Cash conversion remains unstable, as demonstrated by the OCF/NI ratio swinging from -3.37 in 2023Q4 to 7.66 in 2024Q3, complicating the sustainability of ongoing shareholder returns.
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 | Dec'10 | Dec'09 | Dec'08 | Dec'07 | Dec'06 |
|---|
| Cash from Operations | 27.36M | 29.01M | 19.86M | 12.27M | 11.15M | 41.94M | 43.97M | 20.44M | 19.13M | 11.44M | 10.66M | 6.81M | 7.01M | 23.05M | 10.73M | 871K | 5.75M | 4.06M | 20.48M | 5.92M | -46.87K |
| Operating CF Margin % | - | 11.85% | 8.02% | 4.22% | 3.89% | 15.1% | 17.65% | 7.69% | 6.94% | 4.25% | 4.92% | 3.26% | 3.34% | 10.93% | 5.57% | 0.47% | 4.35% | 3.06% | 11.72% | 31.33% | - |
| Operating CF Growth % | 280.14% | 46.04% | 61.87% | 10.1% | -73.43% | -4.61% | 115.15% | 6.84% | 67.14% | 7.36% | 56.45% | -2.77% | -69.61% | 114.86% | 1131.92% | -84.84% | 41.69% | -80.2% | 245.9% | 12733.35% | - |
| Net Income | 10.57M | 9.34M | 2.84M | 6.15M | 19.73M | 15.53M | 2.75M | 3.34M | 5.68M | -2.1M | -6.38M | 4.95M | 6.3M | 4.78M | 603K | -55.94M | -53.16M | -2.84M | -57.91M | 4.47M | -54.82K |
| Depreciation & Amortization | 4.54M | 4.54M | 6.11M | 6.88M | 5.71M | 5.68M | 6.77M | 7.32M | 7.77M | 12.72M | 7.87M | 7.08M | 7.37M | 7.47M | 8.86M | 11.03M | 9.85M | 9.56M | 10M | 982K | 1.66K |
| Stock-Based Compensation | 5.42M | 7.83M | 8.05M | 9.13M | 7.46M | 6.47M | 8.89M | 9.59M | 9.86M | 7.44M | 7.05M | 5.05M | 3.11M | 3.38M | 2.8M | 3.14M | 3.09M | 2.83M | 1.96M | 170K | 0 |
| Deferred Taxes | 1.82M | 73K | 0 | 0 | 0 | 0 | 0 | 0 | -443K | -675K | -1.76M | -2.27M | -2.13M | -2.67M | -2.64M | -11M | -6.76M | -5.65M | -12.15M | -298K | 0 |
| Other Non-Cash Items | 3.38M | 676K | -7.85M | -530K | 432K | 6.33M | 4.04M | 158K | 1.18M | 1.63M | 92K | 612K | 684K | 1.55M | -1.33M | 62.65M | 52.81M | 8.1M | 74.97M | 5K | 0 |
| Working Capital Changes | 1.64M | 6.55M | 10.72M | -9.36M | -22.18M | 7.93M | 21.52M | 31K | -4.92M | -7.57M | 3.79M | -8.62M | -8.33M | 8.54M | 2.45M | -9.01M | -68K | -7.95M | 3.61M | 589K | 6.29K |
| Change in Receivables | 3.85M | -1.78M | 7.07M | -6.66M | -13.99M | 2.65M | 10.06M | -1.36M | 231K | -6.03M | 2.07M | -7.51M | -2.32M | 897K | 931K | -6.24M | -675K | 2.86M | 4.76M | 186K | 0 |
| Change in Inventory | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -5.79M | 914K | 1.27M | -301K | -7.98M | 7.39M | 514K | -42.86M | -56.7M | -67.72M | -68.16M | 869K | 0 |
| Change in Payables | -1.77M | 629K | 0 | 0 | 0 | 0 | 0 | 0 | 879K | -2.38M | 1.73M | -612K | 1.12M | -48K | 1.95M | -236K | -202K | -776K | -2.13M | 2.78M | 0 |
| Cash from Investing | -4.94M | -4.94M | 18.99M | -4.43M | -6.87M | -2.32M | -3.5M | -1.92M | -4M | -3.65M | -57.65M | -1.95M | -3.37M | -1.9M | -1.85M | -9.65M | -6.71M | -1.24M | -1.63M | -203.63M | -48.3K |
| Capital Expenditures | -4.95M | 0 | -2.83M | -3.43M | -3.42M | -2.32M | -1.18M | -1.92M | -4M | -3.17M | -2.36M | -1.38M | -2.17M | -1.9M | -1.82M | -1.69M | -957K | -1.24M | -1.63M | -237K | -48.3K |
| CapEx % of Revenue | 2.01% | 1.64% | 1.14% | 1.18% | 1.2% | 0.83% | 0.47% | 0.72% | 1.45% | 1.18% | 1.09% | 0.66% | 1.04% | 0.9% | 0.95% | 0.92% | 0.72% | 0.93% | 0.93% | 1.25% | - |
