ISG Q2 2025 revenue jumps 7%, expands in Europe with Martino & Partners
CONNECTICUT, UNITED STATES — Information Services Group (ISG) reported strong second-quarter earnings, with revenues rising 7% year-over-year, excluding divested automation units, to $62 million, surpassing guidance.
The company has an AI consultancy arm, and through expanding its presence further in Europe, it has acquired Italy-based Martino & Partners.
Strong financial performance driven by AI and cost optimization
Earnings before interest, taxes, depreciation, and amortization (EBITDA) increased by 17% to 8.3 million, and operating cash flow recorded 12 million, a great change in comparison with the previous year, which was 2.2 million.
The company links this development to its AI-focused approach and the necessity of cost-optimization services in unpredictable markets.
Chief Executive Officer (CEO) Michael Connors noted that companies are cautious about technology spending, but they are emphasizing the modernization of AI, which will be a positive factor for ISG.
Greater Americas was the first to report a 16% rise in revenues, with a small dip in Europe and Asia Pacific. ISG margin remains under pressure, but with adjusted EBITDA margins improving by 241 basis points in the quarter, the emphasis on high-margin AI advisory services is proving a good strategy.
“For the first half of 2025, adjusted EBITDA was nearly $16 million, up 36 percent from the prior year, and our adjusted EBITDA margin was up nearly 400 basis points, reflecting our improved global business mix and strong execution of our business strategy,” Connors explained.
Italy expansion with Martino & Partners acquisition
ISG has agreed to acquire Milan-based Martino & Partners, a strategic advisory firm serving public and private sector clients in Italy.
The deal, expected to close in September, will bolster ISG’s presence in northern Italy and add over 20 new clients, including municipal entities. The move aligns with European Union-funded tech modernization programs and growing AI investments in the region.
Italy is a growing market that has seen increased growth, and it is a country highlighted by Connors. The purchase will diversify the European operations of ISG.
The company also hopes to capitalize on Italy’s use of AI and infrastructure modernization, which will further expand its customer base beyond the central government’s contracts. This is part of the general strategy of ISG to develop markets with high potential by making specific acquisitions.
ISG’s Q3 2025 guidance: Positive outlook continues
ISG has given revenue guidance for quarter three to be between $60.5 million and $61.5 million with an adjusted EBITDA of $7.5 million to $8.5 million.
The company has remained optimistic despite the economic turbulence, particularly in the macroeconomy, citing growing demand for its AI and digital transformation services. The closely observed indicators, according to Connors, are tariffs, FX fluctuations, and inflation.
The business was also repurchasing its shares to the tune of $4 million in Quarter 2, reflecting its solid financial status.
ISG finds itself in the right position with a large cash balance of $25.2 million, an increase of 25% quarter-over-quarter, to sustain growth and add to strategic investments.
“These trends are right in ISG’s sweet spot. Our AI-centered positioning, investment in expanded AI capabilities, and long-term focus on operational excellence continue to resonate with our client base. We are well-positioned for success,” Connors said.
