Good morning, and welcome everyone to the Information Services Group second 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. Will Thorndike for opening remarks and introductions. Mr. Thorndike, please go ahead. Thank you, operator. Hello, good morning. My name is Will Thorndike. I am head of corporate communications for ISG. I'd like to welcome everyone to ISG's second 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 Factor 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 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 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. For 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. 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. Today, we will discuss our strong Q2 results, how AI is creating new opportunities across our business, the expansion of our share buyback program, and our outlook for Q3. ISG had a strong second quarter and an excellent first half. Our Q2 results, both revenue and EBITDA, were above our expectations. The underpinning of our success is how closely aligned our strategy is with the priorities of today's enterprise leaders. Organizations continue to focus on improving performance, reducing costs, modernizing operations, and adopting AI responsibly. ISG is uniquely positioned at the intersection of these priorities, and that's demonstrated by our broad-based growth, increasing recurring revenue, expanding margins, larger longer-term engagements, and deeper relationships with our clients. Our revenue was $65.5 million, up more than 6%, led by 10% growth in Europe and 7% growth in the Americas. Equally important this quarter, we reached another record in recurring revenues, $30 million, up 7%, powered by our research and governance businesses. In terms of profits, Q2 marks the seventh quarter in a row our adjusted EBITDA has grown by double digits. For the latest quarter, it was up 13% to $9.4 million, while our adjusted EBITDA margin rose more than 80 basis points to 14.3%. Both revenue and EBITDA this quarter were our best results since 2023. In addition to disciplined cost management, our expanding margins reflect the continued evolution of our business toward higher-value advisory work, growth in recurring revenues, and increasing leverage from AI-enabled delivery. AI is a tailwind for ISG, and we are taking advantage of it, reshaping our business as an AI-centered technology research and advisory firm to drive stronger client demand and improve how we deliver our own services. In the second quarter, our AI-related revenue grew 64% to $26 million, with growth spread across our AI advisory, research, and governance. For the first half, AI revenue increased to $47 million and represented 37% of firm-wide revenue. For ISG, AI is not an aspiration. It is delivering results right now. Our AI revenues reflect more than growing interest in AI. They show how enterprises are increasingly turning to ISG to solve their most important business challenges, making better technology decisions, improving performance, reducing costs, modernizing systems, and managing increasingly complex environments. AI has become an integral part of each of those conversations. Nearly half of our clients generated AI-related revenue during the quarter. Growth was broad-based across industries, led by consumer, health sciences, and manufacturing. What is particularly encouraging is that AI is increasingly embedded across our research, sourcing, governance, and advisory engagements, creating larger opportunities and expanded client relationships over time. The reason this momentum is sustainable is that it reflects broader changes in enterprise priorities, not simply growing interest in AI. According to ISG research on companies globally, the top three client needs today around technology are, one, cost optimization, two, business transformation, and three, vendor and contract optimization. These priorities align exceptionally well with ISG's capabilities. Our integrated platform combines advisory services, proprietary research, and governance expertise to help clients move from strategy to execution, and increasingly, to AI-enabled business transformation. That combination is difficult to replicate and is one of the reasons we're seeing stronger growth, improving margins, and deeper client relationships. It's also a reason why we were able to increase our share buyback program by an additional $30 million, part of a disciplined capital allocation strategy that includes reinvesting in our business, returning capital to shareholders via dividends and share repurchases, and supplementing our organic growth with strategic acquisitions to drive long-term shareholder value. Expect an acceleration in buybacks during the second half. Turning to our regions. The Americas delivered $42 million of revenue in Q2, up 7% from last year and up 6% sequentially from the first quarter. The region saw double-digit growth in research and governance and in our health sciences and insurance industry verticals. Key client