ASGN - Earnings call transcript Q4 2024

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings, and welcome to the ASGN Incorporated Fourth Quarter and Full Year 2024 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions].

It is now my pleasure to introduce your host, Kimberly Esterkin, Investor Relations. you. Thank

begin. may You

Kimberly Esterkin

Marie you Year us me XXXX Executive President; Hanson, Thank Officer. Fourth are for Quarter Chief and Blazer, Rand Full Conference Officer; Chief for afternoon. Financial today joining ASGN's Ted Perry, Good Call. With

would started, our to remind Before commentary I everyone forward-looking contains we like get statements. that

these and are from these actual results our to in statements believe are this those we on release our such, Certain reasonable, they and call. uncertainties any statements subject update SEC do differ as materially risks to today's press Although filings. made are obligation risks described not statements. of and and uncertainties, in could assume We

our For remarks be supplemental your in can our materials and prepared at website investors.asgn.com. section the convenience, of found Investor Relations

be intended that cash this comparable supplement non-GAAP release. adjusted also certain we adjusted in today's are will free GAAP net Reconciliations measures such GAAP income, press Please measures to call, measures, non-GAAP referencing and as non-GAAP EBITDA, between are the included measures. These on flow. note

will over Hanson, Executive Officer. to turn call I Chief Ted the now

Theodore Hanson

Kim, Earnings you, thank Thank Fourth joining Call. Year Full you Quarter and ASGN's and XXXX for

higher-end, remain is IT we XXXX, consulting business consulting high-value of towards to commitment advancing solutions. This Throughout reflected IT growth ASGN's the in committed our revenues.

IT from XX% in roughly the For commercial year XX% up revenues, and consulting both year, revenues from approximately the the total government sectors of comprised period. prior

in our has participation quarter expectations. long-term of IT continued expectations, work fourth year-over-year highlight margins, below was our the was our our QX While clients' adjusted underscores in consulting in slightly commercial Double-digit constrained, expand. pipeline IT budgets gross Despite the EBITDA strategies. bookings growth once quarter revenue the which to exceeded remaining of again and

To and aligned our business we although materialize. deep believe and transition enterprise federal remain has key in needs closely differentiation. demand services we to in confidence, relationships Maintaining in see data. with are areas strategic improvement with yet into our IT government to the agencies and for defense to IT meet anticipated AI, we Fortune spending As essential turnaround and beginning such is an solutions and growing we XXXX customers, positioning customer understanding their market ASGN's accordingly cybersecurity intelligence key as XXXX

important underpinnings our depth and of strategy Also is long-term to leadership the driving of team. the breadth our

executive Rand part As Iyer, transition as President, to succession, who our us well planned Vice announced Shiv role will Rand's to commitment later newest as this our Blazer, on of today's the of addition, recently Accenture March. I'll that company a team we be Chairman elaborate call. joining Executive continued our welcome will in from

forward-thinking tuck-in core the leadership team's organic to consulting enhancing growth. are acquisitions Beyond successful our

yesterday, shortly, We I'll segment acquisition performance strategy for Services just continued the the in quarter. definitive certified agreement M&A let's our to discuss efforts our preferred Partner. TopBloc, first, but Workday announcing acquire TopBloc the behind turn to XXXX our

at X.Xx Our year-over-year. and which quarter mid-market driven put a of trailing our in Consulting on XX-month for Commercial again for X.Xx were business, the Segment bookings $XXX.X Revenues book-to-bill services XXXX consulting our the segment growth improved large companies. by million X% and basis. Fortune

bookings to consulting continues grow strong work each reflection our relationships, Although new renewals, our weighted a remained client of quarter. towards

mid-single-digit in Industrial Discretionary Consumer accounts. accounts Entertainment quarter, e-Commerce with Consumer low utilities accounts. Consumer by led fourth led industry single improved mid-single improved by and Industrial perspective, also and compared low digits of driven compared vertical for quarter growth by & and the material growth along & Media as single year digits for Improvement full TMT year. an revenues the improved growth & improvement to were Staples the quarter verticals. accounts TMT was in digits From in the The our prior Consumer and and XXXX in double-digit TMT to

year-over-year While digits banks, basis. and on services the billable a Diversified low improved the day-adjusted Big single vertical within Financials financial declined all Fintech vertical,

spenders this the the the As is on Services right Financial IT, clients largest move improvement direction. one our vertical, within a in of Big especially Banking amongst

