What changed in this filing

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Item 1. Financial Statements

2026-05-08 compared with 2025-11-03 · 89 added, 167 removed, 275 unchanged (48% of the section changed)

3 unchanged sentences

(In thousands, except par value)

September 30,

Current assets

11 unchanged sentences

Accounts payable

Current maturities of long-term debt

Contract liabilities

12 unchanged sentences

100,000 shares authorized;

49,706 shares issued and 47,948 outstanding at September 30, 2025 and 49,658 shares issued and 48,542 outstanding at December 31, 2024

49,707 shares issued and 47,767 outstanding at March 31, 2026 and 49,707 shares issued and 47,774 outstanding at December 31, 2025

Additional paid-in capital

9 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Operating expenses

5 unchanged sentences

Interest expense

Gain on the sale of business

Foreign currency transaction loss

Foreign currency transaction gain

Income before taxes

Income tax provision

Net income (loss)

Weighted average shares outstanding:

Earnings (loss) per share:

Comprehensive income (loss):

Net income (loss)

Earnings per share:

Comprehensive income:

Foreign currency translation gain, net of tax expense (benefit) of $( 81 ), and $ 126 respectively

Comprehensive income (loss)

Comprehensive income

The accompanying notes are an integral part of these condensed consolidated financial statements.

4 unchanged sentences

Stockholders’

Balance June 30, 2025

Other comprehensive income

Balance December 31, 2025

Other comprehensive loss

Treasury shares repurchased

1 unchanged sentence

Issuance of treasury shares for restricted stock units ("RSUs") vested

Issuance of shares for acquisition of Martino & Partners

Accrued dividends on unvested shares

1 unchanged sentence

Stock-based compensation

Balance September 30, 2025

Balance March 31, 2026

Comprehensive

5 unchanged sentences

Issuance of treasury shares for restricted stock units ("RSUs") vested

Issuance of shares for acquisition of Martino & Partners

Accrued dividends on unvested shares

1 unchanged sentence

Stock-based compensation

Balance September 30, 2025

Comprehensive

Stockholders’

Balance June 30, 2024

Other comprehensive income

Treasury shares repurchased

Proceeds from issuance of ESPP shares

Issuance of treasury shares for RSUs vested

Accrued dividends on unvested shares

Dividend payable

Cash dividends paid to shareholders ($ 0.045 per share)

Stock-based compensation

Balance September 30, 2024

Comprehensive

Stockholders’

Balance December 31, 2023

Other comprehensive loss

Treasury shares repurchased

Proceeds from issuance of ESPP shares

Issuance of treasury shares for RSUs vested

Issuance of shares for Change 4 Growth

Accrued dividends on unvested shares

Dividend payable

Cash dividends paid to shareholders ($ 0.09 per share)

Stock-based compensation

Balance September 30, 2024

Balance March 31, 2025

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

(In thousands)

Nine Months Ended

September 30,

Three Months Ended

Cash flows from operating activities

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation expense

Amortization of intangible assets

Deferred tax expense (benefit) from stock issuances

Deferred tax (benefit) expense from stock issuances

Amortization of deferred financing costs

2 unchanged sentences

Provisions for credit losses

Gain on the sale on business

Deferred tax (benefit) provision

Deferred tax provision (benefit)

Changes in operating assets and liabilities:

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Accrued expenses and other liabilities

Net cash provided by operating activities

Net cash (used in) provided by operating activities

Cash flows from investing activities

Acquisition of Martino & Partners, net of cash acquired (Note 4)

Purchase of furniture, fixtures and equipment

Net working capital settlement from divestiture (Note 2)

Net cash used in investing activities

2 unchanged sentences

Repayment of outstanding debt (Note 10)

Additional proceeds from the sale of the Automation business (Note 2)

Additional proceeds from the sale of the Automation business

Proceeds from issuance of employee stock purchase plan shares

Payments related to tax withholding for stock-based compensation

Payment of contingent consideration

Cash dividends paid to shareholders

9 unchanged sentences

Non-cash investing and financing activities:

Right-of-use assets obtained in exchange for lease liabilities (Note 11)

Issuance of treasury stock for vested restricted stock units

5 unchanged sentences

Information Services Group, Inc.

(the “Company” or “ISG”) is a global AI-centered technology research and advisory firm.

(the “Company”, “ISG”, “we”, “us”, or “our”) 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, in-depth knowledge of provider ecosystems, and the expertise of its 1,300 professionals worldwide working together to help clients maximize the value of their technology investments .

