent, trusted advice. Each year, we influence more than $200 billion of tech spend. This activity informs our advisors and researchers, expands our benchmarking data, and delivers data-driven insights and recommendations our clients depend on for their AI-powered business transformations.

While AI adoption is still in the early stages, pilots are progressing into broader deployments. We expect this to translate into sustained demand and a growing pipeline of opportunities for ISG. One of the highlights of Q1 was the signing of our largest deal ever, a multi-year agreement valued up to $17 million to provide governance services to a top global manufacturer. Under this landmark contract, ISG will manage $300 million in global technology spend with 200 technology vendors to support a large-scale, multi-year AI-powered transformation. This work is beginning, and we expect to support this client for up to eight years on this AI-centered client initiative. One comment on our ISG Tango. We continue to deliver great value through our proprietary AI-powered next-generation sourcing platform.

More than $27 billion of contract value is flowing through Tango, which is now fully integrated into our workflows and has become integral to our sourcing business. Turning to our regions. The Americas delivered $40 million of revenue in Q1, down about 3% from last year against a tough compare and up 4% sequentially from the fourth quarter. Our current Americas pipeline is robust, and we expect solid year-over-year growth in Q2. During the first quarter, the region saw double-digit growth in research and governance and in our health sciences, insurance, and public sector industry verticals. Key client engagements included Estée Lauder, ExxonMobil, and the State of Arizona. During the quarter, we began work on a $5 million engagement with a leading U.S. healthcare company to deliver technology, cost savings, and AI-driven innovation with the goal of improving patient care.

We are providing a full range of services, including benchmarking, operating model design, sourcing, transition, change management, and governance services. This is one of the largest ever technology transactions in the U.S. healthcare sector, where there is increasing demand to modernize and digitize care, pointing to a great future opportunity for ISG. Within this sector, we continue to deliver a multi-million dollar series of engagements for a global healthcare and medical products company involving sourcing, governance, network, and software. We are also supporting the client's shift to agentic AI, which we expect will lead to follow-on work as the client accelerates its AI adoption. Our Europe region continued its momentum from the second half of last year with an excellent first quarter.

Revenues were up 25% to $17 million, driven by double-digit growth in our advisory, software, and governance businesses and in our consumer, insurance, and health sciences industry verticals. Key client engagements in Europe in the first quarter included Allianz, Diageo, and BARMER, a leading health insurer in Germany. During the quarter, we won a large engagement worth about $1 million with a welcome-back client, a leading medical technology company. We are supporting a broad range of infrastructure and software initiatives for the client aimed at optimizing cost and adopting AI with room for follow-on opportunities. We also won a $3 million engagement with a leading pharmaceutical company, a new client for the firm. We are delivering software advisory support and executing on an enterprise-wide technology sourcing and vendor consolidation strategy involving AIOps and proprietary AI platforms.

The goal is to free up savings for the client to reinvest in its research and development activities. As you can see from these examples, this was a big sales quarter for ISG in the health sciences sector, both in the U.S. and in Europe. In Asia Pacific, our Q1 revenues of $4.1 million were down $700,000 compared with the prior year. Based on our current pipeline, including public sector work, we expect Q2 revenues to be up 20% sequentially. In Q1, we saw double-digit growth in our consumer and enterprise industry verticals. Key clients in the quarter included IMO and Woolworths. During the quarter, we continued our work on a new, nearly $1 million engagement with a provider of data center services to power the region's ongoing adoption of AI.

ISG is helping the client build out its core AI capabilities to support its rapid growth plans. Now turning to the broader market and our guidance for Q2. Clients continue to focus on cost optimization and AI investments despite uncertain macro conditions, and this plays to our strengths. We see current demand trends continuing into Q2. With this in mind, for the second quarter, we are targeting revenues of between $62.5 million and $63.5 million and adjusted EBITDA between $8 million and $9 million, which will continue our year-over-year growth and margin expansion. Now, let me turn the call over to Michael A. Sherrick, who will summarize our financial results. Michael?

Thank you, Mike. Good morning, everyone. Revenue for the first quarter was $61.2 million, up 3% year-over-year. By region, Americas' revenue was $39.8 million, down 2.9%. Europe delivered revenue of $17.3 million, up 25.3%. Asia Pacific was $4.1 million, down 14.7%. Adjusted EBITDA for the quarter was $8.3 million, up 11.8%, with margin expanding 111 basis points to 13.5%. Operating income was $5 million, up 47.7% year-over-year, resulting in an operating margin of 8.2%. GAAP net income was $2.7 million or $0.05 per fully diluted share, compared with $1.5 million or $0.03 per fully diluted share last year.

Adjusted net income was $4.3 million or $0.09 per fully diluted share, up from $3.7 million or $0.07 per fully diluted share a year ago. Headcount at quarter end was 1,276, essentially flat with year-end. Our consulting utilization was 71.5%, in line with our typical first quarter levels. We ended the quarter with cash of $22.7 million, compared with $28.7 million at the end of the fourth quarter and up $2.6 million year-over-year. For the quarter, net cash used in operations was $700,000, which was in line with our expectations, given normal first quarter seasonality. We continue to expect strong operating cash flow for the remainder of the year.

During the quarter, we paid dividends of $2.2 million and repurchased $2.1 million of stock. Our next quarterly dividend will be paid June 26th to shareholders of record as of June 5th. At quarter end, fully diluted shares outstanding were 50.2 million, and our gross debt-to-EBITDA ratio was just under 1.8 times, down from 1.9 times at December 31, 2025. Our average borrowing rate for the quarter was 5.4%, down 115 basis points year-over-year. Overall, our balance sheet remains solid, providing us with a strong foundation to both operate and invest in the business, especially in our AI initiatives. Mike will now share concluding remarks before we go to Q&A. Mike?

