Information Services Group (III) risk factors, FY2025 10-K

Risks Related to Outstanding Debt

1. 01we may not have sufficient liquidity to respond to business opportunities, competitive developments and adverse economic conditions; and
2. 02our results of operations will be adversely affected if interest rates increase because, based on our current outstanding borrowings in the amount of $59.2 million as of December 31, 2025, a 1% increase in interest rates would result in a pre-tax impact on earnings of approximately $0.6 million per year
3. 03Our failure to comply with the covenants in our credit agreement could materially and adversely affect our financial condition and liquidity
4. 04Our variable rate indebtedness subjects us to interest rate risk, which could cause our annual debt service obligations to increase significantly

Risks Related to Acquisitions and Dispositions

1. 05We have risks associated with acquisitions or investments28% rewritten
2. 06Difficulties in integrating businesses we have acquired, or may acquire in the future, may demand time and attention from our senior management
3. 07We have risks associated with dispositions
4. 08Our operating results have in the past been, and may in the future be, adversely affected by worldwide economic conditions and credit tightening
5. 09The rate of growth in the broadly defined business information services and advisory sector and/or the use of technology in business may fall significantly below the levels that we currently anticipate
6. 10We may not be successful in our artificial intelligence initiatives, which could adversely affect our business, reputation or financial results
7. 11The development, deployment, and use of artificial intelligence technologies, including generative AI, involve significant legal, regulatory, operational, ethical and commercial risks, any of which could materially and adversely affect our business, financial condition, results of operations and reputationNew
8. 12Our engagements may be terminated, delayed or reduced in scope by clients at any time
9. 13Our operating results may fluctuate significantly from period to period as a result of factors outside of our control
10. 14We depend on project-based advisory engagements, and our failure to secure new engagements could lead to a decrease in our revenues
11. 15Clients’ failure or inability to pay for our services, whether on a timely basis or at all, could materially, adversely affect our results of operations and financial conditionNew
12. 16If we are unable to achieve or maintain adequate utilization for our consultants, our operating results could be adversely impacted
13. 17We could lose money on our fixed-fee or capped-fee contracts
14. 18Our contracts with contingent-based revenue may cause unusual variations in our operating results
15. 19We may not be able to maintain our existing services and products
16. 20Expanding our service offerings may not be profitable
17. 21We may not have the ability to develop and offer the new services and products that we need to remain competitive
18. 22We may fail to anticipate and respond to market trends
19. 23We may be unable to protect important intellectual property rights
20. 24We face competition and our failure to compete successfully could materially adversely affect our results of operations and financial condition
21. 25We derive a significant portion of our revenues from our largest clients and could be materially and adversely affected if we lose one or more of our large clients34% rewritten

Risks Related to Management and Employees

1. 26The loss of key executives could adversely affect our business
2. 27We rely heavily on key members of our management team
3. 28We depend upon our ability to attract, retain and train skilled advisors and other professionals
4. 29We may have agreements with certain clients that limit the ability of particular advisors to work on some engagements for a period of time

Macroeconomic Risks

1. 30Our international operations expose us to a variety of risks that could negatively impact our future revenue and growth28% rewritten
2. 31Air travel, telecommunications and entry through international borders are all vital components of our business. If a pandemic, military conflict or terrorist attack were to occur, our business could be disproportionately impacted because of the disruption, including potential cancellation of ISG events
3. 32Changes to trade policy, including new or increased tariffs and changing import/export regulations, may adversely affect our business, financial condition and results of operationsNew
4. 33We operate in a number of international areas which exposes us to significant foreign currency exchange rate risk

Risks Related to Data, Cybersecurity and Confidential Information

1. 34Data protection and emerging cybersecurity laws and self-regulatory codes may restrict our activities and increase our costs71% rewritten
2. 35may limit our client data access, use and disclosure, and may require increased expenditures by us or may dictate that we may not offer certain types of servicesNew
3. 36We are exposed to risks related to cybersecurity
4. 37We are exposed to risks related to artificial intelligenceNew
5. 38for higher-risk AI use cases, defined roles and responsibilities for management oversight, and coordination among our information security, legal, compliance and risk management functionsNew
6. 39We may be subject to claims for substantial damages by our clients arising out of disruptions to their businesses or inadequate service, and our insurance coverage may be inadequate77% rewritten
7. 40We could have liability, or our reputation could be damaged, if we fail to protect client and/or our data from security breaches or cyberattacks
8. 41Client restrictions on the use of client data could adversely affect our activities
9. 42Failure to maintain effective internal control over financial reporting could adversely affect our business and the market price of our common stock87% rewritten
10. 43Our actual operating results may differ significantly from our guidance
11. 44We may experience employment-related claims, commercial indemnification claims and other legal proceedings that could materially harm our businessNew