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.

The content on the Company’s website is available for informational purposes only.

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 Form 10-Q or any other filings.

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

NOTE 2—BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements and pursuant to Form 10-Q and Article 10 of Regulation S-X.

In the opinion of management, all adjustments (consisting of normal recurring accruals) have been made that are considered necessary for a fair statement of the financial position of the Company as of September 30, 2025, the results of operations for the three and nine months ended September 30, 2025 and 2024 and the cash flows for the nine months ended September 30, 2025 and 2024.

In the opinion of management, all adjustments (consisting of normal recurring accruals) have been made that are considered necessary for a fair statement of the financial position of the Company as of March 31, 2026, the results of operations for the three months ended March 31, 2026 and 2025 and the cash flows for the three months ended March 31, 2026 and 2025.

The condensed consolidated balance sheet as of December 31, 2025 has been derived from the Company’s audited consolidated financial statements.

Operating results for the three and nine months ended September 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.

Operating results for the three months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026.

Certain information and disclosures normally included in the notes to annual financial statements prepared in accordance with GAAP have been omitted from these interim financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”).

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of $ 2.0 million.

Additionally, pursuant to the purchase agreement, which provided for a working capital adjustment, the Company received $ 0.7 million from UST Global Inc.

as final settlement during the third quarter of 2025.

Out-of-Period Adjustment

In conjunction with the Company’s close process for the second quarter of 2024, management identified a $ 0.5 million error related to revenue incorrectly recognized during the third quarter of 2022.

Accordingly, the Company recorded a $ 0.5 million adjustment in the second quarter of 2024 to reduce revenue.

Management evaluated the pre-tax impact of this error of $ 0.5 million on the Company’s previously reported interim and annual financial statements for Q3 2022 and full year 2022 and determined that the error was not material to any previously issued financial statements and

that the out-of-period adjustment recorded in Q2 2024 was not material to the three or six months ended June 30, 2024.

The error was not material to the nine months ended September 30, 2024, or the annual period ended December 31, 2024.

NOTE 3—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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Actual results may differ from those estimates.

The complexity of the estimation process and issues related to the assumptions, risks and uncertainties inherent in the application of the revenue recognition guidance for contracts in which control is transferred to the customer over time affect the amounts of revenues, expenses, contract assets and contract liabilities.

to the customer over time affect the amounts of revenues, expenses, contract assets and contract liabilities.

Numerous internal and external factors can affect estimates.

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Restricted cash consists of cash and cash equivalents which the Company has committed for rent deposits and are not available for general corporate purposes.

The carrying value of the Company’s cash and cash equivalents, receivables, accounts payable, other current liabilities and accrued interest approximated their fair values as of September 30, 2025 and December 31, 2024 due to the short-term nature of these accounts.

The carrying value of the Company’s cash and cash equivalents, receivables, accounts payable, other current liabilities and accrued interest approximated their fair values as of March 31, 2026 and December 31, 2025 due to the short-term nature of these accounts.

Fair value measurements were applied with respect to the Company’s non-financial assets and liabilities measured on a nonrecurring basis, which would consist of measurements primarily to goodwill, intangible assets and other long-lived assets and assets acquired and liabilities assumed in a business combination.

9 unchanged sentences

Basis of Fair Value Measurements

September 30, 2025

March 31, 2026

Cash equivalents

4 unchanged sentences

Contingent consideration (1)

(1) As of September 30, 2025, the current contingent consideration is included in “Accrued expenses and other current liabilities”.

As of December 31, 2024, the current and noncurrent contingent consideration are included in “Accrued expenses and other current liabilities” and “Other liabilities”.

The following table represents the change in contingent consideration liability during the nine months ended September 30, 2025:

Nine Months Ended

September 30,

(1) As of March 31, 2026 and December 31, 2025, the noncurrent contingent consideration is included in “Other liabilities”.

The following table represents the change in contingent consideration liability during the three months ended March 31, 2026:

Three Months Ended

Beginning Balance

Change 4 Growth contingent consideration payment

Martino & Partners contingent consideration accrued

Accretion of contingent consideration

Ending Balance

The Company’s accompanying unaudited condensed consolidated financial instruments include outstanding borrowings of $ 59.2 million at both September 30, 2025 and December 31, 2024, which are carried at amortized cost.

The Company’s accompanying unaudited condensed consolidated financial instruments include outstanding borrowings of $ 59.2 million at both March 31, 2026 and December 31, 2025, 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 September 30, 2025 and December 31, 2024, respectively.

