Information Services Group, Inc. · NASDAQ:III
Information Services — Q4 2024 Earnings Presentation
26 slides from Information Services's earnings presentation, Jan 16, 2025
Slide 1: IT & Business Services Industry Update 4Q 2024
IT & Business Services Industry Update January 16, 2025 4Q 2024 HOSTED BY Bryan Bergin Managing Director TD Cowen © 2025 Information Services Group, Inc. All Rights Reserved. Proprietary and Confidential. No part of this document may be reproduced in any form or by any electronic or mechanical means
Slide 2: Market Level Set
Market Level Set Managed Services annual contract value was flat in 2024. Megadeal activity remains robust, while small-deal activity rebounds. BFSI spending in the U.S. is recovering, while EMEA continues to lag. Cost optimization continues to fund AI transformations. Forecasting stronger growth in
Slide 3: Global Broader Market
Global Broader Market ACV $B Quarterly Trends 26.6 28.2 23.5 Combined Market surpassed $28B for the first time ever in 4Q24, up 20% Y/Y 15.8 17.7 10.2 10.8 10.5 13.3 16th time in the past 18 quarters that Managed Services has been up Y/Y 4Q 3Q 4Q 4Q 3Q 4Q 4Q 3Q 4Q 23 24 24 23 24 24 23 24 24 10 megad
Slide 4: Managed Services ITO Results
Managed Services ITO Results Full-Year Trends ACV $B 2023 Full Year 2024 Full Year ITO ACV edged up 0.3% Stand-alone 18.5 ADM fell 8% versus 2023 due to tough ADM -8% 30.6 30.6 comps and slowdown in discretionary 27.9 spending; number of ADM awards was down 4% ADM Bundled 4.0 8% 0.3% w/Infra Deals b
Slide 5: Managed Services BPO Results
Managed Services BPO Results Full-Year Trends ACV $B 2023 Full Year 2024 Full Year BPO ACV up nearly 6% Asia surpassed $1B in BPO ACV for the Industry-Specific 3% 2.7 first time; EMEA also rose 4% 11.9 10.4 11.0 Industry-specific BPO segment rose 3%, with all gains provided by Asia ER&D 36% 3.1 ER&D
Slide 6: Managed Services Deal Size Trends
Managed Services Deal Size Trends No. Mega Awards, 2015 - 2024 No. Awards Between $5M - $9M ACV, 2023 - 2024 40 69 mega awards 440 Small-award activity 35 over last 24 months up 14% Y/Y 420 30 400 25 20 380 15 360 10 340 5 320 0 300 2015 '16 '17 '18 '19 '20 '21 '22 '23 2024 1Q23 2Q23 3Q23 4Q23 1Q24
Slide 7: Managed Services Scope & Duration Trends
Managed Services Scope & Duration Trends New vs. Extension & Renewal ACV, 2015 - 2024 Award Durations by Award Size ACV, 2023 - 2024 $50 New scope ACV up 6 6% Y/Y 2024 award durations up $40 5 across every award size 4 $30 Years 3 $20 2 $10 1 $0 0 2015 '16 '17 '18 '19 '20 '21 '22 '23 2024 $5 - $9M $
Slide 8: Managed Services Regional Results
Managed Services Regional Results ACV $B Quarterly Trends 5.5 5.7 5.1 4.9 Americas: ACV rose slightly, by 3%, and had 3.9 3.7 eight megadeals awarded in 4Q24, the most 0.9 0.8 1.1 since 1Q06 4Q 3Q 4Q 4Q 3Q 4Q 4Q 3Q 4Q EMEA: ACV fell 5% Y/Y, driven by lack of 23 24 24 23 24 24 23 24 24 large transact
Slide 9: Industry Verticals
Industry Verticals Consumer Travel, Full-Year Business Packaged Goods Financial Healthcare Telecom Transport Trends Services & Retail Energy Services & Pharma Manufacturing & Media Leisure Combined Market 24% 15% 5% 4% -7% 15% 10% 34% Managed Services 11% -2% Flat -6% -33% 13% -2% 50%+ As-a-Service
Slide 10: IaaS Results
IaaS Results Key Trends IaaS ACV Growth Rates, 2019 - 2024 In 2024, the IaaS market Total IaaS Big 3 Hyperscalers generated all-time high ACV levels 50% IaaS rose 25% versus 2023; 40% complete turnaround from the 30% 18% annual decline in 2023 20% Growth was broad-based across 10% all three regions
Slide 11: SaaS Results
SaaS Results Key Trends SaaS ACV Growth Rates, 1Q23-4Q24 SaaS generated $15.8B in ACV, with Total SaaS Top 10 SaaS Providers EMEA and Asia responsible for moderate uptick in growth 40% Annual growth of 4.6% represented a 30% turnaround from 8.6% decline in 2023 20% Top 10 firms benefited from consol
Slide 12: Global Service & Technology Provider Standouts
Global Service & Technology Provider Standouts THE ISG 15 Our ISG Contract KnowledgeBase is used to determine The Big 15 placements based on the annual value of commercial contracts awarded in the past 12 months The Building 15 The Breakthrough 15 The Booming 15 4Q24 © 2025 Information Services Grou