Thank you, Michael. To summarize, ISG is off to a strong start in 2026 with AI acting as a tailwind. Our first quarter results were led 25% growth in Europe and 9% growth in recurring revenues. We delivered our sixth straight quarter of double-digit growth in adjusted EBITDA, up 12% in Q1, with our margins up by more than 100 basis points. We believe ISG is a compelling AI transformation story in the technology research and advisory services market. Not because we are talking about AI, but because AI is already having a positive impact on our revenue, our margins, governance wins, and client demand. Indeed, ISG is uniquely positioned to help clients realize their AI ambitions.

Our unmatched value chain of research, benchmarking, advisory, and governance services is a key competitive advantage for ISG, delivering ROI to our clients and long-term value for our shareholders. Thank you very much for calling in this morning. Now let me turn the session over to the operator for your questions.

Today's question and answer session will be conducted electronically. If you'd like to ask a question, you can do so by pressing star 1 on your telephone keypad. If you find that your question has been answered and you would like to remove yourself from the queue, you may do so by pressing the pound sign. Again, if you would like to ask a question, you can do so by pressing star 1 on your touch-tone keypad, and we will pause for a moment to allow questions into the queue. Our first question comes from the line of Joe Gomes from Noble Capital Markets. Please go ahead.

Good morning. Nice quarter.

Thank you. Good morning, Joe.

Mike, first one I wanted to ask on the new client, and I don't know what more color you can provide on that. Maybe, you know, the pipeline there for similar size type of deals. I know that you just mentioned this is the largest one, you know, is the pipeline growing to those type of deals more than, say, $1 million or $2 million deals?

Yeah. Thanks, Joe. First of all, yes, first of all, on the major manufacturing company, a very large deal all around AI governance, which is a hot topic with our client base. You know, they have allowed a diversification of the use of different tools on a global basis in a lot of these major enterprises. The question now is, with all the usage and the cost going up, how are we gonna govern this in an enterprise? We have a number of discussions going on and a number of things in our pipeline relative to our governance services, with AI governance being at the top of the list. We expect this to be a very hot area for us over the next couple of years, Joe.

Okay. Just on the guidance, maybe you could kind of, you know, walk me through. If I look year-over-year, you know, the second quarter last year was $61.6 million, and you were guiding at $62.5 million-$63.5 million. You already talked about, you know, Asia should be up 20%, which is, you know, close to $1 million there. I think you said North America or the Americas should also see some growth. Was there something still in the second quarter numbers last year that would kind of, you know, if we removed that, you know, would show a bigger growth rate for this year? Or are you just being conservative because of the environment out there?

Joe, it's Michael. Thanks for the question. I don't think that there's no item or individual thing we would point to your point, that drives it in terms of where we are. I think like anything, you know, there's an uncertain macro environment. We're still early in May. As always, we wanna be conservative in how we look at things and make sure that, you know, we're not getting ahead of ourselves.

Okay, great. Thanks, Ben. I'll get back in queue.

Thanks, Joe.

Your next question comes from the line of Dave Storms with Stonegate. Please go ahead.

Morning. Thank you for taking my questions. Maybe wanted to start with Europe. You mentioned you had a welcome back customer there. Just curious as to, you know, when you're looking at your pipeline, are you seeing an increase in welcome back customers, or is this kind of a one-off? I'm sure you guys are always working on that. Maybe any further color there would be great.

Yeah. Look, the reference we were referring to, just for definitional purposes, we call a welcome back client someone who has not done work with us in the last 24 months. Call it 2 years. We have a lot of continuous clients. As you know, about 80% of our clients or so are continuous year-over-year. No, I mean, what happens is in different segments, depending on what the environment is and what clients are wanting to move on and take action on, and if they feel like the macro environment is looking a little better, in this case, the examples that I was giving was around, I think, the health sciences areas. You know, it's really driven by AI, and it's really driven by the need to accelerate pace.

As you know, in Europe, they're a little behind the U.S., primarily because the environment over there is a little more constrained because of all the geopolitical and other things going on. They wanna make sure the air is clear. That's what we're seeing. We're seeing that they are now moving at a more rapid pace than they had been. They're right behind the U.S., but they are behind the U.S. overall, and AI is driving the need to move quicker.

Understood. I appreciate that. I did wanna circle back to the large client. It sounds like this contract is predicated on a client that's already been working with AI, and now maybe needs a little more guidance from, you know Maybe if we were having this conversation a year ago, the conversations were more about getting clients more comfortable with AI and learning there. Are you seeing more contracts where you're coming into an environment where the customer already has some familiarity and now you're working to professionalize? Do you still see a large number of clients that you're doing more teaching on, if that question's asked the right way?

Yeah, it's a good question. I hate to answer it this way, but frankly, it's both. The specific example, this is a very well-known manufacturing company. They began to put together a strategic AI roadmap over the next 8 years. It was an 8-year roadmap. They were in the early stages of developing the roadmap. They asked us to come in and help them complete the roadmap, and in the process, we ended up with this longer-term contract. I would say it's equally that and equally that others are beginning the journey. I know it's hard to believe, but a lot of clients are in the very, very beginning, just like cloud, where they're late, you know, bloomers. Just like certain companies have never outsourced, believe it or not, in 2026.

There are different companies in different industries, and the pace is different. The consumer market, I'll use that one as an example, is red hot. Why is it red hot? There's a lot of pressure on pricing on the consumer. Fuel prices are up. It's taking away some discretionary spend. The pressure to be able to use AI and optimize costs is increasing on the consumer sector, so that's a red-hot industry. I mentioned health sciences as a second one. The public sector, we don't do work at the federal level, but we do work in the state level in the U.S., is also very, very hot.

It varies a little bit, Dave, but I would say we have both sides of that coin that we're working with clients depending on where they are on their journey. That's great commentary. I'll jump back in queue. Thank you. Thanks, Ted.

Our next question is from the line of Vincent Colicchio with Barrington Research. Please go ahead.

Yeah, good morning, Mike.

Good morning, Vince.

You just mentioned that you're seeing some clients new to outsourcing. You know, my question was gonna be, is that happening to a great extent? In other words, is the complexity and shortage of talent and AI expanding, you know, the number of companies you could potentially be working with versus other, you know, recent years?