The fair value of the Company’s outstanding borrowings was approximately $ 59.5 million at both March 31, 2026 and December 31, 2025.

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 5.8 % and 6.4 % as of September 30, 2025 and December 31, 2024, respectively.

The incremental borrowing rate used to discount future cash flows was 5.3 % at both March 31, 2026 and December 31, 2025, 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 the first quarter of 2026, the Company borrowed $ 20.0 million and subsequently repaid $ 20.0 million of the outstanding balance on its revolving credit facility.

The Company is currently in compliance with its financial covenants.

Recently Issued Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (the “FASB”) issued updated guidance to enhance the transparency of income tax disclosure by requiring disaggregated information about an entity’s effective tax rate reconciliation, as well as information on taxes paid.

This updated guidance is effective for annual periods beginning after December 15, 2024 and is not expected to have a material impact on the Company’s consolidated financial statements.

Income Statement Disaggregation

In November 2024, the FASB issued ASU 2024-03 to improve the disaggregation of income statement expenses.

In November 2024, the Financial Accounting Standards Board (the “FASB”) issued ASU 2024-03 to improve the disaggregation of income statement expenses.

This updated guidance requires additional disclosure of certain amounts included in the expense captions presented on the statement of operations as well as disclosures about selling expenses.

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The Company does not expect ASU 2024-03 to have a material impact on the Company’s consolidated financial statements.

NOTE 4—MARTINO & PARTNERS ACQUISITION

Intangibles-Goodwill and Other-Internal-Use Software

In September 2025, the FASB issued ASU 2025-06 to modernize the accounting for software costs.

Under the new guidance, internal-use software costs are capitalized when management has authorized and committed to funding the project, and it is probable that the software will be completed and used for its intended function.

This updated guidance addresses challenges in applying outdated guidance to modern software development methods, such as agile programming, which are incremental and iterative rather than sequential.

The ASU is effective on a prospective basis, with the option for

retrospective application, for annual periods beginning after December 15, 2027.

The Company is currently evaluating the impact on our consolidated financial statements.

NOTE 4—ACQUISITION

AI Maturity Index Acquisition

On January 13, 2026, ISG entered into an asset purchase agreement to acquire substantially all of the assets of AI Maturity Index, a SaaS (Software as a Service) platform that allows organizations to assess the AI readiness of their workforces and improve their employees’ ability to leverage AI technology, for total consideration of $ 750,000 , consisting of $ 500,000 paid at closing and $ 250,000 of fixed deferred consideration payable two years from the signing date.

The assets acquired consist primarily of developed software and related intellectual property that will be integrated into ISG’s AI-related offerings, including the ISG AI Maturity Index.

The acquired assets will not operate as a standalone business post-acquisition.

The related software acquired, which is capitalized within “Furniture, fixtures and equipment, net,” will be amortized on a straight-line basis over four years .

Martino & Partners Acquisition

On September 1, 2025, the Company completed the acquisition of Martino & Partners s.r.l.

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The primary factors that drove the goodwill recognized, the majority of which is deductible for tax purposes, were the inclusion of legacy Martino & Partners workforce and the expansion of the Company’s client base, geographic footprint and capabilities in the European market.

Costs associated with this acquisition are included in the selling, general and administrative expenses in the Consolidated Statement of Income and Comprehensive Income and totaled $ 0.08 million during the nine months ended September 30, 2025.

Costs associated with this acquisition are included in the selling, general and administrative expenses in the Consolidated Statement of Income and Comprehensive Income and were immaterial.

Based on the valuation and other factors as described above, the purchase price assigned to intangible assets and the amortization period were as follows:

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NOTE 5—REVENUE

The majority of the Company’s revenue is derived from contracts that can span from a few months to several years.

The Company enters into contracts that can include various combinations of services, which, depending on contract type, are sometimes capable of being distinct.

The majority of our revenue is derived from contracts that can span from a few months to several years.

We enter into contracts that can include various combinations of services, which, depending on contract type, are sometimes capable of being distinct.

If services are determined to be distinct, they are accounted for as separate performance obligations.

1 unchanged sentence

A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied.

The majority of the Company’s contracts have a single performance obligation as the respective promise to transfer the individual services is not separately identifiable from other promises in the contracts and, therefore, is not distinct.

For contracts with multiple performance obligations, the Company allocates the transaction price to each performance obligation using its best estimate of the stand-alone selling price, or SSP, of each distinct product or service in the contract.

