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- **Revenue Growth**: Q3 2025 revenue $1.01B, IT consulting at 63% of total. Commercial consulting up 17.5% YoY.
- **AI Momentum**: 70% of AI projects require platform integration; ASGN accelerators reduce timelines by 25%.
- **Financial Strength**: Adjusted EBITDA $112.6M (11.1% margin); free cash flow $72M. Q4 guidance cautious on Federal due to shutdown.
- **Strategic Positioning**: Benefits from H-1B tightening; leading in data/AI, application development, and federal defense work.
- **Risks**: Softness in staffing; potential delays in Federal awards from government shutdown.

**【CEO Summary Section】**
- Q3 2025 revenue reached $1.01 billion, with IT consulting contributing 63% (up from 58% YoY). Commercial consulting revenue grew 17.5% YoY to $334.9 million.
- Bookings: Commercial consulting at 1.2x TTM book-to-bill; Federal segment awards $461 million (1x TTM). Federal backlog $3.1 billion (2.6x TTM coverage).
- AI investment highlights: 70% of client AI projects require deep platform integration; ASGN's accelerators reduce project timelines by 25%.
- H-1B visa impact: Tighter regulations favor onshore/nearshore delivery, aligning with ASGN's capabilities.

**【President's Industry & Project Insights】**
- **Commercial Performance**: Consumer/industrial up mid-teens YoY; healthcare +high single digits YoY. Sequential growth in healthcare, consumer/industrial, TMT.
- **Federal Segment**: Defense/intel 70% of revenues; DHS projects drive 12% YoY growth. Federal bookings 1.5x Q3 2025.
- **Key Projects**: Fortune 500 data platform modernization (Databricks, AWS), FBI DNA analytics, crop insurance modernization (3-year $376M contract).

**【CFO Financial Commentary】**
- Q3 2025: GAAP net income $38.1M, adjusted EBITDA $112.6M (11.1% margin). Free cash flow $72M (64% conversion).
- Margins: Commercial segment 33.2% (up 40bps YoY); Federal 20.3% (down 40bps YoY). SG&A $212.2M (+2.3% YoY).
- Q4 Guidance: Revenue $960M-$980M; adjusted EBITDA $102M-$107M (10.6%-10.9% margin). Share buybacks $46M Q3, $423M remaining.

**【Q&A Highlights】**
- **Government Shutdown**: Minimal impact to date; cautious on Q4 Federal bookings due to award delays.
- **AI ROI Challenges**: 70% of projects require enterprise platform integration; ASGN's accelerators reduce risk/time-to-value.
- **Competitive Dynamics**: Pricing stable in consulting; staffing faces headwinds as clients prioritize outcomes over augmentation.
- **One Big Beautiful Bill**: Defense funding increases expected to flow into 2026 revenues via new contracts.
- **Accelerators Pricing**: Exploring standalone pricing for AI tools like Pathfinder, but early days.

ASGN Incorporated (ASGN) Q3 2025 Earnings Call Transcript

- **Revenue Growth**: Q2 revenue of $1.02 billion exceeded guidance, with IT consulting at 63% of total.
- **AI Strategy**: Launched AI Innovation Center with accelerators like financial services agents and code discovery tools.
- **Federal Backlog**: $2.9 billion in new federal contracts, despite DOGE-related delays.
- **Financial Performance**: Adjusted EBITDA of $108.5 million (10.6% margin); free cash flow conversion at 107%.
- **Q3 Guidance**: Revenue $992-1,012 million; adjusted EBITDA $108.5-113.5 million.
- **TopBloc Update**: Tracking ahead of $150 million annual target with strong EBITDA margins.


**【Management Opening Remarks】**
- ASGN reported Q2 2025 revenue of $1.02 billion, above the high end of guidance, with adjusted EBITDA margin of 10.6%.
- IT consulting revenue grew to 63% of total revenue, up from 57% year-over-year, driven by demand for cloud, data, and AI solutions.
- Commercial consulting bookings reached $417.5 million (1.2x book-to-bill), while federal bookings were $72 million (1.1x book-to-bill).