On Consumer & quarter, digits the low and a X.X days adjusting for single fewer the in Consumer growth basis, Staples, billable sequential Utility, improved sectors. Industrial Industrial the Consumer accounts Discretionary, with in

and also on advancements engagements capabilities. Consulting quarter AI a single-digit payer our low infrastructure, We the with cloud fourth both provider health vertical and achieved the focused account. growth care in for data in and cybersecurity solution

a transportation on-premise the me legacy data freight to examples. a and noteworthy cloud. In prominent provide center the fourth management to engaged few their Let clients migrate quarter, ASGN

conducted Our proceed architecture native Once architectural our to to data Cloud. fully cloud migration analytics road our such AWS, our that maps enhanced AI. client to consulted practices and developed assessment clients' their of comprehensive to robust AWS agility, clients' migrated as provide and a experts will of team by we XX-year-old scalability leverage services system, data, modernize on adopting foundation advanced a and

moving increasing of the amounts cloud, need to vast is to data there information. enterprise sensitive protect an With

last resources HITRUST GRC, As commercial which Compliance, support Risk, to our Governance, to noted Practice, quarter, leverages our our a Medical Certification. Technology commercial Company clients. help In consultants, them industry continue with our fortify fourth and and or quarter, partner the to we achieve GRC government cybersecurity

combines to year-end. regulatory this and cybersecurity looking which was client industry Our standards by achieve certification,

the government HITRUST our ongoing extend team for quickly clients knowledge into engagement and prompting domain client seamlessly achieve and collaborated Certification commercial developing to support. advisory with XXXX to our needed our combined the Our

By onto developing best quarter, various the to establish their technology addressing onboarding we engaged company platform. a a by to and procedural excellence anomalies. commonalities, practices during Also onboarding of of center the identifying were retailers streamline

collaborated with retail for create our to gold standard implementations. architects clients solution a Our

more automation the project data. around sensitive will and compliance this create continues, of As we securing monitoring

Center Excellence, part Importantly, onboarding of their services as of responsibility an assuming the organization, for creator integral clients' retail of this we've our of professional become the partners.

tasked back-end while AI also to with consultants This outcomes improving their provides XXX A cutting-edge chatbot a create Microsoft connection range knowledge resolve Chatbot, customers developing efficiencies seamlessly that solutions in custom-built internal consulting in repositories of a their conversational energy to issue, clients to create via IT more our real-time a IT timely IT time. the Azure's integrates technical independently with ServiceNow Cloud. deliver teams. Our issues multi-agentic cannot that ensuring ticket help our to IT for GenAI empower chatbot resolution. record troubleshoot efficient our it company application wide value Fortune the When support an and

we provide it implementing our reduce efficiency, cases targeted While high-impact applications on before see GenAI, to of that clients data models improve insights. like many several use are be energy focus likely enterprise-wide companies will quarters deeper costs and AI

not integral evolve are teams in these business, the partnering our our success. only we're upscaling leaders partnerships we are strategically but industry our GenAI latest tech continued to that we with knowing applications, tech As far of ServiceNow which in other today, which, highlighted amongst core teams , technology I've comprise Services, our group have consulting Azure, and Thus Amazon partners. of each partnered our projects with Microsoft innovators, Web also

am one we pleased list to that welcome As to technology Workday. I partnership enter more XXXX,