The majority of our contracts have a single performance obligation as the promise to transfer the individual services is not separately identifiable from other promises in the contracts and, therefore, is not distinct.

For contracts with multiple performance obligations, the Company allocates the transaction price to each performance obligation using our best estimate of the standalone selling price, or SSP, of each distinct product or service in the contract.

The Company establishes SSP based on management’s estimated selling price or observable prices of products or services sold separately in comparable circumstances to similar clients.

The Company’s contracts may include promises to transfer multiple services and products to a client.

Our contracts may include promises to transfer multiple services and products to a client.

Determining whether services and products are considered distinct performance obligations that should be accounted for separately versus together may require judgment.

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The timing of revenue recognition, billings and cash collections result in billed accounts receivables, unbilled receivables (contract assets) and customer advances and deposits (contract liabilities).

The Company’s clients are billed based on the type of arrangement.

A portion of the Company’s services are billed monthly based on hourly or daily rates.

There are also client engagements in which the Company bills a fixed amount for its services.

Our clients are billed based on the type of arrangement.

A portion of our services are billed monthly based on hourly or daily rates.

There are also client engagements in which we bill a fixed amount for our services.

This may be one single amount covering the whole engagement or several amounts for various phases, functions or milestones.

Generally, billing occurs subsequent to revenue recognition, resulting in contract assets.

However, the Company sometimes receives advances or deposits before revenue is recognized, resulting in contract liabilities.

However, we sometimes receive advances or deposits before revenue is recognized, resulting in contract liabilities.

Contract assets and liabilities are generally reported in the current assets and current liabilities sections of the consolidated balance sheet, at the end of each reporting period, based on the timing of the satisfaction of the related performance obligation(s).

For multi-year contract sales with annual invoicing, the Company performs a significant financing component calculation and recognizes the associated interest income throughout the duration of the financing period.

In addition, it reclassifies the resulting contract asset balances as current and noncurrent receivables as receipt of the consideration is conditional only on the passage of time and there are no performance risk factors present.

See the table below for a breakdown of the Company’s contract assets and contract liabilities as of the periods presented.

September 30,

For multi-year sales contracts with annual invoicing, we perform a significant financing component calculation and recognize the associated interest income throughout the duration of the financing period.

In addition, we reclassify the resulting contract asset balances as current and noncurrent receivables as receipt of the consideration is conditional only on the passage of time and there are no performance risk factors present.

See the table below for a breakdown of contract assets and contract liabilities.

Contract assets

Contract liabilities

Revenue recognized for the three and nine months ended September 30, 2025 that was included in the contract liability balance at January 1, 2025 was $ 0.6 million and $ 8.2 million, respectively, primarily representing revenue from the Company’s subscription, fixed-fee, and research contracts.

Non-current contract assets of $ 1.0 million as of March 31, 2026 and $ 1.3 million as of December 31, 2025 are included in “Other assets” on the Consolidated Balance Sheet.

Revenue recognized for the three months ended March 31, 2026 that was included in the contract liability balance at January 1, 2026 was $ 5.9 million, primarily representing revenue from the Company’s subscription, fixed-fee, and research contracts.

Remaining Performance Obligations

As of September 30, 2025, the Company had $ 111.3 million of remaining performance obligations, the majority of which are expected to be satisfied within the next twelve months.

As of March 31, 2026, the Company had $ 123.0 million of remaining performance obligations, the majority of which are expected to be satisfied within the next twelve months.

Accounts Receivable and Contract Assets

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As all amounts written off were previously fully reserved, there was no incremental impact to the income statement in such period.

As of September 30, 2025, $ 1.3 million of the reserve on the other multi-year project remains, and the Company is continuing to pursue legal action against the former client, which has resulted in a favorable judgment for ISG.

As of March 31, 2026, $ 1.3 million of the reserve on the other multi-year project remains.

The Company commenced legal action against the client in April 2024 to collect the outstanding receivables on the other multi-year project.

On September 3, 2025, the court issued its final non-appealable judgment holding the client liable to the Company for approximately $ 5.6 million, plus applicable legal interest at 5 % per annum until full payment is made.

The Company is continuing to aggressively pursue collection on this judgement against the former client through asset discovery authorized by court orders, though no assets have yet been identified to satisfy the judgement.

As collection efforts are ongoing, actual collections from the client may differ from the Company’s estimate.

It is unclear at this time if the court judgement will be satisfied by this client’s assets.

Separately, the Company is currently engaged in litigation with a client over a disputed accounts receivable balance for services rendered.

