Q3 2025 Information Services Group Inc Earnings Call Transcript
Key Points
- The As-a-Service market, including Infrastructure and Software as a Service, was up nearly 30% year-to-date, driven by cloud-first platforms and AI-related infrastructure deals.
- The Americas showed strong performance in Managed Services, up 15% year-to-date, particularly in financial services, IPO, and engineering.
- Deal activity is rebounding, with strength in both smaller deals and mega deals, indicating a return of discretionary spending.
- AI adoption is accelerating, leading to efficiency gains of over 30% in software engineering and customer support.
- The SaaS segment generated $4.8 billion in ACV, up 18% year-over-year, marking the fourth straight quarter of double-digit gains.
- Managed Services growth was sluggish globally, with the global services market essentially flat due to delayed decision-making in Europe and Asia.
- The BPO segment saw a 16% year-on-year decline in ACV, with no single quarter of growth in 2025 compared to 2024.
- EMEA Managed Services ACV was down 25% year-over-year, with significant declines in major regions like France and the U.K.
- The H-1B policy changes are expected to add cost and complexity to sourcing, potentially impacting margins and growth.
- Retail and CPG sectors showed significant weakness, with retail having its lowest ACV results since 2022, down nearly 40%.
Hi, everyone, and welcome to the third-quarter 2025 ISG Index Call. My name is Stanton Jones, and with me today is Steve Hall, Partner and President, ISG EMEA; Namratha Dharshan, Chief Business Leader for ISG India; and Mark Smith, ISG Chief Software Analyst. This is our 92nd consecutive ISG Index Call. So for those of you that have been joining us for many years, thank you for investing some of your time with ISG today.
And for those of you that may be on your first Index call, just some quick background, the ISG Index measures the overall health and growth of the technology industry which includes both Managed Technology Services and Cloud-based Software and Infrastructure Services. And we do this by tracking and analyzing annual contract value or ACV as a leading indicator of where revenues are likely to be in the future. So just think of ACV as bookings.
Okay. So with that, Steve, I'll turn it over to you to kick us off.
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