As consultant. to the leading signed call, the beginning of I Workday agreement noted at ASGN acquire tech-enabled a a high-growth TopBloc, definitive

for TopBloc market with commentary Workday, a us partner in financials, as details enterprise to on a will Fortune XXX customer identified on We purposefully cloud ERP leader applications provide demand implementations Recognizing strategy focus my over customers. I'll opportunity. This related to acquisition and company XX% further a led Workday the Marie with our built and growing services. the platform. of While

industry innovator, a accelerates deployment that time TopBloc's of proprietary XXX team leverage to An over model consultants value. customer

implementation efficiency its its processes. addition, increasingly TopBloc customers and by offerings differentiates improves In its for incorporating AI into

more size growing. the will initial than the as also seamlessly as provide the We Beyond opportunities anticipate post-deployment has implementation foster $XXX gain Workday, past with billion Workday federal relationships. XXX installations government over the as positioned that Workday which to of TopBloc's TopBloc's X commercial integrate are services years, solutions customer and in TopBloc scale consulting With consultants sector. significant provides market, well immediate long-term within customer in ERP identified our base innovative well

Speaking critical include the support at agencies security. solutions Federal Government the for services for Government to advanced Federal the robust our national that Defense, remained Intelligence whose re-competed approximately of fourth now XX% our Community win turn Segment our of customers, rate government other and segment IT contracts. our for Department The let's quarter

due revenues software of to contract our for the X.Xx target $XXX book-to-bill the a expectations, predominantly basis. of X.Xx lower-than-expected on awards licenses, million quarter XX-month fell trailing our to net new put below Although back and

In addition trailing strength at was a $X.X the booking X.Xx or billion to year-end over of coverage contract revenues. XX-month backlog segment's ratio

data gaining performance, me administration lead responsible of thus, of topic including late, efficiency systems and with a collection, of lot and DOGE. to the Department backlog modernizing end of new that Discussions Government or the of ensuring IT data with the productivity. has upgrading network maximizing a federal in Efficiency, particular, software, integrity facilitating of DOGE spending attention tasked of and all governmental initiatives and indications been future goal and technology

While our it core DOGE's early government digital an in services, which modernization is could on days, and in we believe the cybersecurity, federal our comprise majority still lead solutions AI, priorities and emphasis increased to capabilities vast that of revenues.

cybersecurity agencies. for revenues revenues business X/X we aligned from our agencies Security. services Government The modernization offer, X/X Homeland more and solutions are support Intelligence management state high-end at and This the derived of contracts the Agencies government's cloud, modernizing of and the all services, Defense, strongly budget Federal aimed and automating the from of governmental local Department IT Alongside of with with comes data includes priorities. Department and remaining operations we also are and civilian processes.

we So of enhancing underscore let commitment to that me examples contracts government few further during fourth provide a the infrastructure. IT won upgrading our quarter and

intelligence X were and U.S. Norfolk, existing the Installations, X providing other an in center and in the California. on work Coronado, which data additional management are we Virginia our contract in to For teams awarded Navy, Navy defense

essential secure business of As center, will data manage network fixed safety global part their we contract worldwide. the which public provides Navy's new this functions naval support and price

seeing X-year Human financial Agency Services. task Health of will Health Beyond for Research sizable challenges future to prime global programs. chain contract In and their also By December, the providing we IT order first and productivity efficacy of Projects a with services, bookings our under supply awarded defense modernization. we were management the are assist Advanced to address the to support we and cybersecurity, program healthcare and scalability and increase Department

we to technological own also government efficiency for continue improve clients, invest we capabilities. our in our As

instance, against a cybersecurity. AI mathematical the clients internal models we've and prioritize and This organizations For that cybersecurity intersection the building vulnerabilities secured helps and of past in identify differentiated our the protection remediation money solution our been cyberattacks. at solution advanced time for X using team, save of and years, AI

other we proposal expand in operational workflows business development, plan our and quarter, enhances platform fourth the and internal gains the deployed during productivity to addition, our to this successfully use teams measurable capture of clients. in drive that We in-house XXXX and AI to throughout In our quality platform order an workflows. for

the to With first that, guidance. our Marie quarter turn fourth and call the discuss results to I'll quarter over XXXX

Marie Perry

Thanks, Ted. It's everyone this speak afternoon. to great with

but quarter, the prior on quarter fourth the third the were year. of revenues of decrease the the Segment Revenue billable same For $XXX X.X% a essentially X.X% Commercial days. as flat from to million, decrease $XXX.X of totaled to a million, year-over-year, number compared

decline the streams million, totaled revenues commercial totaled X% high-margin and sequentially. largest a for million, softness revenue our consulting, commercial expectations to portion of year-over-year XX% up continued and Assignment cyclical more our our year-over-year flat $XXX.X business. in due Revenue of the of outpaced $XXX the

