Core Viewpoint - ASGN Inc reported quarterly earnings of $1.17 per share, exceeding the Zacks Consensus Estimate of $1.08 per share, but down from $1.36 per share a year ago, indicating a mixed performance despite the earnings surprise of +8.33% [1][2] Financial Performance - The company posted revenues of $1.02 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 2.95%, although this is a slight decrease from year-ago revenues of $1.03 billion [2] - Over the last four quarters, ASGN has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] Stock Performance - ASGN Inc shares have declined approximately 40.3% since the beginning of the year, contrasting with the S&P 500's gain of 7.3% [3] - The current Zacks Rank for ASGN is 5 (Strong Sell), indicating expectations of underperformance in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.16 on revenues of $988.12 million, and for the current fiscal year, it is $4.30 on revenues of $3.91 billion [7] - The trend of estimate revisions for ASGN Inc was unfavorable prior to the earnings release, which may impact future stock movements [5][6] Industry Context - The Computers - IT Services industry, to which ASGN belongs, is currently ranked in the bottom 29% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Empirical research indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8]

Financial Data and Key Metrics Changes - ASGN reported revenues of $1,020,000,000 for Q2 2025, which was above the high end of guidance and represented a decrease of 1.4% year over year [6][23] - Adjusted EBITDA was $108,500,000 with an adjusted EBITDA margin of 10.6%, at the top end of expectations for the quarter [6][26] - Net income for the quarter was $29,300,000, and free cash flow was $115,800,000, translating to a conversion rate of approximately 107% of adjusted EBITDA [26][27] Business Line Data and Key Metrics Changes - Revenues from the commercial segment were $708,100,000, a decrease of 2.4% compared to the prior year, while commercial consulting revenues increased by 15.7% year over year to $325,700,000 [23][24] - Federal government segment revenues were $312,500,000, an increase of 1.1% year over year, including approximately $10,000,000 of higher than expected license revenue [24] - Assignment revenues totaled $382,400,000, reflecting a decline of 13.9% year over year due to macroeconomic softness [23] Market Data and Key Metrics Changes - The consumer and industrial accounts performed strongly, with mid double-digit growth year over year, driven by materials, utilities, and consumer discretionary accounts [11] - The healthcare vertical remained flat year over year, while financial services and TMT accounts saw declines compared to the previous year [11][12] - Federal contract awards totaled $72,000,000 for the quarter, with a book-to-bill ratio of 1.1 times on a trailing twelve-month basis [8] Company Strategy and Development Direction - ASGN is focusing on AI investments, recognizing the need for clients to stay competitive through technological advancements [29][30] - The company launched the ASGN AI Innovation Center to enhance innovation and promote AI-driven business growth [30][31] - Strategic partnerships with companies like AWS and Workday are being leveraged to build client-specific IP and enhance service offerings [67][70] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing macroeconomic uncertainties but highlighted continued client investment in AI and modernization efforts [6][29] - The recent increase in U.S. Defense spending is expected to benefit ASGN's federal business, particularly in AI and cybersecurity [9][48] - Management expressed cautious optimism regarding the recovery of discretionary spending and the potential for growth in consulting services [45][60] Other Important Information - The company has approximately $470,000,000 remaining under its share repurchase authorization [27] - Guidance for Q3 2025 estimates revenue between $992,000,000 and $1,012,000,000, with net income projected between $35,800,000 and $39,400,000 [28] Q&A Session Summary Question: How is TopLock performing relative to expectations? - Management indicated that TopLock is tracking just ahead of revenue and bookings expectations, contributing over $150,000,000 in revenues for the full year [36][37] Question: What impact is AI having on the cyclical assignment business? - Management stated that the assignment business remains stable and that current softness is largely due to macroeconomic factors rather than AI [39][42] Question: What is the long-term margin profile for the government consulting area? - Management noted that while higher margin work is diminishing, there are opportunities to increase direct labor, which could improve margins in the future [50][52] Question: What are the expectations for the impact of DOGE on revenues? - Management confirmed that the DOGE impact was expected to be less than 2% of total revenues, consistent with prior expectations [55] Question: What drove the strength in the consumer and industrial segments? - Management highlighted significant investments and demand in cloud, data, and AI as key drivers of strength in these segments [82][84] Question: How is ASGN using AI internally to improve efficiencies? - Management discussed ongoing efforts to implement AI across enterprise software tools to enhance productivity and streamline operations [87][89]

