Coverage. Following the presentation, we will have some time for Q&A. Feel free to submit questions using the Submit a Question function. With us today from ISG is Michael Connors, CEO, and Michael Sherrick, CFO. With that, I'm going to turn it over to the company. Over to you, Mike.
Great. Thanks. Thanks very much, Joe. And good day, everyone. And thank you for joining us and your interest in ISG. Let me start on one page. Just, you know, who are we? We are a leading global technology research and advisory firm. We serve the largest corporations in the world. We have 1,600 employees on the ground, operating in 20 countries. Our real value difference, our differentiation, is our data. We have fantastic technology benchmarks and contract database, over 10 million, really, real-world data points. We serve 900 clients a year. We serve 20 different industries. And we normally serve 10-12 of the top 15 revenue companies in each of those 20 industry segments. We are a firm that's around $290 million in revenue. We have $125 million, or approximately 40% or so of our revenue is recurring revenue.
Client advocacy, meaning that they would return to ISG or refer us, is at the very, very high end. Now, what do we do? We essentially do four things for our clients, all that are based on our data and platform delivery model. Starting in the front left here is our research. We have a platform in each of these four areas, in this case, ISG Executive Insights. Here we provide research, as you would think, subscription-based, around emerging technologies. Think of it as AI, blockchain, robotic process automation, cloud, etc. Benchmarking. This is where we really thrive and where clients initially want ISG. We have cost, we have price, we have quality of technology portfolio capabilities in our benchmarking, as we have an over 50% market share in the sourcing industry. We have a couple of platforms here. We call it ISG Inform and ProBenchmark.
These are platforms that clients can subscribe to and gather certain benchmark information. In the bottom right, this is our advisory or consulting business. This is where we take our informed research, our benchmarking to create what is the art of the possible for a client. And this is where we execute with our clients hand in hand to ensure that they have a great technology outcome. Here we introduced a new platform called ISG Tango. This is a sourcing platform, an all-digital platform for our enterprise clients, for technology providers like an IBM or an Accenture, and for our own ISG advisors. And then in the bottom left, this is our governance business. This is where we help large companies manage their technology contracts. Here we have a software called GovernX.
It's a platform where we can put these contracts on and help these large clients manage $50 million, $100 million, $300 million technology contracts. Now, our differentiator is data. We have the deepest technology benchmarking and sourcing contract database in the world. The reason we do is we have a greater than 50% market share on sourcing transactions in technology around the world. We put all that together, that is available for our benchmarking with our enterprise clients. We are unique in the sense that we are trusted, independent, objective voice. So think of us sitting in the center, on the left-hand side are our enterprise clients that pay our bills. And on the right-hand side are the service and technology providers, the Accenture, the Capgemini, the AT&Ts, the Salesforces of the world who are abiding and wanting to get enterprise business.
We sit in the middle to help manage that process between the provider and the enterprise. Now, what's our ecosystem? We kind of have a sandbox in the managed services industry of about $125 billion of contracts each year. Of that group, there's about 20%-25% that's advised by a third party like ISG. So think of it kind of in the category of around $40 million-$45 million advised each year. We do $20 billion-$25 billion of that, or a little over 50% of our share of the share of the market. And then on very large transactions, we refer to them as $100 million or more. We have over 70% of that market. Now, let me walk you through an example. Here's how we go about our work. This is an example of a very large manufacturing company.
Here they had spend of about $1.2 billion in technology, finance, HR, and procurement. They asked us to come in, understand their total spend in technology, and then assess whether they were in the top quartile or not of their peer group. We made that assessment. We charged them about $500,000. It took about two months to do the work. We came back to them, and in this particular case, we estimated that there might be $1-$200 million of opportunity. They say, "Great. Can you help us execute against that?" And then we go to our solution kit to help them. Here is where we help them around software. Do you have a great price, etc., with the softwares of the world, whether it's a Salesforce or a Snowflake or an Oracle or an SAP? Network. What about their network capabilities around AT&T, Orange, British Telecom, etc.?