XX.X% were $XXX.X fourth year-over-year. software for consistent Segment Federal a anticipated have million, Revenues of we When a we would we Government guidance the licenses prepared of decrease level year-over-year. from quarter, our our

the license well Ted as license our were Lower revenues million lower certain approximately to to $XX quarter. research by as development As resolution million than $XX led shortfall projects the the for revenue the due the in continuing delay revenues to for expectations noted, and quarter.

the Segment expectations. hand other our Our outperformed on Commercial

million reflecting for as exceeded higher included quarter integration to for mix from expansion Gross these expectations. fourth not of Government well last XX.X%, basis Federal to margin XXXX of for SG&A expense Segment Segment was higher price the XX year a estimates. quarter was included fourth increase Gross due margin margins. the fixed the $XXX.X was margin in our up planning up compared million $XXX.X acquisition, the XX Commercial XX materials to the revenues as and time Gross year-over-year, for Turning XXXX. strategic in our points the XX%, consulting points million and XX.X%, basis SG&A $X.X of also in guidance mix points of expense and contracts. of basis revenues. year-over-year, was fourth an quarter of margin quarter and primarily expenses in

the $XX.X $XXX.X EBITDA For of of margin quarter, to XX.X%. and also expectations net for was Adjusted mix our EBITDA our a due revenues. was adjusted fourth million. guidance income exceeded and commercial margin Adjusted the higher was outperformance EBITDA million the quarter commercial

addition mix, expansion the margins In business favorable commercial to saw consulting of we the for revenues within this the quarter.

X the in rate approximately quarter, basis, was for In repurchase On quarter and slowdown average ratio approximately flow year million. a XX% the a of our shares acquisition, X.X million EBITDA. at under rate fourth of we of $XXX million price secured EBITDA. of our $XXX.X equivalent million the totaled million, cash in net of $XXX.X X.X QX price year, $XX.X the conversion advance cash Free a average At revolver We cash end, even first also full XXXX, deployed TopBloc shares X.XXx. in repurchases in to active full repurchase $XX.XX. due flow free was conversion million adjusted for of With had repurchase quarter, at of XX% million cash we leverage adjusted quarters share an million of and the senior $XX.XX. the diligence $XX.X to the availability deployed an was $XXX.X with

repurchase We under authorization. $XXX have our share million approximately remaining million $XXX

manage can opportunities A allocation, and a following all balanced high-return driving to enables invest strong leverage, strategic free to prudently fund shares key in and advantage cash healthy By repurchase capital M&A, while disciplined balance value to initiatives, growth sustainable shareholders. our long-term strategic our a sheet. flow maintaining a opportunistically in that and approach we provides invest ASGN

we will to the revolver cash which With borrowing Post HSR acquire TopBloc of be acquisition, to in close, mentioned ratio consisting definitive the begin quarter. $XXX is X.Xx million allocate signed Ted $XXX for close cash free remains acquisition first related after and approximately will the paying to approval, towards net to earlier, leverage agreement a As equity. revolver. down we purchase of to late million, anticipated XX% The we subject anticipate our on acquisition. our approximately TopBloc, flow XX%

Turning to guidance.

for days X the materials. financial release conditions quarter based quarter, on market set the day the quarter. is more assumes of estimates fewer X.XX earnings year first the forth period estimates are than These Billable XXXX which Our and in fourth first current in are supplemental than and a and ago XX

considerations. quarter guidance Our first main incorporates X

market for first XXXX. the quarter business optimism First, the our will be conditions XXXX services demand while similar is in improving, that expect of and we to of of fourth quarter

approximately to with sees sequentially regards EBITDA decrease XXX reset. point related Second, annual quarter margin, the basis first to tax the typically payroll