Financial Data and Key Metrics Changes - ASGN reported revenues of $1,020 million for Q2 2025, which was above the high end of guidance and represented a decrease of 1.4% year over year [5][23] - Adjusted EBITDA margin was 10.6%, at the top end of expectations for the quarter [5][27] - Net income for the quarter was $29.3 million, with free cash flow of $115.8 million, translating to a conversion rate of approximately 107% of adjusted EBITDA [27][28] Business Line Data and Key Metrics Changes - IT consulting revenues grew to approximately 63% of total revenues, up from 57% in the prior year [5] - Commercial consulting revenues totaled $325.7 million, an increase of 15.7% year over year, driven by contributions from TopLock [23] - Federal government segment revenues were $312.5 million, an increase of 1.1% year over year, including $10 million of higher than expected license revenue [23] Market Data and Key Metrics Changes - Consumer and industrial accounts showed mid double-digit growth year over year, driven by strong performance in materials, utilities, and consumer discretionary sectors [10] - The healthcare vertical remained flat year over year, while financial services and TMT accounts declined compared to the previous year [10][11] - Federal contract awards totaled $72 million for the quarter, with a book-to-bill ratio of 1.1 times [7] Company Strategy and Development Direction - ASGN is focusing on AI investments to enhance competitiveness and drive demand for cloud and data solutions [6][30] - The company launched the ASGN AI Innovation Center to unify AI expertise and promote business growth [31][33] - Strategic partnerships with companies like AWS and Workday are being leveraged to deliver tailored technology solutions [18][31] Management Comments on Operating Environment and Future Outlook - Management noted that macroeconomic uncertainty is impacting discretionary spending, but clients are still investing in AI to maintain competitiveness [5][30] - The recent increase in U.S. Defense spending is expected to benefit ASGN's federal business, particularly in AI and automation [8][30] - Management expressed cautious optimism regarding future growth, particularly in the commercial consulting space [63] Other Important Information - The company has approximately $470 million remaining under its $750 million share repurchase authorization [28] - ASGN plans to host an Investor Day in Q4 to discuss long-term strategies for growth and value creation [34] Q&A Session Summary Question: How is TopLock performing relative to expectations? - TopLock is tracking just ahead of revenue and bookings expectations, with EBITDA margins in the high teens [39] Question: What impact is AI having on the cyclical part of the assignment business? - The cyclicality is stable, with no significant impact from AI observed at this stage [46] Question: What is the long-term margin profile for the government consulting area? - The long-term margin profile is expected to remain in the 20% to 21% range, with opportunities for increasing direct labor [56] Question: What were the expectations regarding the DOGE impact? - The DOGE impact was expected to be less than 2% of total revenues, consistent with prior expectations [59] Question: Can you discuss the strength in the consumer and industrial segments? - Strength was driven by significant investments in cloud, data, and AI, particularly in materials and utilities [87][90] Question: How is ASGN using AI internally? - ASGN is implementing AI across enterprise software tools to enhance productivity and efficiency in operations [92]

Q2 2025 Earnings Supplemental Materials Safe Harbor Operating Data | | | Q2 | | | --- | --- | --- | --- | | | 2025 | | 2024 | | Results Operating | | | | | Revenues | $ 1,020.6 | $ | 1,034.7 | | Gross Profit | 293.3 | | 301.1 | | Net Income | 29.3 | | 47.2 | | Adjusted Net Income | 51.6 | | 62.6 | | Adjusted EBITDA | 108.5 | | 117.1 | | Margins | | | | | Gross | 28.7% | | 29.1% | | EBITDA Adjusted | 10.6% | | 11.3% | | Earnings per Share - Diluted | | | | | Income per Share | $ 0.67 | $ | 1.02 | | Net Incom ...

Executive Summary & Highlights [Q2 2025 Performance Overview](index=1&type=section&id=Q2%202025%20Performance%20Overview) ASGN reported solid second quarter 2025 results with revenues exceeding the high-end of guidance estimates and Adjusted EBITDA margin at the top end of expectations. IT consulting revenues grew to 63% of total revenues, with the recent acquisition TopBloc performing above expectations Q2 2025 Key Financial Highlights | Metric | Value | | :-------------------------------- | :------------------- | | Revenues | $1.02 billion | | Net income | $29.3 million | | Adjusted EBITDA | $108.5 million | | Adjusted EBITDA margin | 10.6 % | | Operating cash flows | $124.9 million | | Free Cash Flow | $115.8 million | | Shares Repurchased | 200,000 shares | | Repurchase Value | $9.5 million | | Commercial Segment TTM Bookings | $1.4 billion | | Commercial