As the Company believes the balance of approximately $ 4.7 million is collectible, it has not recorded a reserve.

The Company will continue to reassess the need for a reserve in future periods.

The Company is pursuing collection of the full outstanding balance of $ 4.7 million in litigation.

As of March 31, 2026, we have not recorded material reserves against this balance.

The Company will continue to reassess ultimate collectability and the need for reserves in future periods.

NOTE 6—NET INCOME PER COMMON SHARE

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Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that would share in the net income of the Company.

For the three and nine months ended September 30, 2025, 0.1 million and 2.1 million restricted stock units, respectively, and for the three and nine months ended September 30, 2024, 1.1 million and 4.7 million restricted stock units, respectively, have not been considered in the diluted earnings per share calculation, as the effect would be anti-dilutive.

For the three months ended March 31, 2026 and March 31, 2025, 0.2 million and 1.1 million restricted stock units, respectively, have not been considered in the diluted earnings per share calculation, as the effect would be anti-dilutive.

The following table sets forth the computation of basic and diluted earnings per share:

Three Months Ended September 30,

Nine Months Ended September 30,

Net income (loss)

Three Months Ended March 31,

Weighted average common shares

Earnings (loss) per share

Net income (loss)

Earnings per share

Basic weighted average common shares

1 unchanged sentence

Diluted weighted average common shares

Diluted earnings (loss) per share

Diluted earnings per share

NOTE 7—INCOME TAXES

The Company’s effective tax rate for the three and nine months ended September 30, 2025 was 27.2 % and 33.8 %, respectively, based on pretax income of $ 4.2 million and $ 10.2 million, respectively.

The Company’s effective tax rate for the quarter ended September 30, 2025 was impacted by non-deductible expenses and earnings and losses in certain foreign jurisdictions.

The Company’s effective tax rate for the three and nine months ended September 30, 2024 was 60.2 % and 112.9 % , respectively, based on pretax income of $ 2.9 million and $ 1.6 million, respectively.

The Company’s effective tax rate for the quarter ended September 30, 2024 was impacted by non-deductible expenses and earnings and losses in certain foreign jurisdictions.

On July 4, 2025, the “One Big Beautiful Bill Act” (OBBBA) was signed into law, making significant changes to the U.S.

federal tax code.

At the date of issuance of these financial statements, the Company is currently in the process of evaluating the impacts of the legislation on its consolidated financial statements.

The Company’s effective tax rate for the three months ended March 31, 2026 and March 31, 2025 was 37.2 % and 37.9 %, respectively, based on pretax income of $ 4.3 million and $ 2.4 million, respectively.

The Company’s effective tax rate for the quarter ended March 31, 2026 was impacted by non-deductible expenses and earnings and losses in certain foreign jurisdictions.

On July 4, 2025, H.R.

1, “An Act to provide for reconciliation pursuant to title II of H.

14” (the “Act”), commonly referred to as the “One Big Beautiful Bill Act,” was enacted in the United States.

The legislation includes several changes to corporate taxation, including modifications to depreciation deductions and the limitation on interest expense deductions, as well as the reinstatement of 100% bonus depreciation for certain fixed assets acquired and placed in service after January 19, 2025.

NOTE 8—COMMITMENTS AND CONTINGENCIES

The Company is subject to contingencies which arise through the ordinary course of business.

All material liabilities of which management is aware are properly reflected in the financial statements as of September 30, 2025 and December 31, 2024.

All material liabilities of which management is aware are properly reflected in the financial statements as of March 31, 2026 and December 31, 2025.

Martino & Partners Contingent Consideration

As of September 30, 2025, the Company has recorded a liability of EUR 0.4 million (USD 0.5 million) representing the estimated fair value of contingent consideration related to the acquisition of Martino & Partners, which was classified as non-current and included in other liabilities on the consolidated balance sheet.

Ventana Research Contingent Consideration

On October 31, 2023, a subsidiary of the Company executed an Asset Purchase Agreement with Ventana Research, Inc.

(“Ventana Research”) and consummated the acquisition of substantially all assets, and assumed certain liabilities, of Ventana Research.

The purchase price comprised of $ 1.0 million of cash consideration paid at closing.

Ventana Research will also have the right to receive additional consideration paid via earn-out payments, if certain financial targets are met.

As of September 30, 2025, the Company has recorded a liability of $ 0.7 million representing the estimated fair value of contingent consideration related to the acquisition of Ventana Research, which is classified as current and included in “Accrued expenses and other current liabilities” on the condensed consolidated balance sheet.