Modernizing their applications and so on. Here's a client that we started off with a $500,000 benchmarking or assessment piece of work. Over the last three years, we've generated fees in $12 million worth to ISG. And in so doing, we've actually captured about $200 million of opportunity for this client, $90 million in hard savings, and another $120 million of new revenue streams. So this is very typical of how we go about our work with our clients. Sometimes they might bring us in to look at network, our applications, our infrastructure. In other cases, they may have us come in and look at a number of what we call towers. In this case, IT, finance, HR, and procurement. Now, our business is kind of in two buckets. We have about $125 million of recurring revenue streams.
Recurring revenue streams, we wake up January 1, and we have a contract for the year or more. This is where our research business, our platforms, and our multi-year contracts reside. Think about a multi-year contract. We have like a 3-year benchmarking contract with the 9 largest oil and gas companies in the world. That would be a multi-year contract example. $125 million of recurring revenue streams. We then look at our client base from the prior year and say how much of our revenue for this year will come from our prior clients. And this is what we refer to as our recurring revenue. Over the last decade, we have generated somewhere between 85%-90% of our revenue every year from the same clients from a year ago. It might be that Marriott spent $3 million last year, and they spend $1 million this year.
Or Stanley Black & Decker might have spent $1 million last year and $4 million this year. But we know, as an aggregate, they will generate around 85%-90% of our revenue. And that's our recurring revenue streams. Now, industries. We serve 20. We picked six of those here just to give you an idea of the kind of work and who we do it with. Here is health sciences. The top 15 health sciences companies in the world do business with ISG. 13 of the top 15 banking and financial services companies work with us. 12 in manufacturing out of 15, 12 in tech, 10 in energy and insurance. Gives you a flavor. These are large companies, and they work with us year in and year out. Now, AI. I've got two slides on AI.
First is we've done work with our client base to understand what they're thinking about in terms of AI. We just completed a survey of our top clients, and 55% of them are working on an AI roadmap right now. We think that the spending in this area will be about 3x what it was at the end of last year by the end of next year. And that by 2030, this will be a very large spending area in technology departments around these large corporations by the end of 2030. Now, what are we at ISG doing about it? We're working in AI in three different buckets. Number one, we have an AI advisory group. This is where we're advising our enterprise clients on their strategy, on the AI ecosystem around sourcing, and so on.
In the middle, this is where we inform our clients around software, around providers in enterprise, around AI using research. And then for ourselves, we have AI powered in our platforms in ISG Tango, Intelligent Contracting in GovernX, and so on. And we also have our own ISG GPT, which is ring-fenced, if you will, to protect our own data. So these are the areas that we're working with with clients every day. And this is going to be a significant growth area. If you look at the quote in the top right corner, one of our clients said, "Look, you are akin to our fiduciary as a client, a trusted, independent third party with expertise to help us build our Gen AI approach." Very typical of what our clients are asking from ISG. Now, one slide on our competitive landscape.
Up in the upper right-hand corner, the number one competitor for us is the procurement departments in these large corporations. We sell to the end user, to the CIO, the CFO, the chief executive, the president, etc. But procurement, because of the large corporations we deal with, are always involved. Their pitch might be, "Hey, look, we can do this. You don't need a third party like ISG to do it." Our response is, "Look, we will partner with procurement, but we do this for a living. We do it day in, day out, and we have a rich database in which you can draw on." And that is really our calling card. Now, we don't have anybody that looks just like ISG. So our competitors, in addition to the internal procurement departments, depend on what solution we're helping our clients with.
In research, think of firms like Gartner or Forrester. In benchmarking, it's primarily Gartner. In advisory work, it might be the audit firms like KPMG or Deloitte, or it might be a Bain or a BCG. And then in our governance, where we're helping govern these technology contracts, think of a number of small software players that are in the market. So it's a pretty fragmented competitor base for us, but no one looks just like us in terms of our complete offerings. Now, we do also believe that we have, for the industry, that we have a role to play to inform the industry of what is happening in the sourcing industry. We are very much known as the authoritative voice in each quarter, and we've done this now for 87 consecutive quarters.
We have a call, 1,000-1,500 people on it, all the analysts that follow the major tech companies. So if you're an analyst following an IBM, an Accenture, or a Genpact, you're on the call. The providers are on the call, as well as enterprise clients. And what we try to provide is an analytical review of what's just transpired in the quarter, who are the winners, who are the losers, and so on. And we post that analytic on our website under our ISG Index. We also have a great culture. We have a trusted and long-term partnership with our clients. I founded the firm in 2006 as a startup. We have built these long-term relationships with our clients over the past 17 years. We were born virtual. We work from home or we work at the client premises. We have very little real estate.