Slide 13: Service & Technology Provider Standouts – Global
Service & Technology Provider Standouts – Global The ISG Contract KnowledgeBase is used to determine placements based on the annual value of commercial contracts awarded in the past 12 months. The Big 15 The Building 15 The Breakthrough 15 The Booming 15 Revenues > $10B Revenues $3B-$10B Revenues $1
Slide 14: Technology Spend Allocations
Technology Spend Allocations Key Trends AI Initiatives 5.7% Overall, budgets for 2025 are IT Security Solutions and Services 4.2% increasing 1.8% from 2024 IT Applications (including SaaS) 3.5% Customer Experience Initiatives 2.9% Categories representing PaaS/IaaS 2.6% headcount and capacity are Dig
Slide 15: Changes to the Services Ecosystem
Changes to the Services Ecosystem Key Trends Each enterprise contracts with an average of 56 services providers Around half of spend with providers is concentrated in the largest 5 providers in a given enterprise's ecosystem Concentrating growth with the largest and smallest providers puts pressure
Slide 16: Summary and Outlook
Summary and Outlook Summary Market Outlook Managed Services Macro Recap ⚫ 2024 ACV grew much slower compared to previous two years ⚫ AI theme continues to gain momentum, setting the stage for ⚫ Megadeals surged in final three quarters of 2024 widespread adoption across the enterprise ⚫ Asia and EMEA
Slide 17: Thank you!
The 89 Quarterly th Thank you! © 2025 Information Services Group, Inc. All Rights Reserved.
Slide 18: Index Insider Weekly Briefing
Index Insider Weekly Briefing Subscribe to the ISG Index Insider to stay on top of what's important in the IT & Stanton Jones Alex Bakker business services industry. Delivered to your inbox every Friday from the ISG Market Lens Team. Michael Dornan Sunder Sarangan https://isg-one.com/research/isg-in
Slide 19: Appendix
Appendix © 2025 Information Services Group, Inc. All Rights Reserved.
Slide 20: Americas Broader Market Results
Americas Broader Market Results ACV $B Quarterly Trends Combined Market surpassed $14B 14.4 11.9 13.1 for the second time ever 8.0 8.7 5.5 5.1 5.7 6.4 Managed Services rose slightly, by 3% 4Q 3Q 4Q 4Q 3Q 4Q 4Q 3Q 4Q 23 24 24 23 24 24 23 24 24 Eight megadeals awarded in 4Q24; the most since 1Q06 XaaS
Slide 21: Service & Technology Provider Standouts – Americas
Service & Technology Provider Standouts – Americas The ISG Contract KnowledgeBase is used to determine placements based on the annual value of commercial contracts awarded in the past 12 months. The Big 15 The Building 15 The Breakthrough 15 The Booming 15 Revenues > $10B Revenues $3B-$10B Revenues
Slide 22: EMEA Broader Market Results
EMEA Broader Market Results ACV $B Quarterly Trends Combined Market rose Y/Y for 9.0 8.3 7.1 fourth consecutive quarter, 4.9 4.1 4.6 averaging 14% during that time 3.9 3.7 3.2 frame 4Q 3Q 4Q 4Q 3Q 4Q 4Q 3Q 4Q 23 24 24 23 24 24 23 24 24 Managed Services declined 5% Y/Y, driven by lack of large transa
Slide 23: Service & Technology Provider Standouts – EMEA
Service & Technology Provider Standouts – EMEA The ISG Contract KnowledgeBase is used to determine placements based on the annual value of commercial contracts awarded in the past 12 months. The Big 15 The Building 15 The Breakthrough 15 The Booming 15 Revenues > $10B Revenues $3B-$10B Revenues $1B-
Slide 24: Asia-Pacific Broader Market Results
Asia-Pacific Broader Market Results ACV $B Quarterly Trends 5.5 Combined Market surpassed $5B for 4.5 4.6 4.3 the second time 3.6 3.8 0.9 0.8 1.1 Managed Services ACV of $1.1B represented the third quarter of 4Q 3Q 4Q 4Q 3Q 4Q 4Q 3Q 4Q 23 24 24 23 24 24 23 24 24 2024 to exceed $1B+ Growth driven by
Slide 25: Service & Technology Provider Standouts – Asia-Pacific
Service & Technology Provider Standouts – Asia-Pacific The ISG Contract KnowledgeBase is used to determine placements based on the annual value of commercial contracts awarded in the past 12 months. The Big 15 The Building 15 The Breakthrough 15 The Booming 15 Revenues > $10B Revenues $3B-$10B Reven
Slide 26: isg-one.com
ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 900 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service
Information Services Group — Q4 2024 Earnings Presentation on 6ix