Good question, Vince. Let me start with the mid-market, we define the mid-market, everybody defines it differently, is under a $10 billion revenue company. Think about it, $1 billion-$10 billion. That is a very sweet spot. Why? Most of them, they all have, of course, CTOs or CIOs, but the depth of experience at those size companies is not near what it is on the, you know, call it the global 1,000 companies. Our ability to go in, especially using Tango as our platform, has been a great door opener, as has the AI Maturity Index, to help them understand the level of maturity that their organization is in. It's eye-opening to them.

What we've been able to do is to penetrate that mid-market where we have never been able to penetrate it because of our pricing scheme before. Now, with AI and the complexity of that, they want to be able to figure out how they can use AI at scale that can change the complexion of their business, and they don't have that level of talent typically inside their organizations. Yes, it's been a nice uplift.

Michael A. Sherrick, what did the acquisitions meet the expectations in the quarter, and what was the contribution?

Again, if you look, quarter-over-quarter, you know, what we really had this quarter was Aiimi. Nothing really materially year-over-year. It did meet our expectation. We continue to be extremely encouraged and optimistic on that transaction, right? It really is a tip of spear door opener type of offering for us, you know, in the world of AI. Again, we did that one knowing it was a technology and it would be that tip of spear, and we've seen that play out. We continue to be very excited with both the offering and specifically the team that we took on from there.

Michael Connors, in APAC, I wasn't clear on if you're seeing the government come around there in Australia?

Yeah. What we are seeing is our pipeline now is very strong, including the public sector. That's why we're pretty bullish on, I mentioned earlier, we expect to be in the 20% growth sequentially in Asia Pacific. That would make it about flat year-over-year. That is making the turn of the corner, and that's being driven because the federal spending based on our pipeline, we see picking up. That should begin to display in the second quarter, and that was what I was referring to there, Vince.

Okay. Nice quarter, gentlemen.

Yep. Thanks, Vince.

Your next question comes from the line of Marc Riddick with Sidoti & Company. Please go ahead.

Hey, good morning, everyone.

Morning, Marc.

Morning, Marc.

I was wondering if you could talk a little bit about what you're seeing as far as catalyst, demand catalyst, maybe from a regulatory standpoint or maybe some other external catalyst as far as the AI activity that you're seeing more recently?

Yeah. The biggest one we're seeing is in the whole area of kind of risk mitigation, compliance, and governance. This is what I was referencing both on the very large client contract we just won. Overall, there is strong sentiment to find the best way to govern the AI spend and the use of the AI tools in broad, big enterprises. You know, when we do this ISG AI Maturity Index, the way it works is that an individual takes 15 minutes, it's all digital. They lay out we get the level of kind of maturity that they are at, including the tools that they're using. Then we can roll it up on an aggregate basis for the organization.

The eye-opener there is that they find out that there are 10, 15, 25 different tools that are being used in their organization globally, and they are a big eye-opener for them. That leads them to, well, how are we going to govern and manage this, exploding use of AI tools and models and so forth. That's the number 1 thing we are seeing, which is benefiting, you know, our thrust in governance services that we started, you know, as you know, several years ago.

Right. Right. Excellent. I was wondering, I'm not sure if you mentioned in your prepared remarks, but sort of where are we now as far as recurring as a % of revenue?

Yep. Let us get you that number, but I think the recurring Do you have that, Michael?

Yeah, just give me one second.

Give us 1 second. We'll get you that.

I think he- I think it's around 47%, something like that. We'll get you the exact precise number, but it's approaching, you know, that 50% mark which we had laid out. We're getting close.

I think we had said it was up 9% versus prior year. It's about I mean, to be exact, it's 47%, so we're approaching that 50% level as Mike just noted.

Yeah. Yeah, that makes sense. That, that was sort of where I was getting to there. I guess last thing from me, I was sort of curious, I know it's early, but the it was nice to see the introduction of the AI Index like now last month, I guess. was wondering maybe you could talk a little bit about some of the thoughts there or feedback that you've received and sort of what your expectations are as far as sort of moving that message forward.

Yeah. No, it's a good question. We launched the ISG AI Index to cover kind of 3 areas: infrastructure as a service, software as a service, and managed services, which are really the 3 largest components of the whole thing. Infrastructure, we use the mark of December 2022, so shortly after the ChatGPT thing came out. We used that as the start point. If you look at it from there through the first quarter of this year, infrastructure as a service is up 160%. Revenue has doubled. Profitability in the companies are up 60%. Their stock's up 113%. CapEx, and this goes to everything you see, is up 265%. It's a clear sign that the growth of AI with the hyperscalers.

If you move to software as a service, they too, despite all the noise about the SaaS players, they're up 53% since that date. Revenue's up 61% with those aggregate software players. Profitability up 18%. Their stock's up 39%. The key metric that we use there is what we call current remaining performance obligations or CRPO, and that essentially is the backlog. That's up 71%. You can see that both of them, despite some of the noise in the market, are performing overall very well. Managed services is up slightly less than 1% since inception. Revenue's up 8%, profitability's up 4%, revenue per employee is up 8%, so think about automation. Stock, though, is down a third.

What we see here is that revenue per employee is increasing despite the pressure on growth and margin, I think you should see that turn over the next 12 months in that segment. The feedback we've gotten is great. We're putting some structure around, I'll call the noise, because our ISG Index, we've been doing it for over 90 consecutive quarters. They love the fact that we are now creating this index and can put some structure around what the, you know, the noise is out in the marketplace. That's where we are on that, Mark.

It's very encouraging. Thank you very much.

Yep, thank you.

Your next question is from the line of Gowshihan Sriharan with Singular Research. Please go ahead.

Good morning, gentlemen. Can you hear me?

Yes, good morning, Gyoshi.

Good. Thank you. I wasn't sure, this $17 million governance contract, did you, can you give us a sense of the economics? Is that a fixed annual fee over that 8-year contract or what does the margin profile look like?

Gyoshi, it's Michael.

Yeah.