Book-to-bill ratio | 1.2 to 1 | | Federal Government TTM Awards | $1.4 billion | | Federal Book-to-bill ratio | 1.1 to 1 | - IT Consulting Revenues reached **63%** of total revenues for the quarter[3](index=3&type=chunk) - TopBloc, the newest addition to ASGN, is performing above expectations and contributed to the continued growth of the IT consulting business[3](index=3&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) CEO Ted Hanson highlighted strong Q2 performance with revenues above guidance and Adjusted EBITDA margin at the top end. He noted the positive impact of TopBloc and the growth in IT consulting. Despite macroeconomic uncertainty affecting discretionary spending, client demand for cloud, data solutions, and AI for IT modernization remains strong - Revenues of **$1.02 billion** were above the high-end of guidance, while Adjusted EBITDA margin of **10.6 percent** was at the top end of expectations[3](index=3&type=chunk) - While commercial consulting bookings are growing, macroeconomic uncertainty continues to impact discretionary spending[3](index=3&type=chunk) - Clients remain focused on staying competitive, driving strong demand for cloud and data solutions to modernize legacy systems and enable AI[3](index=3&type=chunk) Second Quarter 2025 Financial Results [Consolidated Financial Performance](index=2&type=section&id=Consolidated%20Financial%20Performance) ASGN's consolidated revenues for Q2 2025 were $1.02 billion, a slight decrease compared to Q2 2024. Net income and Adjusted EBITDA also saw year-over-year declines Q2 2025 Consolidated Financial Summary | Metric | Q2 2025 | Q2 2024 | | :-------------------------- | :------------------- | :------------------- | | Revenues | $1,020.6 million | $1,034.7 million | | Net income | $29.3 million | $47.2 million | | Earnings per diluted share | $0.67 | $1.02 | | Adjusted EBITDA | $108.5 million | $117.1 million | | Adjusted EBITDA margin | 10.6 % | 11.3 % | - Consolidated revenues for the quarter were **$1.02 billion**, compared with **$1.03 billion** in the second quarter of 2024[6](index=6&type=chunk) [Segment Performance (Commercial & Federal Government)](index=2&type=section&id=Segment%20Performance) Commercial Segment revenues decreased year-over-year, while the Federal Government Segment experienced a slight increase. Within the Commercial Segment, the Consumer and Industrial vertical showed double-digit growth, while other verticals declined or remained flat Segment Revenues (Q2 2025 vs Q2 2024) | Segment | Q2 2025 Revenues | Q2 2024 Revenues | % of Total Revenues (Q2 2025) | | :------------------------ | :----------------- | :----------------- | :------------------------------ | | Commercial Segment | $708.1 million | $725.7 million | 69 % | | Federal Government Segment | $312.5 million | $309.0 million | 31 % | - The Consumer and Industrial industry vertical was up double digits, Healthcare was flat, and the remaining three industry verticals declined[6](index=6&type=chunk) [Revenue Mix (IT Consulting vs. Assignment)](index=2&type=section&id=Revenue%20Mix) IT consulting revenues significantly increased year-over-year, now representing 63% of total revenues, driven by a 15.7% growth in Commercial Segment consulting. Conversely, assignment revenues declined, reflecting continued softness in macro-sensitive parts of the Commercial Segment Revenue Mix (Q2 2025 vs Q2 2024) | Revenue Type | Q2 2025 Revenues | % of Total (Q2 2025) | Q2 2024 Revenues | % of Total (Q2 2024) | | :------------------- | :----------------- | :------------------- | :----------------- | :------------------- | | IT consulting revenues | $638.2 million | 63 % | $590.5 million | 57 % | | Assignment revenues | $382.4 million | 37 % | $444.2 million | 43 % | - Commercial Segment consulting revenues were up **15.7 percent** year-over-year[7](index=7&type=chunk) - Assignment revenues reflected continued softness in the portions of the Commercial Segment business that are more sensitive to changes in macroeconomic cycles[7](index=7&type=chunk) [Gross Margin Analysis](index=2&type=section&id=Gross%20Margin%20Analysis) Consolidated gross margin compressed by 40 basis points to 28.7% in Q2 2025 compared to Q2 2024. Commercial Segment gross margin improved due to a higher mix of consulting revenues, while Federal Government Segment gross margin declined due to an increased volume of low-margin software licenses Gross Margin (Q2 2025 vs Q2 2024) | Segment | Q2 2025 Gross Margin | Q2 2024 Gross Margin | | :------------------------ | :------------------- | :------------------- | | Commercial Segment | 33.0 % | 32.7 % | | Federal Government Segment | 19.2 % | 20.6 % | | Consolidated | 28.7 % | 29.1 % | - Gross margin for the Commercial Segment was up **30 basis points**, reflecting a higher mix of consulting revenues[8](index=8&type=chunk) - Gross margin for the Federal Government Segment was down **140 basis points**, due to higher volume of low-margin software licenses revenue[8](index=8&type=chunk) [Operating Expenses and Net Income](index=2&type=section&id=Operating%20Expenses%20and%20Net%20Income) Selling, general, and administrative (SG&A) expenses increased, partly due to unguided acquisition, integration, and