engagements during the second quarter included 3M, Suntory, and the Commonwealth of Pennsylvania. During the quarter, we continued to expand our relationship with a major global oil and gas company, adding $1 million of revenue to an already multimillion-dollar account. Beginning a few years ago with a benchmarking engagement, we have become a strategic partner for this client, supporting their enterprise-wide technology transformation. Our work includes revamping their service agreements and provider ecosystems and realizing greater savings through AI initiatives, including AIOps. Our latest engagement, a major application sourcing program, is expected to save this client more than $100 million. In the quarter, we won a major new engagement with a U.S.-based global manufacturer of heating, cooling, and refrigeration solutions. This million-dollar engagement, won through our private equity channel to support portfolio companies, will transform this client's technology supplier landscape, modernize their network, and strengthen provider governance. This is opening the door to a broader relationship involving the use of AI to optimize customer experience and generate further operating efficiencies. Our Europe region continued its momentum from the second half of 2025 and first quarter of 2026 with an excellent second quarter. Revenues were up 10% to $18 million, driven by double-digit growth in our advisory software and governance businesses and our consumer, banking, manufacturing, and health sciences industry verticals. Key client engagements in Europe in the second quarter included Roche, Olympus, and BNP Paribas. During the quarter, we continued to expand our relationship with a leading health insurer. We began by supporting a $1 billion sourcing program for the client's workplace and core tech services, driving cost savings for them up to 50%. We've since added transition, network security, and now governance, and are in discussions to add change management and software advisory, all leading to a growing multimillion-dollar relationship with this client. We also won new business with a leading health and pharmacy chain by leveraging existing relationships with senior management, which asked ISG to advise them on a struggling technology services contract. Based on our strategy recommendations, we were able to reset the agreement and achieve $10 million of savings this year, while significantly improving the client's sourcing model. Based on that success, we are jointly exploring other opportunities, including AI-driven process improvements to help them unlock further value. In Asia Pacific, our Q2 revenues of $5.1 million were down $400,000 compared with the prior year. We saw double-digit growth in our health sciences, energy, and utility verticals. In addition, and importantly, we saw a breakthrough in public sector spending late in the quarter, and based on this trend, we expect this region to return to growth during the back half of this year. Key clients in the quarter included Woolworths, data center company AirTrunk, and the Australian Department of Home Affairs. During the quarter, we won a significant agreement in the public sector to provide sourcing support to a government entity in Australia. Our successful negotiations with the government's telecom providers will provide net savings of more than $12 million, greatly exceeding the client's expectations. This is leading to additional engagements to design and support AI-led future workplace services and optimize the client's other existing tech services. Turning to the broader market and our guidance for Q3. Though clients remain measured in their pace of spending, they continue to focus their investments on cost optimization, business transformation, and AI adoption. As I mentioned earlier, this plays to ISG's strengths. Keeping in mind the summer months in Europe for the third quarter, we are targeting revenues of between $63.5 million and $64.5 million and adjusted EBITDA between $8.5 million and $9.5 million, which will continue our year-over-year growth and margin expansion. Let me turn the call over to Michael Sherrick, who will summarize our financial results. Michael? Thank you, Mike. Good morning, everyone. Revenue for the second quarter was $65.5 million, up a solid 6.4% year-over-year, including a $700,000 positive impact from FX. By region, Americas revenue reached $42.1 million, up 6.7%. Europe delivered revenue of $18.3 million, up 9.8%, and Asia Pacific was $5.1 million, down 6.7%. Adjusted EBITDA for the quarter climbed to $9.4 million, up 12.9% year-over-year. Adjusted EBITDA margin expanded 80 basis points to 14.3%. Operating income was $5.9 million, up 25.6% year-over-year, resulting in an operating margin of 8.9%. I would note that our operating margin is at a three-year high, fueled by solid pricing and our continued focus on cost optimization. GAAP net income was $3.3 million or $0.07 per fully diluted share, compared with $2.2 million or $0.04 per fully diluted share last