Sorry.

Go ahead.

I couldn't hear if you had a follow-on to that, but it's Michael. In contracts like that, specifically, there's really two components. The first starts with a, you know, a I'll call it an implementation, as you're getting everything put in place and ready for the ongoing contract. It's a fixed fee contract thereafter. That's how those are typically structured for us.

Okay. At what point of the year does it kind of start contributing meaningfully to the revenue line?

We, this is Mike. Think about it as roughly $2 million a year. Think about it roughly that way. That should start right toward the tail end of Q2, and we should start to begin to see that, you know, annualized, if you will, starting in Q3.

Gotcha. Right. Awesome. Okay.

Thank you, Gyoshi.

I'm showing no further questions. I'll turn the call back to Michael Connors for closing remarks.

Great. Thank you. Look, in closing, let me thank all of our professionals worldwide for their continuing progress and for their collaboration and unwavering dedication to our clients in driving our long-term success. We had the honor of celebrating this week ringing the closing bell at Nasdaq that represented our twentieth anniversary. It's our people that have a passion for delivering the best advice and support to our clients as they continue on their AI-powered transformations, and I could not be prouder of them. Thanks to all of you on the call for your continued support and confidence in our firm, and have a great day.

This concludes today's conference call. You may disconnect at any time. Thank you again for joining us.

Good morning, and welcome to the Information Services Group Fourth Quarter 2025 Conference Call. This call is being recorded, and a replay will be available on ISG's website within 24 hours. Now I'd like to turn the call over to Mr. Will Thoretz for opening remarks and introduction. Mr. Thoretz, please go ahead.

Thank you, operator. Hello, and good morning. My name is Will Thoretz. I'm Head of Corporate Communications for ISG. I'd like to welcome everyone to ISG's Fourth Quarter conference call. I'm joined today by Michael Connors, Chairman and Chief Executive Officer; and Michael Sherrick, Executive Vice President and Chief Financial Officer. Before we begin, I would like to read a forward-looking statement. It is important to note that this communication may contain forward-looking statements, which represent the current expectations and beliefs of the management of ISG concerning future events and their potential effects. These statements are not guarantees of future results and are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated. For a more detailed listing of the risks and other factors that could affect future results please refer to the forward-looking statement contained in our Form 8-K that was furnished last night to the SEC and the Risk Factors section of our most recent Form 10-K and 10-Q filings. You should also read ISG's annual report on Form 10-K and in the other relevant documents, including any amendments or supplements to these documents filed with the SEC. You will be able to obtain free copies of any of ISG's SEC filings on either ISG's website at www.isg-one.com or the SEC's website at www.sec.gov. ISG undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events or circumstances. During this call, we will discuss certain non-GAAP financial measures, which ISG believes improves the comparability of the company's financial results between periods and provides for greater transparency of key measures used to evaluate the company's performance. The non-GAAP measures, which we will touch on today include adjusted EBITDA, adjusted net earnings and the presentation of selected financial data on a constant currency basis. Non-GAAP measures are provided as additional information and should not be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. A the reconciliation of all non-GAAP measures presented to the most closely applicable GAAP measure, please refer to our current report on Form 8-K, which was filed last night with the SEC. And now I would like to turn the call over to Michael Connors, who will be followed by Michael Sherrick. Mike?