When COVID hit, we knew how to work. We had our knowledge network systems in place. We knew how to work from a remote environment. All we needed to do was to help our clients understand how we could deliver in a remote environment. Now it's almost commonplace. One final slide, and I'll hand it over to Michael on some financials. This is our growth plan. Driving recurring revenue streams, and our target is to get to $150 million. We're leading with AI in our research and in our advisory, including with our new ISG Tango platform that we launched in March. Digital and business transformation will continue over the next three to five years. It has slowed down a little bit because of the macro environment. Clients have pulled back. The digital transformation objectives still remain for these clients.
We have a great set of enterprise advisory services, everything from change management to help our clients put a wrapper around all these technology changes that are happening, to cost optimization, to training as a service. Our operating model changed during COVID. We call it ISG Next. We focus on the enterprise, and we focus on digital. We have a workforce that we call our iFlex workforce. We can utilize all 1,600 of our colleagues anywhere in the world for any client at any time. So one of our cyber experts in Frankfurt, Germany, could be helping us with Microsoft in Seattle. Or a client, one of our people in New York City, could be helping Barclays Bank in the UK.
Because our workforce is remote and that we were born virtual, we have the capability now of leveraging our workforce as clients do primarily a lot of their work in a remote environment. So with that, let me turn it over to Michael.
Thank you, Mike. So Mike just took you through sort of the overview of the company. I want to talk now about how that positioning translates into financial results. What you see here is our three-year performance. In particular, if you start with revenue, our target has been to grow revenue upper single digits. I think, as you can see from here, over the last three years, we have done that. Equally important, though, is how that revenue flows through to EBITDA. We again target about 1.5x flow-through.
We've seen a little bit better than that, as you can see here over the last three years. That has continued, obviously, to translate into the EPS in terms of the 43% EPS growth over the last three years. We have a very strong track record of shareholder returns, as you can see from this slide. Again, if I look really just at the three-year period, we've returned a little bit under 64, 64 exact if you add in 2020, excuse me, via a combination of both dividend and share buyback. That has been our strategy in terms of shareholder return. I would expect for that to continue as we move forward. With regards to capital structure, this data is as of the end of the first quarter. We had $74 million in debt, $14 million in cash, so a net debt position of $60 million.
We are very comfortable with that position as we move forward and based on our EBITDA outlook. So just to wrap it all up from an investment thesis standpoint, one, very unique position that we have in a market-leading position with 50% market share. Two, and very important, is what we call the data moat, right, which is the data that we use and lead with benchmarking, research, etc., in nearly all of our engagements. And it's a very strong differentiator for us. Third is that market opportunity and client permission. 900+ blue-chip clients and an extremely strong client advocacy rate gives us permission to expand within the clients that we have. We have a very strong growth plan in place, recently the launch of Tango, the recurring revenue streams, and obviously what we expect to be a very big tailwind from AI as we move forward into 2025.
Then lastly, as I just touched on, really the strong track record of returning capital, share buyback, dividends. We've been very prudent, and we will continue to be. So with that, I will turn it back to Joe to open it up for Q&A.
Thank you for the presentation. Very informative. Let's start with: we're a little over three months into ISG Tango. Maybe you can give us a little color on what's been the client feedback regarding it.
Okay. Good question. So again, just to level set, Tango is our platform that an enterprise client will put all of their data into. A technology provider who would like to get to the enterprise business, whether it's an IBM or Accenture, will operate off of that platform when we're doing a sourcing transaction. And then ISG will use it for all of our advisors.
The advantage for the client from the enterprise is they can get speed to value quicker. We think it can take about 10% of the time off of how long it takes from the beginning of a sourcing transaction to completion. That's good news for the client because they're going to save more money. From the technology provider, that means they're going to get to an outcome of a win or lose faster. And that means they'll be able to begin to contribute money to their business in a faster pace. And then from an ISG standpoint, it's going to be higher margins. We're going to be able to do it more efficiently, more effectively, and it will help us march toward our goal of 17%. So so far, so good. We have about $2.7 billion of contracts on the platform in just the first 60 days, Joe.