Change 4 Growth Contingent Consideration

On October 31, 2022, a subsidiary of the Company executed an Asset Purchase Agreement with Change 4 Growth, LLC (“Change 4 Growth”) and consummated the acquisition of substantially all the assets, and assumed certain liabilities, of Change 4 Growth.

The purchase price was comprised of $ 3.8 million of cash consideration, $ 0.6 million of shares of ISG common stock issued promptly after closing and Change 4 Growth also had the right to receive additional consideration paid via earn-out payments, if certain financial targets were met.

The Company paid $ 0.5 million in cash consideration in April 2025, which was related to 2024 performance.

The Company no longer has a related liability as of September 30, 2025.

As of March 31, 2026, the Company has recorded a liability of EUR 0.3 million (USD 0.4 million) representing the estimated fair value of contingent consideration related to the acquisition of Martino & Partners, which was classified as non-current and included in other liabilities on the consolidated balance sheet.

Legal Reserves

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Three Months Ended

Nine Months Ended

September 30,

The segregation of revenues by geographic region is based upon the location of the legal entity performing the services.

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Three Months Ended

Nine Months Ended

September 30,

Compensation expense

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Interest expense

Gain on the sale of business

Foreign currency translation

Income tax provision

Net income (loss)

(1) Other segment expenses include communication, occupancy, marketing, stock-based compensation, acquisition and disposition and other overhead expenses.

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The applicable margin is adjusted quarterly based upon the Company’s consolidated leverage ratio.

For the first three months of 2025, the applicable margin was decreased by 0.25 % percentage of the revolving loans maintaining a Base Rate loans of 1.75 % for the revolving loans maintained as Term SOFR loans.

During the fourth quarter of 2025, the applicable margin was decreased by 0.25 percentage of the revolving loans maintaining a Base Rate loans of 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.

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● 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 September 30, 2025 and December 31, 2024, which are carried at amortized cost.

The Company’s financial statements include outstanding borrowings of $ 59.2 million at both March 31, 2026 and December 31, 2025, 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 September 30, 2025 and December 31, 2024, respectively.

The fair value of the Company’s outstanding borrowings was approximately $ 59.5 million at both March 31, 2026 and December 31, 2025.

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 5.8 % and 6.4 % as of September 30, 2025 and December 31, 2024, respectively.

The incremental borrowing rate used to discount future cash flows was 5.3 % at both March 31, 2026 and December 31, 2025, respectively.

During the nine months ended September 30, 2025, the Company borrowed $ 5.0 million and subsequently repaid $ 5.0 million of the revolver loan.

In the first quarter of 2026, the Company borrowed $ 20.0 million and subsequently repaid $ 20.0 million of the outstanding balance on its revolving credit facility .

The Company is currently in compliance with its financial covenants.

NOTE 11—LEASES

The Company recognizes lease payments in the Consolidated Statements of Income and Comprehensive Income on a straight-line basis over the lease term.

As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of the lease payments.

The Company leases its office space and office equipment under long-term operating lease agreements that expire at various dates through November 2036, some of which include options to extend the leases for up to 5 years , and some of which included options to terminate the leases within one year .

Under the operating leases, the Company pays certain operating expenses relating to the office equipment and leased property.

In April 2025, the Company entered into a new operating eleven-year lease for approximately 17,500 square feet of office space in Stamford, Connecticut and includes annual base rent of $ 0.9 million, subject to annual escalation of 2 % with an option to terminate the lease effective on the seventh anniversary of the rent commencement date.

The lease commencement date was September 29, 2025, and the rent commencement date is expected to be December 2026.

The following table summarizes the balance sheet amounts related to the new lease as of September 30, 2025:

(In thousands, except lease term and discount rate)

September 30,

Operating lease

Operating lease right-of-use asset

Current operating lease liability

Non-current operating lease liability

Total operating lease liability

Remaining lease term (in years)

Operating lease

Discount rate

Operating lease

NOTE 11—SUBSEQUENT EVENTS

On October 31, 2025 , the Company’s Board of Directors (the “Board”) approved a fourth-quarter dividend of $ 0.045 per share, payable December 19, 2025 , to shareholders of record as of December 5, 2025 .

On May 5, 2026 , the Company’s Board of Directors (the “Board”) approved a second-quarter dividend of $ 0.045 per share, payable June 26, 2026 , to shareholders of record as of June 5, 2026 .

The dividends are accounted for as a decrease to Stockholders’ Equity.

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements