What changed in this filing

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Item 1. Financial Statements

2026-08-06 compared with 2026-05-08 · 92 added, 64 removed, 300 unchanged (34% of the section changed)

30 unchanged sentences

100,000 shares authorized;

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

49,707 shares issued and 48,368 outstanding at June 30, 2026 and 49,707 shares issued and 47,774 outstanding at December 31, 2025

Additional paid-in capital

9 unchanged sentences

Three Months Ended

Six Months Ended

Operating expenses

5 unchanged sentences

Interest expense

Foreign currency transaction gain

Foreign currency transaction gain (loss)

Income before taxes

3 unchanged sentences

Comprehensive income:

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

Foreign currency translation (loss) gain, net of tax (benefit) expense of $( 107 ), $ 322 , $( 188 ) and $ 448 , respectively

Comprehensive income

5 unchanged sentences

Stockholders’

Balance December 31, 2025

Balance March 31, 2026

Other comprehensive loss

5 unchanged sentences

Stock-based compensation

Balance June 30, 2026

Comprehensive

Stockholders’

Balance December 31, 2025

Other comprehensive loss

Treasury shares repurchased

Proceeds from issuance of ESPP shares

Issuance of treasury shares for RSUs vested

Accrued dividends on unvested shares

Cash dividends paid to shareholders ($ 0.09 per share)

Stock-based compensation

Balance June 30, 2026

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

Comprehensive

Stockholders’

Balance March 31, 2025

Other comprehensive income

Treasury shares repurchased

Proceeds from issuance of ESPP shares

Issuance of treasury shares for RSUs vested

Accrued dividends on unvested shares

Cash dividends paid to shareholders ($ 0.045 per share)

Stock-based compensation

Balance June 30, 2025

Comprehensive

4 unchanged sentences

Proceeds from issuance of ESPP shares

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

Issuance of treasury shares for RSUs vested

Accrued dividends on unvested shares

1 unchanged sentence

Stock-based compensation

Balance March 31, 2025

Balance June 30, 2025

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

2 unchanged sentences

(In thousands)

Three Months Ended

Six Months Ended

Cash flows from operating activities

14 unchanged sentences

Accrued expenses and other liabilities

Net cash (used in) provided by operating activities

Net cash provided by operating activities

Cash flows from investing activities

7 unchanged sentences

Payments related to tax withholding for stock-based compensation

Payment of contingent consideration

Cash dividends paid to shareholders

2 unchanged sentences

Effect of exchange rate changes on cash

Net decrease in cash, cash equivalents, and restricted cash

Net (decrease) increase in cash, cash equivalents, and restricted cash

Cash, cash equivalents, and restricted cash, beginning of period

4 unchanged sentences

Non-cash investing and financing activities:

Issuance of treasury stock for vested restricted stock units

Issuance of treasury stock for vested RSUs

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

12 unchanged sentences

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 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.

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 June 30, 2026, the results of operations for the three and six months ended June 30, 2026 and 2025 and the cash flows for the six months ended June 30, 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 months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026.

Operating results for the three and six months ended June 30, 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”).

10 unchanged sentences

Numerous internal and external factors can affect estimates.

Estimates are also used for but are not limited to allowance for credit losses, useful lives of furniture, fixtures and equipment and definite lived intangible assets, depreciation expense, fair value assumptions in evaluating goodwill for impairment, income taxes and deferred tax asset valuation and the valuation of stock-based compensation.

Estimates are also used for, but are not limited to, the allowance for credit losses, useful lives of furniture, fixtures and equipment and definite-lived intangible assets, depreciation expense, fair value assumptions in evaluating goodwill for impairment, income taxes and deferred tax asset valuation and the valuation of stock-based compensation.

Restricted Cash

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 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.

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 June 30, 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 of goodwill, intangible assets and other long-lived assets and assets acquired and liabilities assumed in a business combination.

Fair value is the price that would be received upon a sale of an asset or paid upon a transfer of a liability in an orderly transaction between market participants at the measurement date (exit price).

5 unchanged sentences

● Level 2 measurements include quoted market prices for identical assets or liabilities in an active market that have been adjusted for items such as effects of restrictions for transferability and those that are not quoted but are observable through corroboration with observable market data, including quoted market prices for similar assets;

● Level 3 measurements include those that are unobservable and of a highly subjective measure.

● Level 3 measurements include unobservable inputs that involve a high degree of subjective measure.

The following tables summarize the assets and liabilities (as applicable) measured at fair value on a recurring basis at the dates indicated:

Basis of Fair Value Measurements

March 31, 2026

June 30, 2026

Cash equivalents

4 unchanged sentences

Contingent consideration (1)

(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

(1) As of June 30, 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 six months ended June 30, 2026:

Six Months Ended

Beginning Balance

1 unchanged sentence

Ending Balance

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

The fair value of the Company’s outstanding borrowings was approximately $ 59.5 million at both June 30, 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 5.3 % at both March 31, 2026 and December 31, 2025, respectively.

The incremental borrowing rate used to discount future cash flows was 5.3 % at both June 30, 2026 and December 31, 2025.

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.

During the six months ended June 30, 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.

21 unchanged sentences

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

(“Martino & Partners”), a strategic advisory firm serving public and private sectors clients in Italy, for total consideration of EUR 2.0 million (USD 2.3 million) in cash paid at closing;

(“Martino & Partners”), a strategic advisory firm serving public and private sector clients in Italy, for total consideration of EUR 2.0 million (USD 2.3 million) in cash paid at closing;

USD 250,000 worth of shares of ISG’s common stock, issued promptly following the closing;

11 unchanged sentences

Net assets acquired

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 were immaterial.

The primary factors that drove the goodwill recognized, the majority of which is deductible for tax purposes, were the inclusion of the 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 our consolidated statements 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:

17 unchanged sentences

Contract Balances

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

Our clients are billed based on the type of arrangement.

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

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

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

2 unchanged sentences

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).

Contract assets and liabilities are generally reported in the current assets and current liabilities sections of our 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 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.

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

Contract assets

Contract liabilities

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.

Non-current contract assets of $ 0.5 million as of June 30, 2026 and $ 1.3 million as of December 31, 2025 are included in “Other assets” on our consolidated balance sheet.

Revenue recognized for the three and six months ended June 30, 2026 that was included in the contract liability balance at January 1, 2026 was $ 2.6 million and $ 8.6 million, respectively, primarily representing revenue from the Company’s subscription, fixed-fee, and research contracts.

Remaining Performance Obligations

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.

As of June 30, 2026, the Company had $ 121.4 million of remaining performance obligations, the majority of which are expected to be satisfied within the next twelve months.

Accounts Receivable and Contract Assets

During the fourth quarter of 2023, a client that had engaged the Company for two multi-year projects, which previously commenced in 2021 and 2022, respectively, failed to make payments as per the contracted payment schedule.

As a result, the Company ceased performing services under the agreements.

During the fourth quarter of 2023, a client that had engaged the Company for two multi-year projects commencing in 2021 and 2022, respectively, failed to make payments in accordance with the contracted schedule.

As a result, the Company ceased performing services under the agreement.

After unsuccessful negotiations, the Company provided the client with notice that it would be terminating the respective projects.

Accordingly, during the fourth quarter of 2023, the Company recorded through bad debt expense an allowance for doubtful accounts reserve of $ 4.9 million associated with this client.

The specific reserve recorded as of December 31, 2024 represented management’s best estimate of the probable amount of collection related to the outstanding amounts under these agreements.

During the three months ended June 30, 2025, after exhausting all collection efforts on one of the projects, the Company wrote-off $ 3.6 million of the outstanding amounts against the previously established reserve.

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

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.

The specific reserve recorded as of December 31, 2024 represented management’s best estimate of the probable amount of non-collection on the outstanding receivables under these agreements.