strategic planning expenses. Net income and diluted earnings per share significantly decreased year-over-year, as did Adjusted EBITDA Net Income and Adjusted EBITDA (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :-------------------------- | :------------------- | :------------------- | | SG&A expenses | $216.8 million | $205.6 million | | Net income | $29.3 million | $47.2 million | | Earnings per diluted share | $0.67 | $1.02 | | Adjusted EBITDA | $108.5 million | $117.1 million | | Adjusted EBITDA margin | 10.6 % | 11.3 % | - SG&A expenses included **$8.3 million** in acquisition, integration, and strategic planning expenses, which were not included in the Company's previously-announced guidance estimates[9](index=9&type=chunk) Capital Resources and Allocation [Balance Sheet Highlights](index=3&type=section&id=Balance%20Sheet%20Highlights) As of June 30, 2025, ASGN maintained a strong liquidity position with $138.9 million in cash and significant availability under its revolving credit facility, alongside its senior secured debt and unsecured notes Capital Resources (as of June 30, 2025) | Metric | Value | | :------------------------------------------------ | :------------------- | | Cash and cash equivalents | $138.9 million | | Availability under Senior Secured Revolving Credit Facility | $320.0 million | | Senior Secured Debt (term loan B facility) | $491.3 million | | Senior unsecured notes (4.625% due 2028) | $550.0 million | [Share Repurchase Program](index=3&type=section&id=Share%20Repurchase%20Program) During Q2 2025, ASGN repurchased 200,000 shares of its common stock for $9.5 million, with approximately $470 million remaining available under the existing stock repurchase plan - In the second quarter of 2025, Company repurchased **200,000 shares** of its common stock for **$9.5 million** at an average price of **$58.69 per share**[11](index=11&type=chunk) - Approximately **$470 million** remained available at quarter end for repurchases under the Company's stock repurchase plan[11](index=11&type=chunk) Third Quarter 2025 Financial Outlook [Q3 2025 Estimates](index=3&type=section&id=Q3%202025%20Estimates) ASGN provided financial estimates for the third quarter of 2025, projecting revenues between $992.0 million and $1,012.0 million, and diluted EPS between $0.82 and $0.90. These estimates exclude acquisition, integration, or strategic planning expenses Q3 2025 Financial Estimates | Metric | Low Estimate | High Estimate | | :-------------------------- | :------------------- | :------------------- | | Revenues | $992.0 million | $1,012.0 million | | SG&A expenses | $206.5 million | $210.5 million | | Amortization of intangible assets | $16.6 million | $16.6 million | | Net income | $35.8 million | $39.4 million | | Earnings per diluted share | $0.82 | $0.90 | | Gross margin | 29.3 % | 29.6 % | | Effective tax rate | 28.0 % | 28.0 % | | Adjusted EBITDA | $108.5 million | $113.5 million | | Adjusted Net Income | $51.7 million | $55.4 million | | Adjusted Net Income per diluted share | $1.18 | $1.26 | | Adjusted EBITDA margin | 10.9 % | 11.2 % | [Billable Days Impact](index=3&type=section&id=Billable%20Days%20Impact) The financial estimates for Q3 2025 are based on 63.50 billable days, which is consistent with the prior year period and slightly more than the second quarter of 2025 - There are **63.50 Billable Days** in the third quarter of 2025, which is equal to the year ago period, and **0.25 more days** than the second quarter of 2025[14](index=14&type=chunk) Company Information & Legal Disclosures [Conference Call Details](index=4&type=section&id=Conference%20Call) ASGN held a conference call on July 23, 2025, to discuss its Q2 2025 financial results and provide Q3 2025 estimates. A replay of the call is available until August 6, 2025 - The Company held a conference call on July 23, 2025, at 4:30 p.m. ET to review its financial results for the second quarter of 2025 and to provide third quarter 2025 estimates[16](index=16&type=chunk) - A replay of the conference call will be available beginning today at 7:30 p.m. ET until August 6, 2025[17](index=17&type=chunk) [About ASGN Incorporated](index=4&type=section&id=About%20ASGN%20Incorporated) ASGN Incorporated is a leading provider of IT services and solutions for both commercial and government sectors, assisting organizations in developing, implementing, and operating critical IT and business solutions - ASGN Incorporated (NYSE: ASGN) is a leading provider of IT services and solutions to the commercial and government sectors[18](index=18&type=chunk) - ASGN helps corporate enterprises and government organizations develop, implement, and operate critical IT and business solutions through its integrated offerings[18](index=18&type=chunk) [Safe Harbor Statement](index=4&type=section&id=Safe%20Harbor) This news release contains forward-looking statements that involve significant risks and uncertainties, meaning actual results could differ materially from projections. The company explicitly disclaims any obligation to update these forward-looking statements - Certain statements made in this news release are 'forward-looking