Thank you, Will, and good morning, everyone. I should note that Will is now handling the opening of our call after the passing of a long-time colleague, Barry Holt in December. Barry was with me when I started the firm in 2006 and was heard on all of our investor calls up until now. Our condolence is again to the whole family. Today, we will review our solid Q4 results driven by double-digit growth in Europe and in our recurring revenues. Progress on our AI initiatives, our view of the current demand environment and our outlook for Q1. ISG delivered a strong Q4 to cap off in an outstanding year, powered by continuing client interest in our AI-centered transformation services. In the fourth quarter, nearly 35% of our revenues were from AI-related research and advisory services. For the full year, that number was nearly 30%, up 3x from 2024. This shows that AI is rapidly being mainstreamed as a core aspect of our traditional technology transformation work. Technology disruption has always fueled our growth in times of significant change, enterprises often struggle to adapt, so they turn to a trusted adviser for insights and expertise to chart the path forward and our results reflect that. We are still in the early stages of AI adoption will continue to accelerate as the technology and its governance matures. For our clients, it's not a question of if they will leverage AI, it's a question of how. Success requires the right data engineering, proper governance and workers ready to embrace the operating model changes AI is creating. We're seeing our AI clients leverage our entire value chain, research, benchmarking, advisory and governance, so they can navigate this new paradigm quickly and effectively. For the fourth quarter, ISG delivered revenues of $61.2 million, at the top end of our guidance and up 6% versus the prior year. Our growth was led by Europe, which continued its second half momentum with Q4 revenues up 28% and by our recurring revenues, which were up 13% globally led by our research and platform businesses, especially government services. For the full year, recurring revenues were $112 million, 46% of our total. Propelled by a more profitable mix of business and our strong operating discipline, we saw a continued acceleration of our profitability in Q4. Adjusted EBITDA was $8.1 million, that was up 24%, and our EBITDA margin rose nearly 200 basis points to 13.2%. For the full year, our revenues were $245 million, up 7%, led by an 11% growth in our Americas region, and this excludes our '24 results from the divested automation unit. Our adjusted EBITDA exceeded $32 million, and that was up 28% versus the prior year. And our margin for the full year was 13.2%, up 300 basis points. ISG continues to be a cash-generating engine with full year operating cash flow of $29 million, up 46% versus the prior year. A little over 2 years ago, we launched a series of initiatives and investments to establish leadership in AI, and we're continuing to develop and deploy new capabilities as we move through 2026. In January, we acquired the AI Maturity Index, it's an AI readiness benchmarking and intelligence platform that allows organizations to identify gaps in their workforce readiness and use a data-driven approach to achieve rapid improvement. Combined with our change management services, our AI maturity offering helps clients accelerate the return on their AI investments. The platform is already generating strong interest in opening up new client discussions about our broad range of AI-related capabilities. Also in January, we formed a dedicated team to drive continued expansion of our AI leadership. This AI acceleration unit is addressing our most complex and far-reaching AI initiatives. It is led by our Chief AI Officer, Steve Hall, who returned from Europe this month and will now have this unit on a full-time basis. The team includes experts from across our advisory, research and change management teams. We are living in an AI-centered world and are committed to seizing this opportunity. Nearly every technology transformation now requires some element of AI, and this is fundamentally changing the value proposition for both service and software providers. We are at the center of this revolution with innovations like our autonomy level pricing model, which provides clients a new way to value work depending on the degree of AI effort applied to a task. Our AI-powered sourcing solution, ISG Tango is built to address this changing landscape. We continue to add new functionality and expand the amount of total contract value, or TCV, we run on the platform. It is now more than $25 billion. That's up from $7 billion from the prior year. Now let me turn to our regions. The Americas delivered $38 million of revenue in Q4 and driven by double-digit growth in our research and governance businesses and in our consumer and enterprise industry verticals. For the year, excluding the '24 results from the divested automation unit. The Americas region finished up 11%, its best performance since 2021. Key plan engagements during the fourth quarter included Baxter, AGCO and Marriott. During the quarter, we won a multimillion dollar engagement with a leading consumer products company. ISG is supporting a next-generation global business services program. leveraging AI and other technology to optimize processes across this company. Their goal is to reduce operating costs by 40%. We also generated more than $1 million in revenue, working with a leading U.S. hospital network. This one on an AI-driven technology sourcing engagement that will deliver savings to this company of more than $130 million or 20% of their operating costs. Our Europe region continued its second half momentum with an excellent fourth quarter. Revenues were up 28% to $19 million, driven by double-digit growth in our advisory software and research businesses. and in our consumer health sciences, manufacturing and public sector verticals. Key client engagements in Europe in the fourth quarter included manpower, American Express and Roche. ISG is working with a large multinational player at the heart of the AI industry on a series of engagements worth more than $1 million. Our work includes helping this client incorporate AI and detect service management, workplace benchmarking, hybrid cloud sourcing and software, engagements that have firmly established ISG as the client's adviser of choice and provide us with a strong foundation for additional work through the year. And another $1 million-plus engagement, we're working with a global marketing and media company to deliver technology strategy, sourcing and transformation. With software providers incorporating AI aggressively into new contracts, we're also conducting a complex multi-region software advisory engagement. This will generate $15 million in annual savings for this client alone and align their AI consumption with demand. Now turning to Asia Pacific. Our Q4 revenues of $3.9 million were down $1.1 million compared with the prior year. We did see double-digit growth in our insurance industry vertical. However, we will need the public sector, as I mentioned a while back to reignite greater spending for this region to return to historical growth patterns, which we expect later this year. Key clients in the quarter include Singtel Optus with Singapore Exchange and Resolution Life. During the quarter, we won a $1 million engagement with a large Australian retailer to support the client's AI-driven technology transformation and its selection of a BPO provider to modernize its finance operations and HR functions with an AI-enabled business processes. Now let me turn to the broader market. As we look at overall demand, we see clients remaining cautious in a still uncertain macro environment, even if they continue to invest in AI-related business transformation, cost optimization and insights to plan the journey ahead. Increasingly, we see clients demanding clear business outcomes, a reshaping of their partner ecosystems and specialized capabilities. This plays directly to our strengths. ISG is well positioned to deliver insights and actions that lead to real business value for clients. Our proprietary data platforms and the on-the-ground expertise continue to deliver great ROI for our clients. So with that, let me turn to guidance. Despite continued macroeconomic uncertainty, ISG remains well positioned, and we are confident in our ability to capitalize on the accelerating demand for AI-led transformation. For the quarter, we expect revenues in the range of $60.5 million to $61.5 million and adjusted EBITDA between $7.5 million and $8.5 million representing continued year-over-year growth. Now let me turn the call over to Michael Sherrick, who will summarize our financial results. Michael?

Thank you, Mike, and good morning, everyone. Revenue for the fourth quarter was $61.2 million, up a solid 6% from the prior year. For the quarter, currency had a positive $1.3 million impact to revenue. Americas revenue was $38.3 million, up 1% in the fourth quarter. For the full year, excluding the 2024 results from our divested automation unit Americas revenue was up 11%, its best year-over-year growth in 4 years. For the quarter, Europe delivered revenue of $19.1 million, up 28%, while Asia Pacific revenue was $3.9 million, down $1.1 million from the prior year. Fourth quarter adjusted EBITDA was $8.1 million, up 24% from $6.5 million in the year-ago period and resulting in an EBITDA margin of 13.2%, which was 189 basis points higher year-on-year. For the quarter, ISG delivered operating income of $5.1 million, resulting in an operating margin of 8.4%. Reported net income for the quarter was $2.6 million or $0.05 per fully diluted share as compared with net income of $3 million or $0.06 per fully diluted share in the prior year. I would note, during the fourth quarter of 2024, ISG recorded a $2.3 million net gain on the sale of its automation unit. Excluding this gain, net income and GAAP EPS would have been $0.7 million and $0.01 per fully diluted share, respectively. Fourth quarter adjusted net income was $4 million or $0.08 per fully diluted share compared with adjusted net income of $3 million or $0.06 per fully diluted share in the prior year's fourth quarter. Headcount as of December 31, 2025, was 1,290. For the quarter, consulting utilization was 69%, in line with our average fourth quarter utilization. Full year utilization of 73% was in line with our mid-70s target. We ended the year with cash of $28.7 million, flat from the end of the third quarter and up $5.6 million year-on-year. For the quarter, net cash provided by operations was $5.1 million, supported by our solid operating results and continued focus on working capital. For the full year, we generated operating cash flow of $29 million, up 46% year-on-year. During the quarter, we paid dividends of $2.2 million and repurchased $2.3 million of stock. Our next quarterly dividend will be paid March 26 to shareholders of record as of March 20. At quarter's end fully diluted shares outstanding were $50.5 million, down $100,000 from the prior year. Our quarter-end gross debt-to-EBITDA ratio was just under 1.9x, down from 2.4x at December 31, 2024, and just below our 2x to 2.5x target range. At quarter's end, our debt was unchanged. And for the quarter, our average borrowing rate was 5.8%, down 125 basis points year-on-year. Overall, our balance sheet remains solid and continues to improve, providing us with a strong foundation to both operate and invest in the business, especially in our AI initiatives. Mike will now share concluding remarks before we go to Q&A. Mike?