Excellent.
Now, you operate across a multitude of verticals and regions. Which of those verticals and regions have seen more areas of strength, and how do you think those will look over the rest of the year?
Some of the strength right now we're seeing health sciences, utilities, energy, aerospace are all hot right now, looking at cost and managing cost and doing transformation around technology. Consumer banking to some degree, insurance just a bit behind it, a little slower. We think all of that will begin to change as the macro environment begins to lift. We think that if there were Fed cuts coming as we turn into 2025, that it will help enable some of the buying community to feel like the worst is behind them and get more confidence in terms of moving their transformation initiatives at a faster pace, Joe.
Okay.
Now, you said one of the uses of capitals for potential M&A opportunities, I think you referred to it in the past as your string of pearls strategy. Just kind of wondering, maybe give us a little update of how that M&A market is looking out there. What are you seeing in terms of valuations or things becoming more reasonable that would give you the opportunity to do some additional bolt-on acquisitions?
Yeah. So good question. Just to remind everybody, we've done 2 since October of 2022. One was a company called Change 4 Growth, all around enterprise change. With all the technology changing happening in these big corporations, they wanted us to help them manage that change. We've now built that business, and that's growing at double digits. Then just last year, late last year, we bought a company called Ventana Research.
Their sole focus is around software and the $800 billion software industry. It helps our recurring revenue streams. So what we're looking at is either something in the digital area that we can expand or in recurring revenues that we can use our distribution channels. We are seeing valuations to be a little softer. We are in the market looking. So we think it's a good time right now if we can find the right opportunities.
Okay. And then in-person events really took a hit in the COVID era. Just wondering how the in-person events have been going so far, and what's your expectations regarding such future events?
Yeah. So events for us are twofold. It's a revenue producer and profit. And second of all, it allows us to showcase all of our IP. We currently, right now, are in London holding our Digital Business summit.
As we speak, there are 150 enterprise clients in the room. We think that the live events are back. So we do about 15, 16 of those per year, Joe. We also do some remote things. But for the most part, our events now are live. We see kind of the intimacy of our kind of 125-150 kind of clients in a room learning more about what's happening on AI, on digital, on cloud, on software. As I said, we've got one going in London as we speak.
Okay. Then during the first quarter call, you kind of put out the expectation. You thought that would kind of be the bottom for the year and just start to build that from the second quarter on into the second half of 2024.
Do you still see that type of scenario unfolding, or is there anything different that you could provide us today?
Yeah. No, we think that's what's going to happen. That's why our second quarter guidance is above Q1. So we begin to see a little bit. Q3 tends to be similar to Q2 because of all the European vacations with clients. But then we would also see Q4 look more like a step climb like we're seeing from Q1 to Q2. So we're still on that path. And we think if the macro environment eases up toward the end of the year as we move into 2025, then we would expect that acceleration to continue, Joe.
Okay. I want to take a somewhat ticklish question from the audience for you. It has to do with the buyback and insider selling.
So basically, just kind of summarizing it, they're saying that given you've repurchased stock at about 55% higher levels than where the stock is trading today, and you still have about 20 million left under your authorization, why not launch a tender for stock at the current price? That's part A. And part B was they were wondering if you are finished with your 10b5-1 plan or what is your thoughts, I guess, on insider selling going forward?
Okay. Well, just a couple of things. First of all, in terms of insider, there is no one that is selling our stock inside our firm. None. Secondly, in fact, there's net buying on ours if you look on the facts on that particular point. But yes, we are buying at the moment, and we are in the market lightly.
As you'll know, that as we build up our cash, that's where we look to besides our dividend, that's where we're looking to do our purchasing. So we'll continue to look at our stock as one of the ways to return cash, if you will, to our shareholders. We're not going to declare any kind of a plan today, but I think we have an excellent track record over the last three years, as Michael mentioned, returning about $64 million. And our intention, as we kind of get through this macro environment for the next quarter or two, to be sure that everything is moving in the right direction, I think you'll see us in the market at heavier levels.
Great. Well, that's all the time we have for today. We really appreciate you guys taking the time. It was a great presentation. Thanks for answering the questions.
We look forward to continuing our research coverage of ISG and seeing where the story unfolds going forward. Thanks again.