statements' within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and involve a high degree of risk and uncertainty[19](index=19&type=chunk) - Forward-looking statements are not guarantees of future performance and actual results might differ materially[20](index=20&type=chunk) - We specifically disclaim any intention or duty to update any forward-looking statements contained in this news release[20](index=20&type=chunk) Consolidated Financial Statements (Unaudited) [Consolidated Statements of Operations](index=5&type=section&id=Results%20of%20Operations) This section presents the unaudited consolidated results of operations for the three and six months ended June 30, 2025, and 2024, detailing revenues, costs of services, gross profit, operating expenses, and net income Consolidated Statements of Operations (Unaudited) | Metric (In millions, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Three Months Ended March 31, 2025 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :-------------------------------- | :----------------------------- | :----------------------------- | | Revenues | $1,020.6 | $1,034.7 | $968.3 | $1,988.9 | $2,083.7 | | Costs of services | 727.3 | 733.6 | 692.9 | 1,420.2 | 1,486.4 | | Gross profit | 293.3 | 301.1 | 275.4 | 568.7 | 597.3 | | Selling, general, and administrative expenses | 216.8 | 205.6 | 214.5 | 431.3 | 415.8 | | Amortization of intangible assets | 16.9 | 15.1 | 14.3 | 31.2 | 30.2 | | Operating income | 59.6 | 80.4 | 46.6 | 106.2 | 151.3 | | Interest expense | (18.2) | (15.8) | (15.4) | (33.6) | (33.4) | | Income before income taxes | 41.4 | 64.6 | 31.2 | 72.6 | 117.9 | | Provision for income taxes | 12.1 | 17.4 | 10.3 | 22.4 | 32.6 | | Net income | $29.3 | $47.2 | $20.9 | $50.2 | $85.3 | | Earnings per share: Basic | $0.67 | $1.03 | $0.48 | $1.15 | $1.85 | | Earnings per share: Diluted | $0.67 | $1.02 | $0.48 | $1.14 | $1.83 | | Number of shares and share equivalents used to calculate earnings per share: Basic | 43.8 | 45.7 | 43.7 | 43.8 | 46.1 | | Number of shares and share equivalents used to calculate earnings per share: Diluted | 44.0 | 46.1 | 44.0 | 44.0 | 46.5 | [Consolidated Statements of Cash Flow](index=6&type=section&id=Summary%20Statements%20of%20Cash%20Flow%20Data) This section provides unaudited consolidated cash flow data for the three and six months ended June 30, 2025, and 2024, detailing cash flows from operating, investing, and financing activities, along with Free Cash Flow Summary Statements of Cash Flow Data (Unaudited) | Metric (In millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Three Months Ended March 31, 2025 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :-------------------------------- | :----------------------------- | :----------------------------- | | Cash provided by operating activities | $124.9 | $90.7 | $16.8 | $141.7 | $164.0 | | Cash used in investing activities | (9.1) | (5.2) | (316.3) | (325.4) | (16.0) | | Cash provided by (used in) financing activities | (84.9) | (110.7) | 201.2 | 116.3 | (190.7) | | Capital expenditures | (9.1) | (5.3) | (10.2) | (19.3) | (16.1) | | Free Cash Flow (non-GAAP measure) | $115.8 | $85.4 | $6.6 | $122.4 | $147.9 | [Consolidated Balance Sheets](index=6&type=section&id=Summary%20Balance%20Sheet%20Data) This section presents unaudited consolidated balance sheet data as of June 30, 2025, and December 31, 2024, providing a snapshot of the company's assets, liabilities, and stockholders' equity Summary Balance Sheet Data (Unaudited) | Metric (In millions) | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :-------------- | :---------------- | | Cash and cash equivalents | $138.9 | $205.2 | | Working capital | 481.7 | 550.6 | | Goodwill and intangible assets, net | 2,628.5 | 2,332.9 | | Total assets | 3,715.0 | 3,429.0 | | Long-term debt | 1,211.7 | 1,033.5 | | Total liabilities | 1,888.2 | 1,652.3 | | Total stockholders' equity | 1,826.8 | 1,776.7 | Non-GAAP Financial Measures [Reconciliation of GAAP to Non-GAAP Measures (Q2 2025)](index=7&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measure) This section provides detailed reconciliations of GAAP net income to various non-GAAP measures, including EBITDA, Adjusted EBITDA, and Adjusted Net Income, for the three and six months ended June 30, 2025, and 2024 Reconciliation of Net Income to Adjusted EBITDA (Unaudited) | Metric (In millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Three Months Ended March 31, 2025 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :-------------------------------- | :----------------------------- | :----------------------------- | | Net income | $29.3 | $47.2 | $20.9 | $50.2 | $85.3 | | Interest expense | 18.2 | 15.8 | 15.4 | 33.6 | 33.4 | | Provision for income taxes | 12.1 | 17.4 | 10.3 | 22.4 | 32.6 | | Depreciation and other amortization | 11.8 | 9.4 | 11.2 | 23.0 | 18.8 | | Amortization of intangible assets | 16.9 | 15.1 | 14.3 | 31.2 | 30.2 | | EBITDA (non-GAAP measure) | 88.3 | 104.9 | 72.1 | 160.4 | 200.3 | | Stock-based compensation | 11.9 | 11.0 | 13.8 | 25.7 | 22.7 | | Acquisition, integration, and strategic planning expenses | 8.3 | 1.2 | 3.3 | 11.6 | 2.4 | | Software costs write-off | — | — | 4.4 | 4.4 | — | | Adjusted EBITDA (non-GAAP measure) | $108.5 | $117.1 | $93.6 | $202.1 | $225.4 | Reconciliation of Net Income to Adjusted Net Income (Unaudited) | Metric (In millions, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Three Months Ended March 31, 2025 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :-------------------------------- | :----------------------------- | :----------------------------- | | Net income | $29.3 | $47.2 | $20.9 | $50.2 | $85.3 | | Acquisition, integration, and strategic planning expenses | 8.3 | 1.2 | 3.3 | 11.6 | 2.4 | | Software costs write-off | — | — | 4.4 | 4.4 | — | | Credit facility amendment expenses | — | — | — | — | 1.5 | | Tax effect on adjustments | (2.2) | (0.3) | (1.9) | (4.1) | (1.0) | | Non-GAAP net income | 35.4 | 48.1 | 26.7 | 62.1 | 88.2 | | Amortization of intangible assets | 16.9 | 15.1 | 14.3 | 31.2 | 30.2 | | Other | (0.7) | (0.6) | (0.6) | (1.3) | (1.2) | | Adjusted Net Income (non-GAAP measure) | $51.6 | $62.6 | $40.4 | $92.0 | $117.2 | | Per diluted share: Net income | $0.67 | $1.02 | $0.48 | $1.14 | $1.83 | | Per diluted share: Adjustments | 0.50 | 0.34 | 0.44 | 0.95 | 0.69 | | Adjusted Net Income (non-GAAP measure) | $1.17 | $1.36 | $0.92 | $2.09 | $2.52 | | Common shares and share equivalents (diluted) | 44.0 | 46.1 | 44.0 | 44.0 | 46.5 | [Reconciliation of Estimated GAAP to Non-GAAP Measures (Q3 2025)](index=8&type=section&id=FINANCIAL%20ESTIMATES%20FOR%20THE%20THIRD%20QUARTER%20OF%202025%20RECONCILIATIONS%20OF%20ESTIMATED%20GAAP%20TO%20NON-GAAP%20MEASURES) This section provides reconciliations of estimated GAAP net income to estimated non-GAAP measures, including Adjusted EBITDA and Adjusted Net Income, for the third quarter of 2025 Reconciliation of Estimated Net Income to Adjusted EBITDA (Q3 2025) | Metric (In millions) | Low Estimate | High Estimate | | :------------------------------------------ | :------------- | :-------------- | | Net income | $35.8 | $39.4 | | Interest expense | 17.7 | 17.7 | | Provision for income taxes | 14.1 | 15.5 | | Depreciation and other amortization | 12.2 | 12.2 | | Amortization of intangible assets | 16.6 | 16.6 | | EBITDA (non-GAAP measure) | 96.4 | 101.4 | | Stock-based compensation | 12.1 | 12.1 | | Adjusted EBITDA (non-GAAP measure) | $108.5 | $113.5 | Reconciliation of Estimated Net Income to Adjusted Net Income (Q3 2025) | Metric (In millions, except per share data) | Low Estimate | High Estimate | | :------------------------------------------ | :------------- | :-------------- | | Net income | $35.8 | $39.4 | | Amortization of intangible assets | 16.6 | 16.6 | | Other | (0.7) | (0.6) | | Adjusted Net Income (non-GAAP measure) | $51.7 | $55.4 | | Per diluted share: Net income | $0.82 | $0.90 | | Per diluted share: Adjustments | 0.36 | 0.36 | | Adjusted Net Income (non-GAAP measure) | $1.18 | $1.26 | [Definitions of Non-GAAP Measures](index=9&type=section&id=Non-GAAP%20Financial%20Measures) This section defines ASGN's non-GAAP financial measures, including EBITDA, Adjusted EBITDA, Adjusted Net Income, Free Cash Flow, Commercial consulting bookings, Federal Government Segment new contract awards, and Revenues on a Same Billable Days basis, explaining their purpose in evaluating core business performance - Non-GAAP financial measures (EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, Adjusted Net Income per diluted share, Free Cash Flow, and Revenues on a same Billable Days basis) are provided as additional information to enhance the overall understanding of the Company's current financial performance and not as an alternative to GAAP statements[28](index=28&type=chunk) - EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin focus on core business performance by removing non-operating and certain non-cash expenses[29](index=29&type=chunk) - Commercial consulting bookings are defined as the value of new contracts entered into during a specified period, including adjustments for changes in contract scope and terminations[32](index=32&type=chunk)

Core Viewpoint - ASGN Inc is expected to report a year-over-year decline in earnings and revenues for the quarter ended June 2025, with the actual results being crucial for stock price movement [1][2]. Earnings Expectations - The upcoming earnings report is anticipated to show quarterly earnings of $1.08 per share, reflecting a year-over-year decrease of 20.6% [3]. - Revenues are projected to be $991.41 million, down 4.2% from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised 0.84% lower in the last 30 days, indicating a reassessment by analysts [4]. - A positive Earnings ESP of +1.24% suggests recent bullish sentiment among analysts, despite the stock holding a Zacks Rank of 4, complicating predictions of an earnings beat [12]. Earnings Surprise History - In the last reported quarter, ASGN Inc was expected to post earnings of $0.95 per share but delivered $0.92, resulting in a surprise of -3.16% [13]. - Over the past four quarters, the company has beaten consensus EPS estimates three times [14]. Conclusion - While ASGN Inc does not appear to be a strong candidate for an earnings beat, investors should consider other factors influencing stock performance ahead of the earnings release [17].