Thank you, Michael. To summarize, ISG delivered another strong quarter, continuing our AI-powered momentum. Our 6% revenue growth in Q4 was led by double-digit growth in Europe and our recurring revenue businesses. We grew our adjusted EBITDA by 24% and margins by nearly 200 basis points. Our strong Q4 capped an outstanding year with revenues up 7%, driven by an 11% growth in the Americas. Adjusted EBITDA was up 28% and margins for the year up 300 basis points. We continue to generate strong cash flow, delivering operating cash of $29 million for the year, up 46%. Looking ahead to disruptive and powerful force of AI will continue to be a growth catalyst for ISG as the technology matures and adoption begins to scale. In this environment, our ability to deliver the full value chain of our research, our benchmarking, advisory and governance is a key competitive advantage for ISG. One that we believe enhances ROI for our clients and creates long-term value for our shareholders. So thank you very much for calling in this morning. And now let me turn the session over to the operators for your question.

[Operator Instructions] Our first question comes from Marc Riddick from Sidoti.

Good morning. So I wanted to start with some of the things that you're seeing. Maybe you could talk a little bit about -- you touched on this in the prepared remarks might be a little bit on what you're seeing as to differentiation of climate verticals. But also maybe you could talk a little bit about -- you've talked in the past about the sort of the offensive versus defensive spending that you're seeing? Maybe you could talk a little bit about maybe how that's evolved and maybe what you're seeing currently there?

Yes. So look, I think, first of all, there is -- I think it's a mix, Marc, there's a lot of defense going on, but there's also a lot of offense. I think it varies by industry segment, if I was thinking about the industries and thinking about offense, defense. First of all, where we're seeing a real significant area is around consumer, around retail. We see it around the financial services area, energy, utilities. And why is all that? Well, certainly, the consumer has been hit pretty hard in this whole kind of macro environment. The challenges around AI and the data centers puts pressure on the energy and utility companies. With the oil kind of moving, now the energy companies are flushing a bit more with cash. But we're seeing kind of a combination of trying to get a transformation journey going, and it varies. The consumer side is very defensive, I would say, on most of the areas. And clients like the energy side or even health sciences, I would say, are a little more offensive. So it's mixed back but all of them are working to try to figure out how they can embed AI to make their operations efficient, make it smoother for our client, customer exchange or user experience. And so it's kind of all over the board, which is good for us. There's a lot of disruption, and we like disruption from both a technology and an industry standpoint, Marc.

Great. And then I know it's a little early in the process, I suppose, but maybe you can talk a little bit about the acquisition early days. It seems as though it's something that's it's fairly attractive for you and as well as the opportunities and maybe add clients from the base that you currently work with. But maybe you could talk a little bit about be it the early days of what you're seeing with the maturity innings as well as then maybe you could segue into sort of the current acquisition appetite and maybe what you're seeing out there?

Yes. So again, what this does is it assesses kind of the readiness by individual in an organization. And then you add up all the individuals and you get a good picture of the readiness of the workforce. Let me give you an example. There was a company, there was a large, let's call it, audit firm that one of the big technology firms was developing a new audit platform for. And as a result of this or platform, they estimated that they could save if you think about a lot of the work that goes on and quarterly gatherings of information from audit firm, they thought they could estimate savings of somewhere between 20% and 30%. It turns out that technology was great, but the audit partners were not willing to engage and embrace the new platform. Why? Well, the new platform, if you can actually take 20% to 30% cost out of some of those services, if you're charging a large client x millions of dollars for that audit today, likely you are not charging that same amount for that audit tomorrow with a new kind of efficient audit platform. That group was not ready, although they spent the money from a technology standpoint to prepare them. What this assessment does is it allows us to go into clients, assess individuals, build it up and clear prices understand what is the readiness level of their workforce to embrace, engage views and be ready for AI. And so for us, this is opening doors because our AI, energy and efforts around a lot of our clients. This readiness is an important factor to be sure that they can have success when implementing them. So anyway, it's -- as we think it's a great door opener for us, and it really has been a nice little add-on to our overall AI advisory business. And I will say, Marc, we are happy to have you or anyone on this call, we're happy to send you a link. You can take it yourself, this readiness on an individual basis. It literally takes only about 15 minutes. You get your own report, you get your own assessment. It's all done digitally, if you will, and it's pretty cool. So just let us know.

Sounds good. Looking forward to that, definitely. And then maybe just thoughts on the current acquisition pipeline out there or appetite for -- certainly with the balance sheet being stronger, continuing to improve. Maybe talk a little bit about your appetite, currently.

Yes. So we are still in the market. We are constantly looking at M&A, as you know, that is kind of our heritage. We're looking at anything that can help us around recurring revenues and help us around our AI journey with clients. And the market is pretty good. We're having some good discussions, and we'll see how things unfold. But we're in a pretty strong position, and we feel pretty good about what may be out there during the course of the next year or so.

Our next question comes from David Storms from Stonegate.

Just wanted to maybe circle back to the acceleration unit. What do early wins look like for them? I know there's a lot up in the air and things are changing rapidly. But what would you hope to accomplish over maybe the short to medium term?