year. Adjusted net income was $5 million or $0.10 per fully diluted share, up from $4.1 million or $0.08 per fully diluted share a year ago. Headcount at quarter end was 1,281, essentially flat with last quarter, while our consulting utilization remained solid at 74%. We ended the quarter with cash of $23.7 million, compared with $22.7 million at the end of the first quarter. For the quarter, net cash generated from operations was $5.2 million as compared to a $700,000 cash usage in the first quarter. We continue to expect strong operating cash flow for the remainder of the year. This week, our board of directors approved a new share repurchase authorization of $30 million, the largest such program in our history. The new share repurchase program will take effect upon completion of the firm's current program, which has approximately $2.3 million remaining as of June 30th, 2026. During the quarter, we paid dividends of $2.3 million and repurchased $1.5 million of stock. Our next quarterly dividend will be paid September 25th to shareholders of record as of September 4th. At quarter end, fully diluted shares outstanding were 49.8 million, and our gross debt to EBITDA ratio was 1.7 times, down from 1.9 times at December 31, 2025. Our average borrowing rate for the quarter was 5.3%, down 81 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. Mike will now share concluding remarks before we go to Q&A. Mike? Thank you, Michael. To summarize, we delivered a strong second quarter and first half. Both our best since 2023, with a broad-based growth across regions, service lines, and industries. We expect continued strength in the second half. We continue to improve the quality of our business with record recurring revenue, expanding margins, and deeper client relationships. Our strong performance and balance sheet allowed us to expand our share repurchase program by an additional $30 million. AI remains an important growth engine. Our overall success is driven by a diversified portfolio that helps clients improve business performance. Our strategy is delivering results today and positions ISG for continued profitable growth as enterprises accelerate their transformation. As always, we are focused on creating shareholder value for the long term, and we are steadfast in our mission to deliver operational excellence and ROI to our clients. Thank you very much for calling in this morning, and now let me turn the session over to the operator for your questions. Thank you. 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 and one 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 star one again. Again, if you'd like to ask a question, you can do so by pressing star and one on your touch-tone phone. We'll pause for a moment to allow any questions into the queue. Our first question comes from Joe Gomes from Noble Capital Markets. Please go ahead. Your line is open. Thank you. Hi, it's Jacob Mutchler on for Joe Gomes this morning. First question, could you just provide any color on what you're seeing in terms of just total enterprise technology spend with your clients and just, across the industry in general? If you could just compare today with three to six months ago. Yes. Good morning. Thank you for the questions. Well, look, what we are seeing is, first of all, there is a shift in the spending of the total budgets around technology. The shift, of course, is trying to move things from the, I'll call it the normal day-to-day or run operations into growth initiatives and especially AI to help them run their business more effectively. AI is clearly a structural growth theme, for sure. The economics around it, I think, are pretty uneven, depending on which business, which industry that you're talking about. Certainly, infrastructure and software are compounding, and labor-based work in these enterprises are facing a lot of pressure, if you will, around improving productivity around them. We see spending accelerating, certainly in AI, to be able to get AI beginning to scale their AI, in these enterprises. It is still very early innings, but the spending is there, but it is shifting. The pace in which they're making their decisions, if I think about it to your question of three to six months ago, is not much different than it was three to six months ago. It is still a measured response, but the important factor here is they are making decisions, unlike what I would characterize back in 2024 or early 2025. The money is there, the spending is there, the pace is measured, but decisioning is happening now much more so than a year ago. I hope I answered that question, Jacob. Yeah, absolutely. That addressed one of my other questions about the decision-making process, if that has sped up. Thank you for addressing that. My next question is just in regards to the AI pipeline. Could you talk about what region you're seeing the bulk of that AI business come from? Is it across the board? I know you've mentioned in the past that Europe was behind the U.S. in AI spend. Just curious if we're seeing