Financial Performance & Metrics - ASGN's TTM revenue is $4 billion[7], with free cash flow of $308.8 million[7] and adjusted EBITDA of $437.3 million[8] - Q1 2025 revenue was $968.3 million[34], a decrease compared to $1,049.0 million in Q1 2024[34], representing a -7.7% change[63] - Q1 2025 Adjusted EBITDA was $93.6 million[34] with a margin of 9.7%[34], compared to $108.3 million and 10.3% in Q1 2024[34] - The company estimates Q2 2025 revenues between $985.0 million and $1,015.0 million[36], representing a year-over-year revenue change of -4.8% to -1.9%[36] Segment Performance - Commercial segment revenue in Q1 2025 was $672.2 million[47], with consulting revenue contributing $290.1 million[47] - Federal segment revenue in Q1 2025 was $296.1 million[53], a decrease of -6.7% year-over-year[53] - The federal segment's funded backlog as of March 31, 2025, was $501.2 million[56], with an unfunded backlog of $2,664.4 million[56] Strategic Initiatives - ASGN acquired TopBloc, with estimated revenues of $150 million for full year 2025 and adjusted EBITDA margins in the high teens[29] - The company has a $750 million share repurchase plan[27] - IT consulting accounted for 61% of revenues as of Q1 2025[39]

Summary of ASGN Conference Call Company Overview - ASGN operates in the IT services sector with approximately $4 billion in revenues, primarily in the US [3] - The company serves large enterprise accounts, with 70% of revenue from Fortune 500 clients across various industries, including financials, consumer, industrials, TMT, and business services [3] - About 30% of revenue comes from the federal government, mainly serving the Department of Defense, National Intelligence, and Department of Homeland Security [3] Core Business Insights - ASGN has a diverse account portfolio, which provides stability and resilience in varying economic conditions [4] - The company is transitioning from IT staffing to higher-value consulting services, which is expected to drive strategic growth [6] - ASGN's flexible cost structure and strong free cash flow allow for strategic acquisitions and investments [4][12] Financial Performance - The company has a gross margin structure influenced by business mix, with government segments typically having lower margins compared to commercial consulting [8] - ASGN achieved an EBITDA margin target of 12-12.5% within 18 months, driven by growth in commercial consulting [20] - Free cash flow conversion from EBITDA is between 60-65%, with a balanced capital allocation strategy focusing on organic growth, share repurchase, and M&A [11][12] Market Dynamics - Clients are cautious about discretionary spending due to macroeconomic uncertainties, impacting IT investment decisions [22][25] - There is a noted increase in business confidence post-election, leading to improved bookings in commercial consulting and federal spaces [24] - The demand for IT services is driven by the need for AI, data modernization, application development, and cybersecurity [36] Strategic Initiatives - ASGN's acquisition of TopLock enhances its capabilities within the Workday ecosystem, targeting medium enterprises [18][19] - The company is focusing on integrating AI and cloud services into its offerings while managing investments based on market conditions [30][31] - ASGN is positioned to leverage its technical expertise in AI and data to meet client needs, despite the current cautious environment [27][34] Government Segment Insights - The federal government accounts for about 30% of ASGN's revenue, with a significant portion from defense-related contracts [38] - Recent shifts in government spending focus on defense and technology, with ongoing discussions about improving efficiency and outcomes in federal contracts [39] - Strong bookings in the government sector indicate potential future revenue growth, despite slower conversion rates from bookings to revenue [43] Conclusion - ASGN is strategically positioned to capitalize on the evolving IT landscape, focusing on high-margin consulting services and leveraging its expertise in emerging technologies like AI and cloud computing [17][26] - The company remains vigilant in monitoring macroeconomic indicators that could influence client spending and investment in technology [44]