Yes. I think from a quantitative standpoint, I'll start there and kind of build into it. We have about 30% of our revenues today that are AI related. Now that's up from about 10% about a year or so ago. We are looking to get to 50%. And one of the reasons for that is, is that we have a great talented upskilled workforce globally. And because of that, we are in high demand on all things AI. And with that, that means we want to be able to utilize the capabilities we have with our client base, and we have, I think, some pretty firm pricing as a result of that. . So number one, just from a targeting standpoint, we want this unit to help us move from kind of 30% to 50%. So if you want to look at it on a quantitative basis. The key is this is kind of a small almost I'll look at it as a seal team where we have our Chief Software Analyst, we have a Chief Change Management Officer. We have our Chief AI Officer, which Steve Hall has been that for almost 3 years now. We have this small group of people that are really helping us accelerate on a global basis. And that's what we're looking to accomplish, continuing to add features like the AI Maturity Index and other things as we move through '26 and '27. So that's our thinking around it, Dave.

That's great color. I appreciate that. With a lot of the movement that we're seeing with [indiscernible] landscape, how are you seeing the visibility in your pipeline change? Or is it becoming more difficult to manage that as things move through the process faster? Or are you seeing customers maybe measure twice and cut once and still have maybe some extended sales cycles?

Yes, it's a good question. It does mix. We have seen -- let me use the U.S. We have seen some things in the U.S. move out of the first quarter into the second quarter. The pipeline is still very strong. The pace is a bit mixed, again, depending on what's going on in the world. We have the new tariff situation. Now we have a bit of the geopolitical, that always puts a little bit of a little bit of fear into the buyers, if you will. But having said that, I think our view of '26 is that we will see our work, we will see an acceleration as we go through the year. I think you'll continue to see Europe where it is. I think Asia Pacific will be a back half. I think the U.S. will be -- we have a tough compare quarter-over-quarter in the first quarter, but you'll see the U.S. really accelerate, I think, in Q2 onwards based on our pipeline. So it's a little bit mixed, and it just kind of depends on this macro environment and how people behave. But the demand is there. The pipe is there, the pace I think will be choppy for a quarter or 2 quarters, depending on how the world reflects.

That's great. I do really appreciate that. And then maybe just one more for me, trying to tie together your recurring revenue and the AI revenue. Are you seeing AI spend be pretty recurring? Or are there sections of it that tends to be more or less recurrent than others? Just any thoughts there would be great.

Yes, Dave, it's Michael. I mean, I think it's a mix. I mean, as you can imagine, AI is very quickly becoming a part of most projects and things that we do. And so as a result, some will be in things that are recurring, right? Things like governance, things like research, those will be recurring and others will be embedded into two projects, right, where we're looking at back office towers that are moving to a genetic AI and other forms of technology to help automate and drive efficiency. So it's going to be a combination, very similar, I think, to prior technology movements.

Our next question comes from Vince Colicchio from Barrington Research.

So I'd like to have you talk about labor supply for a moment. we know that with -- in AI type work, labor is leverageable, highly productive. But having said that, is your AI -- are your AI capabilities where they need to be to meet current demand. And to get to your 50% target, will it be difficult to get the people you need?

Yes. Good question, Vince. First of all, we have now -- while we scale the entire workforce up on AI skills and so on through the end of last year, we now have what we call an advanced training that's ongoing that we expect all of our client-facing colleagues around the world to be completed by the end of April. So this will take them to another level. The second bit is because we have 30% of our revenues and engagements that have embedded, if you will, and we're getting a lot of hands on experience with our team. So one, I think we're going to be in a very good place skill-wise, I think we're going to be in a very good place in terms of real, live engagements, hands-on work with our clients, and we feel pretty good that we have the talent base or can attract the talent base to supplement what we currently have, but we have been reskilling and upskilling our teams now for almost 18 months and feel pretty good about it. So from a labor standpoint, we've always had very low turnover industry, as you know, quite a bit below industry averages, and that continues today. So that allows the retention of the skill sets that we have and then we'll complement it accordingly.

So it sounds like Europe will continue to be strong in Q1. And just curious about what service lines should lead in Q1 into early Q2?

Yes. So I think you're right, that's how we see it, if we see the U.S., they have a tough quarter-over-quarter compare, but Europe still continue kind of their strong, if you will, growth areas. But the area there will continue to be and all things on the recurring revenue streams in Europe. The backlog, as you know, we talked about this, Europe was a little behind the U.S. It began to catch up in terms of buyer behavior and movement on AI journey during the second half of last year, it's picked up momentum. You saw that in the fourth quarter, and we think you'll see that in in the first quarter. The pipeline in the U.S., in particular, is very heavy. Things have moved out a little bit, but we expect that also to move nicely upwards as the year progresses. So our recurring revenues around research, our governance, especially AI governance are all very hot, and we expect that to continue during the first quarter.

When I think about this index business, it seems like a really good tip of the spear to get you into a lot of new accounts. I assume you're thinking like that. And are you seeing that pay off so far? I mean it's very early.

Yes. It is a tip of the spear, and it's -- we've got about 30 clients that are currently in our pipeline. But more importantly, we are using it as a door opener with our AI services. It's a terrific tool. It's a terrific assessment. It gives instant feedback to an enterprise in terms of where their workforce is. So yes, we're very excited about. It's kind of the tip of the spear. We like it and as I said earlier, we're happy to send you the link for you to do it yourself. It's all gone electronically digitally. It's pretty swift. You'll see how it operates with the clients as well.

Our next question comes from Kasi SriHari from Singular Research.

Yes. So my first question is for what you're seeing in the field, are clients beginning to consolidate their advisory and benching spend around a smaller set of partners for AI and sourcing? Or is the wallet share still spread across multiple firms?

Good question. I think from our perspective, we think there's going to be some consolidation. And the reason we think it is because clients want more of them being informed with information. They want an outcome. So the insights are going to be very important, but execution with scale is probably even more important. And if you can combine the insight with the advisory of sale, and then you can actually help them AI govern, we think that's nirvana. And that's why we think we're really well positioned. So we'll see how this progresses over the next year or 2 years. But our sense is that clients are becoming much more interested in an outcome based, not just being informed. So that's how we see this evolving over the next couple of years.