| Acquisitions | -1.64M | -1.64M | 0 | -1M | -3.45M | 0 | -2.32M | 0 | 0 | -889K | -55.19M | -537K | -890K | 0 | -24K | -13.68M | 0 | 0 | 0 | -203.39M | 0 |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | 1.65M | -3.3M | 21.82M | 0 | 0 | 0 | 0 | 0 | 3.06M | 403K | -103K | -30K | -310K | 4.05M | -1K | 5.7M | -5.75M | -1.24M | 3.23M | -237K | 0 |
| Cash from Financing | -20.25M | -19.55M | -37.91M | -16.2M | -18.94M | -34.13M | -15.7M | -18.93M | -24M | -16.14M | 64.29M | -13.25M | -9.41M | -9.4M | -10.18M | -6.9M | -1.7M | -22.08M | -3.94M | 244.37M | 184.08K |
| Debt Issued (Net) | -29K | -29K | -20M | 0 | 4.7M | -4.3M | -8.09M | -12.25M | -17.64M | -8.54M | 67.43M | -2.59M | -3.38M | -5.82M | -7M | -6M | -2M | -22.24M | -950K | 94.75M | 250K |
| Equity Issued (Net) | -7.89M | -8.63M | -7.65M | -6.15M | -16.12M | -23.44M | -7.19M | -6.52M | -2.24M | -2.18M | 435K | -2.8M | -5.32M | -4.05M | -1.51M | -1.23M | 302K | 244K | -2.99M | 170.36M | 5K |
| Dividends Paid | -9.18M | -9.18M | -9.39M | -8.69M | -7.46M | -4.44M | 0 | 0 | 0 | 0 | 0 | -5.19M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | -8.22M | -9.27M | -7.65M | -6.15M | -16.12M | -23.44M | -7.19M | -6.52M | -3.06M | -2.85M | -11.56M | -3.38M | -5.32M | -4.05M | -1.51M | -1.23M | 0 | -86K | -3.23M | -94.89M | -5K |
| Other Financing | -3.15M | -1.71M | -863K | -1.36M | -56K | -1.95M | -418K | -162K | -4.13M | -5.42M | -3.58M | -2.67M | -711K | 479K | -1.67M | 322K | 0 | -86K | 0 | -20.74M | -70.92K |
| Net Change in Cash | 2.58M | 5.6M | 349K | -7.86M | -16.94M | 3.78M | 25.58M | -484K | -9.79M | -6.07M | 16.65M | -9.83M | -7.42M | 11.59M | -970K | -15.83M | -2.48M | -18.36M | 13.97M | 47.09M | 88.91K |
| Free Cash Flow | 22.41M | 24.99M | 17.03M | 8.84M | 7.72M | 39.62M | 42.79M | 18.52M | 15.13M | 8.28M | 8.3M | 5.43M | 4.84M | 21.15M | 8.91M | -819K | 4.79M | 2.82M | 18.85M | 5.68M | -95.17K |
| FCF Margin % | 9.1% | 10.21% | 6.88% | 3.04% | 2.7% | 14.26% | 17.18% | 6.97% | 5.49% | 3.07% | 3.83% | 2.6% | 2.31% | 10.03% | 4.62% | -0.44% | 3.63% | 2.12% | 10.78% | 30.07% | - |
| FCF Growth % | 41.25% | 46.69% | 92.73% | 14.45% | -80.51% | -7.4% | 131.11% | 22.38% | 82.83% | -0.3% | 52.71% | 12.36% | -77.13% | 137.5% | 1187.55% | -117.1% | 70.04% | -85.05% | 231.58% | 6072.28% | - |
| FCF per Share | 0.45 | 0.50 | 0.34 | 0.18 | 0.15 | 0.77 | 0.86 | 0.39 | 0.33 | 0.19 | 0.23 | 0.14 | 0.13 | 0.55 | 0.24 | -0.02 | 0.15 | 0.09 | 0.60 | 0.15 | -0.01 |
| FCF Conversion (FCF/Net Income) | 2.12x | 3.11x | 7.00x | 1.99x | 0.57x | 2.70x | 15.96x | 6.12x | 3.37x | -5.37x | -1.64x | 1.41x | 1.13x | 4.83x | 17.79x | -0.02x | -0.11x | -1.43x | -0.35x | 1.32x | 0.85x |
| Interest Paid | 1.87M | 0 | 5.73M | 5.26M | 2.4M | 1.88M | 3.11M | 5.69M | 5.98M | 5.6M | 1.93M | 1.46M | 1.78M | 2.41M | 2.61M | 2.91M | 2.91M | 4.16M | 6.24M | 0 | 0 |
| Taxes Paid | -396K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 2.62M | 2.44M | 5.71M | 4.53M | 5.72M | 6.64M | 1.97M | 3.9M | 7.71M | 5.21M | 5.5M | 0 | 0 |
Volatile working capital cycles