Leadership Transition - SmartBug Media announced a strategic leadership transition, promoting Adam Bleibtreu to CEO effective July 1, 2025, while founder Ryan Malone will remain as chairman of the board [1][4] - Bleibtreu has extensive executive experience and has been instrumental in overseeing SmartBug's strategic direction and growth initiatives [2][5] Executive Background - Adam Bleibtreu previously served as CMO at ASGN Incorporated, where he contributed to the company's revenue growth from $2.2 billion to over $4 billion through strategic acquisitions and organic growth [3] - His leadership experience spans various sectors, including technology, staffing, and digital marketing, positioning him well to lead SmartBug's mission [3] Company Vision and Strategy - Malone emphasized the importance of handing leadership to someone with the right skills and experience, highlighting Bleibtreu's client-centric approach and vision for the company [3] - Bleibtreu expressed excitement about leading SmartBug at a pivotal moment, focusing on the intersection of client needs, marketing technologies, and digital transformation [5] Company Recognition - SmartBug Media has been recognized as HubSpot's 2024 North American Partner of the Year and is a top-performing Elite Global Solutions Partner [5][7]

Financial Performance - Revenues for Q1 2025 were $968.3 million, a decrease of 7.7% compared to $1,049.0 million in Q1 2024[8] - Gross profit for Q1 2025 was $275.4 million, down from $296.2 million in Q1 2024, reflecting a gross margin of 28.5%[8] - Net income for Q1 2025 was $20.9 million, a decline of 45.0% from $38.1 million in Q1 2024, resulting in earnings per share of $0.48[8] - The company reported a comprehensive income of $21.7 million for Q1 2025, compared to $37.9 million in Q1 2024[8] - Basic earnings per share for the three months ended March 31, 2025, were $0.48, compared to $0.82 for the same period in 2024, reflecting a decrease of approximately 41.5%[25] - Operating income decreased to $46.6 million in Q1 2025, a decline of 34.2% from $70.9 million in Q1 2024[8] - The Company reported a segment operating income of $74.9 million for the three months ended March 31, 2025, compared to $91.8 million for the same period in 2024, a decrease of approximately 18.4%[27] Assets and Liabilities - Total assets increased to $3,698.4 million as of March 31, 2025, compared to $3,429.0 million at December 31, 2024[7] - Long-term debt rose to $1,282.6 million as of March 31, 2025, up from $1,033.5 million at the end of 2024[7] - Long-term debt as of March 31, 2025, totaled $1,282.6 million, an increase from $1,033.5 million as of December 31, 2024[18] - The Company has $550.0 million of unsecured senior notes due in 2028, bearing interest at 4.625% payable semiannually[20] Acquisition Details - The company completed the acquisition of TopBloc, LLC for $340.0 million, with 90% paid in cash and 10% in equity[14] - The preliminary fair value of identifiable intangible assets from the TopBloc acquisition is estimated at $78.9 million, with goodwill of $245.9 million[14] - Goodwill balance as of March 31, 2025, is $2,139.5 million, reflecting an increase from $1,893.1 million as of December 31, 2024, primarily due to the acquisition of TopBloc for $245.9 million[15] - Goodwill from the TopBloc acquisition is estimated at $245.9 million, with approximately $215.6 million deductible for income taxes[14] Cash Flow - Cash and cash equivalents decreased to $107.0 million at the end of Q1 2025, down from $205.2 million at the beginning of the year[11] - Net cash provided by operating activities was $16.8 million in Q1 2025, significantly lower than $73.3 million in Q1 2024[11] Segment Performance - The Commercial Segment generated revenues of $672.2 million for the three months ended March 31, 2025, while the Federal Government Segment contributed $296.1 million[27] - The Company’s Federal Government Segment revenues from the Department of Defense and Intelligence Agencies were $128.9 million for the three months ended March 31, 2025, down from $150.1 million in 2024[30] - The Federal Government Segment generated revenues of $296.1 million for the three months ended March 31, 2025, down from $317.5 million in the same period of 2024, a decrease of approximately 6.5%[30] - The Commercial Segment's consulting revenues increased to $290.1 million for the three months ended March 31, 2025, compared to $277.0 million in the same period of 2024, reflecting a growth of 4.5%[27] Compliance and Future Expenses - The Company is in compliance with its debt covenants, with a maximum ratio of senior secured debt to trailing-twelve-months consolidated EBITDA of 1.64 to 1 as of March 31, 2025[19] - Estimated future amortization expense for identifiable intangible assets totals $199.2 million, with the highest expense of $54.1 million expected in 2026[17]