**【CEO Summary Section】**
- Emphasized AI as a growth driver, with ASGN's AI Innovation Center developing accelerators like financial services agents and rapid code discovery tools.
- Federal government business remains resilient despite DOGE delays, with $2.9 billion in new federal backlog.
- Announced an Investor Day in Q4 to discuss long-term strategy and growth opportunities.

**【President (Shiv Iyer) Segment】**
- Commercial segment performance: Consumer & industrial verticals grew mid-double digits YoY, while healthcare and financial services were flat or declining.
- Federal government revenue split: 72% from defense/intelligence, 14% from national security, and 14% from civilian accounts.
- Key wins included Workday implementations for insurance and construction clients, and ServiceNow GenAI deployments for a video game company.

**【CFO Financial Commentary】**
- Q2 GAAP net income: $29.3 million; adjusted EBITDA: $108.5 million (10.6% margin).
- Commercial segment gross margin: 33.0% (up 30bps YoY); federal gross margin: 19.2% (down 140bps YoY due to low-margin software licenses).
- Free cash flow: $115.8 million (107% of adjusted EBITDA), with $9.5 million used for share buybacks.
- Q3 2025 guidance: Revenue $992-1,012 million; adjusted EBITDA $108.5-113.5 million (10.9-11.2% margin).

**【Q&A Key Highlights】**
- **TopBloc Performance**: Tracking ahead of $150 million annual revenue target, with EBITDA margins in the high teens.
- **AI Impact on Assignment Business**: No material disruption; cyclicality remains the primary driver of softness.
- **Federal Government Margins**: Expect 20-21% gross margin range, with potential for improvement via direct labor growth.
- **Internal AI Use**: Enhancing productivity in recruiting, proposal generation, and cybersecurity threat detection.


ASGN Incorporated (ASGN) Q2 2025 Earnings Call Transcript

- **Resilient Q1 Performance**: Revenue in line with guidance ($968.3M), with Commercial consulting up 4.7% YoY and Federal bookings at 1.2x book-to-bill.
- **AI and Cloud Growth Drivers**: TopBloc acquisition (Workday services) exceeded expectations, while Gen AI projects (e.g., supply chain optimization) demonstrate client demand for cost-saving solutions.
- **Federal Segment Resilience**: Despite DOGE-related revenue decline, new contract awards ($343.1M) and focus on IT modernization (e.g., FBI cloud integration) highlight strategic positioning.
- **Margin Strength**: Adjusted EBITDA margin of 9.7% with 20bps gross margin improvement; Q2 guidance reflects cautious macro outlook but maintains 10.3%-10.6% margin target.
- **Shareholder Returns**: $50.4M in share buybacks (0.6M shares) with $478.6M remaining under $750M authorization.
- **Risks & Opportunities**: DOGE impact <2% of revenue; Mexico nearshore growth as cost-effective AI/cloud delivery model.

**【CEO Summary Section】**
- Q1 2025 revenue of $968.3 million, in line with guidance, with Commercial segment consulting up 4.7% YoY and Federal bookings at 1.2x book-to-bill.
- AI and data solutions drove growth, with examples including supply chain optimization using Gen AI and cloud-based automation for banking clients.
- Federal government segment saw strong new contract awards ($343.1M) despite DOGE-related revenue decline, with focus on IT modernization and cybersecurity.
- Acquisition of TopBloc (Workday services) exceeded early bookings and revenue expectations, contributing to long-term AI and cloud strategy.

**【CFO Financial Commentary】**
- GAAP net income of $20.9M; adjusted EBITDA of $93.6M (9.7% margin), in line with guidance.
- Gross margin improved 20bps to 28.4%, driven by higher consulting mix (61% of total revenue vs 57% YoY).
- SG&A expenses declined $6M YoY (excluding one-time items), reflecting cost control.
- Q2 2025 guidance: revenue $985M-$1.015B, adjusted EBITDA $101M-$108M (10.3%-10.6% margin), with DOGE impact <2% of total revenue.
- Free cash flow of $6.6M (lower due to DSO timing), with $478.6M remaining under $750M share repurchase authorization.

**【Q&A Key Takeaways】**
- **DOGE Impact**: Federal segment revenue down 6.7% YoY, primarily from lower-margin program management work; Defense and Intel work remained stable.
- **TopBloc Contribution**: Acquired March 4, contributed <1 month to Q1 results; tracking ahead of bookings and EBITDA targets.
- **Margins**: Q2 gross margin may face pressure from DOGE-related federal work loss, but consulting mix and cost control will offset.
- **Client Sentiment**: Commercial clients cautious on IT spend but prioritizing AI, cybersecurity, and cloud; Federal agencies focused on efficiency and modernization.
- **Mexico Nearshore**: Growing as cost-effective solution, integrated with AI and cloud projects to deliver value despite macro uncertainty.

**【New Leadership Insights】**
- **Shiv Iyer (President)**: Emphasized ASGN's contingent labor model as optimal for rapid tech evolution, with focus on high-value AI, data, and cybersecurity solutions.
- **Rand Blazer ( EVP)**: Highlighted ASGN's mission-critical federal work (e.g., FBI IT modernization) and resilience to DOGE through focus on technical execution and outcomes.


ASGN (ASGN)-23 Apr 25-2025 Q1 Earnings call transcript

- **Revenue Mix Shift**: IT consulting now 58% of total revenue, up from 53%, signaling strategic pivot to high-margin services.
- **Key Metrics**: Q4 commercial consulting bookings +6% YoY to $348.2M; book-to-bill ratio 1.2x.
- **Strategic Acquisitions**: TopBloc acquisition bolsters cloud migration expertise; leadership refresh with Shiv Iyer from Accenture.
- **Growth Drivers**: TMT (e-commerce, media) and Consumer/Industrial (utilities, consumer staples) verticals show strongest momentum.
- **Differentiation**: Unique GRC practice combines commercial and government cybersecurity to serve enterprise clients.

**CEO Summary Section**
- **Revenue Composition**: IT consulting revenue accounted for 58% of total 2024 revenue, up from 53% in 2023, reflecting strategic focus on high-value services.
- **Q4 Performance**: Despite slightly below-expected revenue, gross and adjusted EBITDA margins exceeded expectations. Commercial consulting bookings grew 6% YoY to $348.2M, with a book-to-bill ratio of 1.2x.
- **Strategic Initiatives**: 
  - Announced acquisition of TopBloc, a Workday services partner, to enhance cloud migration capabilities.
  - Leadership transition: Rand Blazer moving to Executive Vice Chairman; Shiv Iyer (from Accenture) joining as new executive.
- **Industry Verticals**: 
  - **TMT**: E-commerce and Media & Entertainment drove mid-single-digit growth.
  - **Consumer & Industrial**: Utilities and Consumer Staples saw double-digit growth; Healthcare vertical achieved low-single-digit expansion.
  - **Financial Services**: Big banks and Fintech showed low-single-digit improvement.
- **Client Success Stories**: 
  - Migrated freight company's 25-year legacy system to AWS, positioning for AI adoption.
  - Assisted medical tech company in achieving HITRUST certification through GRC practice.

**Leadership & Pipeline**: 
- Expanding pipeline reflects participation in clients' long-term IT strategies; double-digit growth in commercial consulting bookings highlights demand for ASGN's AI, cybersecurity, and data solutions.
- 2025 Outlook: Improved business confidence but IT spending turnaround expected to lag, with focus on AI, cybersecurity, and data infrastructure solutions.

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