As evidenced by the quarterly cash flow statements, III exhibits a significant disconnect between net income and operating cash flow, with the OCF/NI ratio fluctuating wildly from -3.37 in 2023Q4 to 7.66 in 2024Q3, suggesting that reported earnings are a poor proxy for actual cash generation.
The extreme volatility in the OCF/NI ratio indicates that accounting accruals and timing differences in revenue recognition heavily distort the company's reported profitability. Investors should monitor whether this instability is a permanent feature of the project-based advisory model or a temporary byproduct of lumpy contract billing cycles.
According to the provided financial data, III's free cash flow margins have demonstrated high sensitivity to operational performance, swinging from a peak of 18.0% in 2025Q2 to a negative 2.5% in 2026Q1, highlighting the inherent difficulty in maintaining consistent cash conversion within the current advisory framework.
The sharp decline in FCF margin during the most recent quarter suggests that the company's cash-generating engine is highly susceptible to minor shifts in project delivery timelines. This lack of FCF predictability complicates the valuation of the firm as a platform-based business, as cash flows remain tethered to labor-intensive advisory cycles.
Based on reported figures, III's working capital changes have been highly erratic, ranging from a $6.5 million outflow in 2026Q1 to a $5.6 million inflow in 2025Q2, which suggests that the firm struggles to manage the timing of client collections against its ongoing personnel-related cash obligations.
The frequent swings in working capital indicate that the company's cash position is heavily dependent on the timing of large project milestones and subsequent client payments. This volatility may force management to maintain higher cash buffers than would otherwise be necessary, potentially limiting the efficiency of capital deployment.
As reported in recent filings, III has consistently prioritized shareholder returns through dividends and buybacks, totaling several million dollars per quarter, even as the company faces a -1.16% YoY revenue contraction, which warrants investigation into the sustainability of this capital allocation strategy given the thin net margins.
The decision to continue aggressive capital returns while organic growth remains elusive suggests a management focus on supporting the share price rather than reinvesting in the GovernX platform or other high-growth initiatives. This strategy may be unsustainable if the current cash flow volatility persists and limits the firm's financial flexibility.
Quick answers to the most common questions about buying III stock.
Information Services Group, Inc. (III) generated $29.0M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Information Services Group, Inc. (III) generated $25.0M in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
Information Services Group, Inc. (III) spent $0.0M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, Information Services Group, Inc. (III) returned $9.2M to shareholders via cash dividends and spent $9.3M on share repurchases. This shows the company's commitment to returning capital to its equity investors.