And as you deploy this majority index with more clients. Are you seeing any patterns by industry or geography in terms of who's actually generally ready to scale versus who is still in the early stage? And how does that prioritize your own go-to-market strategy?

No, it's a good question. I think it's too early to give you a, I'll call it, a fact-based assessment on that. I would say that based on what we have done from an assessment standpoint, what this index has done, it's pretty all over the board. It's really the -- because it's still so new, we think it's we all are seeing this every day, and we think it's been around. But the reality is this is 2.5 years old, but really less than that in terms of any kind of scale going on. So I think it's a mixed bag. I don't have an industry specific, if it's that. I would say that when the workforce is as dispersed and divested as a major Global 200, Global 300 company, much more difficult to get the readiness. If the enterprise is smaller and a little more contained, maybe a bit better. But we'll need a little more time to get a fact-based approach. But right now, it's pretty broad-based, I would say.

Got it. And given that with your new team related to, given that most 30% of your revenue is now AI-related, what portion of your delivery teams are actually spending majority of the tape in AI-centric versus more traditional sourcing and transformation mix to evolve in 2026?

Yes. No, that's a very good question. I think I would say 75%, 80% of our workforce is now engaged in something AI related. It may be very early stage and therefore, converting from revenue maybe smaller in some cases. But when you have 30% of your revenue, you're getting it heavier in some spots, lighter and others. But I would say 75% to 80% of our workforce now is touching AI in their work. .

And does the AI world come with premium pricing in terms of billable holes?

We think that the AI work that we're doing is, I'll call it, firmly priced.

Okay. Got you. And on the consumer side, you mentioned that that's a very hot vertical for you, partly because of the tariffs. And with the recent consumer win, are the consumer engagements tending to be -- I assume are not to be short on the urgent but cost takeouts more long term? And can you talk about how you're transforming that into a multiyear relationship, if you could talk about that over?

Yes. No, good question. So on the consumer side, we're very very active with a number of large consumer companies globally, and I gave a few examples, I think, in our prepared remarks. But what they're really looking at is taking their entire kind of operating cost base kind of breaking that up into different, I'll call it, towers and saying, how can we optimize that cost base in the very near term utilizing all the technology capability that's out there and do it at scale and with a significant outcome. And that's why I think some of the examples I gave you, we have one we're working on a very large consumer company. Their goal is 40% of their operating costs reduced within the next 3 to 4 years. It's a very large number. It's a multibillion dollar, if you will, optimization, using technology, using AI, using automation, using lots of other techniques but that is not atypical of the consumer companies, different scale on that one. The other one you saw -- I think I gave an example was a 20% optimization using it. The way they're looking at it is first inform me, give me the research you have around AI, the capabilities, what does the ecosystem look like, you are experts in that. Tell me who is out there, who is doing one at what levels? How does that apply to my particular business and then importantly, help me execute it. So don't just inform me, don't just give me an analyst kind of perspective, but give it to me, advise me, help me execute it all the way to the end. And that is what we're seeing there.

Our last question comes from Joe Gomes from NOBLE Capital.

Jacob Mutchler on for Joe Gomes this morning. My first question is related to ISG Tango. Just curious if you could talk about what is driving that growth and how that -- how Tango's performing with mid-market clients and -- and then also if you could touch upon a comment you made on the prepared remarks about, I believe it was increasing, was it the technical capabilities of Tango or maybe the amount of flow that it could handle -- any color would be appreciated.

Sure. Well, first of all, on pain, let me cover a couple of things just to give you the scope and scale. We have about $25 billion of contract value now running through that approximately. So this is at approximately $11 billion of that, so call it a little over 40% of that is the mid-market. You'll recall when we launched this, we felt that this platform would enable us to go into companies that we had not been into before. because of the way we price, which is higher priced, if you will, tougher to justify at a mid-market company. But what Tango does is it digitizes a lot of the process. And so the beauty of it is that it's a win-win for the enterprise. And the enterprise, we put all the data onto our platform. The ones that are bidding for some of the work that the enterprise wants to have done, whether it's in infrastructure or applications or supply chain, they get to go to the digital platform. The client then can see everything that the technology companies like the IBMs or Accenture are doing. And then what the outcome is, is that for the enterprise, they get speed to value. So what may have taken longer will take shorter because it's all digitized. And from the technology provider standpoint, take it the Accenture, the IBM, they know that there's going to be an outcome. So the the cost of the pursuit of the enterprise X., they know that they're making an investment. They may win they may lose, but they know they're going to be a winner or a loser. And so from that standpoint, they know there'll be an outcome, and they also get speed to the outcome. So the process from beginning to end is also quicker. And then from an ISG standpoint, we are able to gather of all that data. We put it into our black box. And importantly, we're able to utilize talent in a bit more flexible way on a global basis because it takes us a little less time, and we can take our talent and spread them over multiple kind of engagements. So that's the win-win-win with Tango, and that's why I think it's moved at the pace that it has. So the mid market, by the way, is -- yes, I said about 30%. I think it's around 25% -- it's around 25%, just to give you -- just to clarify, Jason.

Got you. Okay. And then briefly turning to Asia. What is the -- I know you mentioned that you're expecting to return to growth in the back half. Is there a catalyst of what's going to precipitate that event? Or just any color around what's going to help drive Asia back to growth?

Yes. Jacob, I think it's Michael. As Mike commented, for Asia, we really need to see the the public sector begin to improve. We've seen some improvement in the pipeline there. Obviously, we need to close that business, but that's obviously the the early sign of beginning to see some life come back is that we're seeing some better opportunities in our pipeline.

And I'm showing no further questions. I'll turn the call back over to Mike Connors for his closing remarks.

Okay. In closing, let me thank all of our professionals worldwide for our continuing progress and further collaboration and unwavering dedication to our clients in driving our long-term success. I think our people have a passion for delivering the best information, insights, advice and support to our clients as they continue their AI-powered transformations, and I could not be prouder of them. And thanks to all of you on the call for your continued support and confidence in our firm. Have a great rest of the day.

This concludes today's teleconference. You may disconnect at any time.