a little bit of a catch-up here in Europe. Yeah. Good question. Definitely the U.S. leads. Europe still trails. I would say the Asia-Pacific region certainly trails that. I would say that in Europe we have seen a pickup, because AI clearly is a competitive weapon as it relates to speed, as it relates to quality, as it relates to productivity. The clientele in Europe sees it, they know it, but there's a lot of geopolitical issues in different parts of the main, I would call it main countries in Europe, call it U.K., France, Germany in particular. It is still behind the U.S., but I think the spending around AI has picked up, but not at the pace of the U.S. yet. Got you. Thank you for taking my questions today, and congratulations on a solid quarter. Thanks very much. Our next question comes from Vincent Colicchio from Barrington Research. Please go ahead. Your line is open. Good morning, Mike. Morning, Vince. I'm curious, how does your visibility compare today to, say, six to twelve months ago? Yeah, I mean, look, I think the visibility is, I would call it roughly the same, Vince. I wouldn't call it greatly improved. There's no deterioration in it. It's primarily, again, around the pacing of decisions. The good news is that our pipeline is strong. We know those decisions are going to be made. The pace in which is a little unknown. It looks pretty good. We have some very good momentum. We have some very large engagements. Our research and our governance, especially around AI governance, is really resonating with clients. It looks good but we're cautious with all of the geopolitical and other things that are going on in terms of their pace of decisioning. We're confident that decisions are being made and will be made. It just may be at a pace that we'd prefer a little faster, but it is there and we like that. I would say we're optimistic about it. Are there any large deals in your pipeline that could significantly benefit your trajectory of growth? Well, we do have a number of large ones. I can't tell you whether they come to fruition or not. If the pace happens, and it happens sooner, then we'll have a little bit of a nice jolt. I can't really project it per se, Vince, but we do have a number of large engagements that we are pursuing. How should we think about the economics of your consulting business? Clients know that AI is reducing consulting costs. Is there any pressure or talk on billing rate relief? I know that sounds contrary to what you're likely seeing right now. Hey, Vince, it's Michael. I think it's a good question. I think that for us, it's about the value provided, right? We're not seeing that pressure in terms of billing rates. I think that, again, for us, it's about number of transactions, and processing transactions. The expectation as you look forward from our perspective is that AI is driving a more rapid acceleration in people's review of their existing programs, contracts, et cetera, and that'll drive transactions, and that's good for us. We continue to see this as Mike has said, as a tailwind, and a benefit from where we sit. Thanks for all that color. Thanks, Vince. Our next question comes from Dave Storms from Stonegate Capital Partners. Please go ahead. Your line is open. Hello. Good morning. This is Maximus. I will be asking questions for Dave this morning. Morning. Good morning. To start off, recurring revenues definitely seem to stabilize this quarter. Curious to hear, would you assume this is a pretty fair run rate moving forward, or if there are any goals on growing this? Yeah. On the recurring revenue, recurring revenues were strong. We had our largest absolute number in any quarter at $30 million in the quarter. It clearly is a priority for us. It is expanding. It is driven by both our research, which is focused around clearly technology, the trends, AI, as you might imagine, and our governance services businesses, which includes AI governance. That grew at a faster rate than the overall firm, and we would expect recurring revenues to continue to grow. Our objective is to get to over 50% of our revenue to be recurring. Just to remind you, five years ago, it was half of that. We are approaching that now at around 45%, 47%. That is a continued focus, and we expect that to continue to grow for the next couple of years. Got it. Great. Thank you. That's great color. In the past few quarters, you guys had mentioned that the AI Maturity Index was more of like a door opener. Yeah. I'm curious to hear more about what typically the next service is clients would tend to purchase or contract out and how long that conversion usually takes place. Yeah. We are using the ISG AI Index, if you will, as top of the funnel. It helps. It's part of the conversation. It's part of our proposal management, if you will. You can see that with our AI-related revenues. Our AI-related revenues were $26 million in the quarter. It's significant. It was up, whatever it was, 30-some-odd percent for the quarter year-over-year. We're using a number of tools at the, if you