ASGN rporated(US:ASGN)2025-04-23 23:27Financial Data and Key Metrics Changes - Revenues totaled $968.3 million, a decrease of 7.7% year over year, in line with guidance expectations [31] - Adjusted EBITDA margin was 9.7% for the quarter [8][34] - Net income for the quarter was $20.9 million [34] - Free cash flow totaled $6.6 million, lower than typical due to an increase in Days Sales Outstanding (DSO) [36] Business Line Data and Key Metrics Changes - Revenues from the commercial segment were $672.2 million, a decrease of 8.1% year over year [31] - Assignment revenue totaled $382.1 million, a decrease of 16% year over year [31] - Commercial consulting revenues, the highest margin stream, totaled $290.1 million, an increase of 4.7% year over year [31] - Federal government segment revenues were $296.1 million, a decrease of 6.7% year over year [31] Market Data and Key Metrics Changes - Consulting bookings for the commercial segment were $336.9 million, improving 4.2% compared to the first quarter of 2024 [13] - Book-to-bill ratio was 1.2 times for both commercial and federal segments [12][24] - Contract backlog for the federal government segment was over $3.1 billion, with a coverage ratio of 2.6 times trailing twelve-month revenues [24] Company Strategy and Development Direction - The company aims to nurture long-standing client relationships and expand technology partnerships, focusing on IT modernization and efficiency [11] - The acquisition of TopBloc is expected to enhance solution capabilities and drive future growth [10][42] - The company is committed to providing high-value IT services while maintaining a flexible cost structure [10] Management's Comments on Operating Environment and Future Outlook - Management noted that while macroeconomic uncertainty persists, there is confidence in the company's unique business model and its ability to adapt [41] - Clients remain cautious about increasing IT spending, but demand for AI and data solutions continues to grow [9][15] - The company expects to see improvements in DSO and is cautiously optimistic about future revenue guidance [36][38] Other Important Information - SG&A expenses for the quarter were $214.5 million, including one-time costs related to acquisition and software write-offs [33] - The company repurchased approximately 0.6 million shares at an average price of $78.44, with $478.6 million remaining under the share repurchase authorization [35] Q&A Session Summary Question: Can you characterize bookings across different businesses? - Management indicated a mix of renewal and new work, with renewal being a larger percentage [52] Question: What is the impact of DOGE on the federal business? - The impact has been more on the civilian side rather than defense, with some interruptions in traditional management consulting work [55] Question: How have margins been maintained? - Margins have improved due to a higher mix of consulting work and the addition of capabilities like TopBloc [66] Question: What is the visibility on client projects? - Clients are in a cautious wait-and-see mode regarding new projects, influenced by macroeconomic factors [73] Question: How much did TopBloc contribute to Q1 results? - TopBloc's contribution was immaterial as it was only included for a few weeks in March [78] Question: What is the velocity of adjudications in relation to DOGE? - The velocity of adjudications is less visible, with agencies ensuring alignment on contract decisions [130]