During the three months ended June 30, 2025, after exhausting all collection efforts on the first of the two multi-year projects, the Company wrote off $ 3.6 million of outstanding receivables against the previously established reserve.

As all amounts written off were previously fully reserved, there was no incremental impact to our consolidated statements of income and comprehensive income for that period.

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

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

The Company subsequently commenced aggressive collection efforts.

After exhausting all collection efforts on the judgment, including through asset discovery authorized by court orders, the Company fully wrote off the remaining outstanding accounts receivable balance of $ 5.6 million during the quarter ended June 30, 2026.

As such, the Company recorded an additional $ 4.3 million of bad debt expense in selling, general and administrative expenses.

Concurrently, the Company wrote off $ 4.3 million of the remaining accrued subcontractor costs directly related to this project.

This reversal was recorded in direct costs and expenses for advisors, where it had originally been recorded.

Under the subcontractor agreement related to this project, amounts owed to the subcontractor are not payable unless and until the related receivables are collected from the client.

These write-offs offset, and thus have no net impact on the Company's results of operations for the period ended June 30, 2026.

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

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.

As of June 30, 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.

2 unchanged sentences

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 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.

For the three and six months ended June 30, 2026, 1.0 million and 1.2 million RSUs, respectively, and for the three and six months ended June 30, 2025, 0.8 million and 1.9 million RSUs, 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 March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Weighted average common shares

5 unchanged sentences

NOTE 7—INCOME TAXES

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.

The Company’s effective tax rate for both the three and six months ended June 30, 2026 was 37.1 %, based on pretax income of $ 5.2 million and $ 9.6 million, respectively.

The Company’s effective tax rate for the three and six months ended June 30, 2025 was 38.7 % and 38.4 %, respectively, based on pretax income of $ 3.6 million and $ 6.0 million, respectively.

The Company’s effective tax rate for both quarters ended June 30, 2026 and June 30, 2025 was impacted by non-deductible expenses and earnings and losses in certain foreign jurisdictions.

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 March 31, 2026 and December 31, 2025.

All material liabilities of which management is aware are properly reflected in the financial statements as of June 30, 2026 and December 31, 2025.

Martino & Partners Contingent Consideration

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.

As of June 30, 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 our consolidated balance sheet.

Legal Reserves

7 unchanged sentences

The Company operates principally in the Americas, Europe and Asia Pacific.

The Company’s Chief Operating Decision Maker (the “CODM”) is our Chairman & Chief Executive Officer, Michael Connors.

The CODM uses net income as presented on our Consolidated Statement of Income and Comprehensive Income in evaluating performance and determining how to allocate resources of the Company as a whole.

The Company’s Chief Operating Decision Maker (the “CODM”) is our Chairman of the Board of Directors (the “Board”) and Chief Executive Officer, Michael Connors.

The CODM uses net income as presented on our consolidated statements of income and comprehensive income in evaluating performance and determining how to allocate resources of the Company as a whole.

Geographical revenue information for the segment is as follows:

Three Months Ended

Six Months Ended

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

2 unchanged sentences

Three Months Ended

Six Months Ended

Compensation expense

9 unchanged sentences

Interest expense

Foreign currency translation

Foreign currency transaction (gain) loss

Income tax provision

13 unchanged sentences

● 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 March 31, 2026 and December 31, 2025, which are carried at amortized cost.

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

The fair value of the Company’s outstanding borrowings was approximately $ 59.5 million at both June 30, 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 5.3 % at both March 31, 2026 and December 31, 2025, respectively.

The incremental borrowing rate used to discount future cash flows was 5.3 % at both June 30, 2026 and December 31, 2025.

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 .

During the six months ended June 30, 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—SUBSEQUENT EVENTS

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 .

On August 4, 2026 , the Company’s Board approved (1) a new share repurchase authorization for an additional $ 30.0 million and (2) a third-quarter dividend of $ 0.045 per share, payable September 25, 2026 , to shareholders of record as of September 4, 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