will, the front end of our discussions. Frankly, it is a hot topic, it allows us in. We use the tools to help show them around workforce readiness, how the leaders and teams absorb AI into real work. It's one thing to develop AI capabilities. It's another to have the workforce engage and embrace. We focus on workforce readiness with them. We focus on AI economics, how can they turn productivity into credible business economics for their business. Then we talk about governance. How do you AI govern, if you will? How do you govern AI safely and visibly and at scale? By using those as our openers, if you will, it is driving our AI-related revenue, and you can see that with the robustness that we had in this quarter and really in the first half of the year, Dave. Great. Thank you. Congratulations on the quarter. That's all that I have for today. Okay. Thanks so much, Maximus Alexander-Nino. Our next question comes from Gowshihan Sriharan from Singular Research. Please go ahead. Your line is open. Good morning, gentlemen. Can you hear me? Yes. Good morning, Gowshihan. Good morning. Just following up on that AI governance work, as you were saying, is that genuinely new demand, or are you winning that from competitors or internal teams, or has that changed in a couple of quarters? As you progress it, will it change the mix of the top 10 logos or the client base that you traditionally had? The AI component of the governance is new. It's incremental. Every business is thinking about it, talking about it. I sit on a very large corporate board. It's a discussion at the board level. Everybody wants to understand how are we going to govern, how does this runaway train, whether it's the economics around tokens, whether it's the way that we use AI in a constructive and safe way in different enterprises. We see this as new white space for our firm. It gives us an opportunity to expand with our current client base as well as with new prospects. I don't know that it changes what our top 10 looks like by itself, but we do think it adds to revenue for our top clients as well. I hope that answers that, Gowshihan. Yes. Perfect. Thank you. Thank you for that, Colin. Now Martino has been in the mix for about a year now. How much of that growth is Martino, and is it tracking kind of the early earn-out targets you underwrote? Yeah. First of all, it is not material at all. It is performing well. Italy, the whole south region, all of Europe, as you can see, that was up 10% on the year. They've had a strong first half of the year, driven by, if you will, a little more demand opening up in that European theater, as someone else asked a question about Europe. We do see that opening up a bit more than it did a year ago or even six months ago. All of these are contributing factors to it, Gowshihan, but I wouldn't look at that as any materiality in the quarter. If you strip out the FX and Martino, is the underlying growth rate accelerating or is it still running on kind of low single, kind of the organic growth disaggregation? Can you give us a color on that? Yeah. I think about it as mid-single digits. Okay. On the gross margin side, I guess adjusting for the receivable write-offs, we're looking at gross margins kind of taper, flat, plateau being on its course, or was there something specific about this quarter? I think your- -thinking about gross margin. Yeah, Sorry, you were breaking up. I think your question is the overall gross margin. No, I don't think there's anything specific or different in the quarter. Some of our margin is mixed, right, in terms of the different offerings and services that we have, FDU, et cetera. I wouldn't read anything into it in the quarter. As I said in, I think, an earlier question that we got, we continue to have a very strong value proposition. As long as you continue to have that strong value proposition and can demonstrate value to the clients, then you have an ability to price, and that has not changed for us. Awesome. Thank you, guys. Congratulations. I'll take it offline. Thank you. Thanks, Gowshihan. Our last question comes from Marc Riddick from Sidoti. Please go ahead. Your line is open. Hey, good morning. Good morning, Marc. It's certainly encouraging to see the progress that you've been making here. I was wondering if you could talk a little bit about the visibility that you have currently relative to maybe a year or so ago, particularly given the strength of recurring revenues and the shift that you were discussing as far as sort of maybe a little less from a defensive to an offensive stance. How do you think that sort of plays into sort of revenue and project visibility? Well, first, Marc, I think overall the pipeline is probably as strong as it's ever been. We have clearly visibility in building pipe, and we use pipe, and we rebuild pipe. I think the recurring revenue clearly gives us visibility because that's now representing almost 50% of our business. We know that our collection of 900 clients, that we get 85% of our revenue from that client base every year, and that's kind of been 80-85 for more than a decade. That gives us some visibility in terms of who. I would say that there's really no change on visibility in terms of amounts. You don't really have the visibility to know for sure whether clients A, B, and C are going to be spending X or Y during a given quarter. We are engaged with them. We do our best, if you will, to try to provide the best guidance on what we think closes and gets recognized in any given quarter. I would say because the demand environment is good, because that we are focused on, I think, the most important things that clients are thinking about today around cost optimization, around AI adoption, and how you can scale it all fits into our portfolio of services. We have it for those that are moving at a fast pace. We have it for those that are moving slower. We are working with industries that are being disrupted, like healthcare and energy. They love our kind of portfolio of services that can help them. The healthcare industry is being turned upside down. It is our highest growing industry at the moment. Energy is not that far behind. Think about all the data centers and what is happening around that area. Utilities also. We have disruption going on in a number of industries, which gives us, if you will, insight into where we think the work and the acceleration might happen over the course of the next several quarters. That's how we think about it, Marc. Great. I wanted to shift gears to cash usage prioritization. Certainly encouraging to see the expansion of the authorization. I was wondering if you could share any thoughts, views as to the potential for acquisitions, maybe availability, valuations. What are you seeing out there? Is there anything that you think that appetite for either adding services or any particular fits that might make sense for you? Marc, we are, as you know, acquisitive. We are in the market. We are looking at capabilities that we could add to accelerate growth. We are focused around, if you will, all things digital and AI and things that we could use our channels, our distribution channels into the C-suite, that we could sell more opportunities into them and help them solve more business problems. I would say that based on what we are seeing in the market, that the value expectations are beginning to rise more so than they were a year ago. We keep an eye on that. I would call it a little bit more frothy than it was maybe if you were to ask this question a year ago. Yes, we are active. We are in the market, we also are seeing a little bit of an uptick, if you will, on expectation levels on the sell side. Got you. That makes sense. Well, just last thing for me, I guess. The regional commentary is certainly appreciated. I was wondering if you could maybe talk a little bit about if you're seeing differentiation of catalysts in Europe, particularly Europe versus the Americas right now. Where I'm going with this is, we've certainly seen a lot of M&A lately. I was sort of curious as to maybe some of the catalysts and drivers, if you're seeing much differentiation regionally. Yeah. It's a good question. Well, specifically in Europe, I think consumer, pharma, and M&A are all very active right now. More so than they were six, nine months ago. What that does, clearly consumer is more on the cost optimization side, but also using AI to assist with that. Pharma is not too far behind that. We see a lot of overall in the health sciences area, different than the payer and provider community in the U.S., so it's a little different. The pharmaceutical companies in particular are very active. We are seeing M&A picking up in the region. That means both on a diligence standpoint and on a portfolio, I'll call it cleanup, to prepare them for a sale has increased. Those are three, if you will, drivers that we have been seeing over in Europe. That's a little bit different than maybe here in the U.S., where we see the healthcare side, the energy side, the utility side being bigger drivers than maybe what we see in Europe at the moment. That makes sense. Thank you so much, Mike. Yep. Thanks, Marc. I'm showing no further questions. I'll turn the call back to Michael Connors for his closing remarks. Well, look, in closing, ISG is winning because enterprise clients are prioritizing performance, not just technology. AI is accelerating that trend, with our success built on a diversified platform of advisory, research, and governance capabilities that solve the business problem clients care about most. None of this is possible, of course, without the dedication of our professionals worldwide, and I want to thank them for their contributions to our success. Our people are passionate about helping our clients solve their most important business challenges. That commitment to client success continues to strengthen our business and deepen our relationships and creates long-term value for you, our shareholders. Thanks to all of you for joining us 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.