Third, include from contribution quarter our does TopBloc. guidance not first

teens the TopBloc months our margin in revenue of to will $XXX for excess anticipate TopBloc represents timing the anticipates the XXXX. XX%. of For expected EBITDA of year million also full XXXX, high growth TopBloc which X the financials full in year roughly given approximately generate year-over-year of revenue in incorporated close. We is be revenues XXXX

we With $XX.X to net $XX $XX of of million revenues million of and million X.X%. $XXX million this EBITDA income to background, X.X% adjusted and adjusted margin estimating are EBITDA of for to QX $XXX to million $XX.X million XXXX,

you. over Thank now turn Ted remarks. I'll to closing the for call

Theodore Hanson

Thanks, Marie.

we of at are Accenture. Shiv as As to Blazer, the role will I our at welcome beginning the place Iyer, the thrilled be In start call, President, of current formerly Chairman. transitioning Rand's Vice mentioned Rand President, Executive of to the of March,

high-value been XX staffing in team evolving past ASGN impressive key His and from the executive conjunction a in a pivotal our helped elevate Rand to team, Over diversified of leadership played has broader quality leadership years, strategy, transformation. go-to-market broader with player in role ASGN's provider growth driving but spearheaded higher-end, development our top-tier has has Rand success. only services. not prioritizing the has he and our to IT their a of

new company. and a strategic close As grateful for strong I'm for he involvement both advise ASGN build has long-term In for colleague with leadership key and our and to initiatives Rand's handover helping helped Rand's my will seamless ASGN Shiv. friend, while the on very he foundation ensure role, continued

Consulting to ASGN, will businesses led as industry for the Shiv combination our to on services Industry experience M&A join consulting our we excited call confident XXXX of recently brings up X the Shiv Americas. earnings propel to him fit and move having am X His We leading Accenture's IT in experience much quarter that first having across and heights, Solutions new large-scale very to board. are the look help pyramid. forward I expertise, company make an to ASGN April. decades have Shiv in us we over consulting excellent and continue with on

up wrap the points we most our prepared reflect covered of to important today. like some we As I'd on remarks,

to business services are to for ASGN building towards and our and higher-end, We continue committed consulting position the IT solutions. high-value future

goals our across long-term leadership through IT tuck-in and as and the those base. consulting achieving such our addition bookings solutions commercial the our revenues, are expansion as strategic can introduction We of new the margins, TopBloc, customer government and sold acquisitions of be just discussed, of

investors Additionally, we key XXXX. Of And some and our savings offer federal in strength aligned we and see year, in maintain clients, demonstrated Big of demand a to X we enterprise which improvements information whom technology. Banking government the note, exited we robust cost TMT clients industries innovative efficiency. with began as vertical the to with portfolio we of in for throughout the a are solutions biggest

for that strategically sustained confidence business are business As positioned growth. have certain we steadily increases, our we

sympathies our by our wildfires. questions, and impacted opening teammates recent the Los the call extend to I'd their Angeles families Before up like to to deepest

I affected for the your Our hard everyone year. communities of to into ASGN want we with even all we forward move and committed this thoughts the supporting past greater with this dedication during are determination new Together, success. and thank year ASGN time. a collective work difficult to toward advance to are also impacted at those

and Thank call please XXXX open you to the again full Operator, questions. quarter call. for joining our year fourth

Operator

Thank you.

We will [Operator now be conducting session. Instructions]. a question-and-answer

comes question the of from first Jeff Capital with BMO Our line Markets. Silber

Jeffrey Silber

Government, bit the that just early. color on might it's more surprising. they on focus types be in I I'm what are saying we still little administration? wanted Can having to I what wondering, know folks? of about not impact first conversations get a with you're new potential Federal But terms the the of

Theodore Hanson

for Jeff, question. the thanks Yes,

month-to-month, trying still to that things and all things just are our work are breaking high in be the If who cyber, take day. I road going is here with durable there's be. is I Obviously, in look the through to government the to learn, efficient. quarter-to-quarter portfolio trying modernization, the think, what's advantage frankly, are of And for a week-to-week, what going exactly need the lot by the to be and those and everyone in at new federal that our here in DOGE. figure out technology to business, impact clients may government of IT some if answer back Even marketplace think and as on it's IT data going may is we while bumps here. the AI, hour sit there about services of the be and you on modernize systems administration term cloud, more long and

our you about Intel, and think revenue. then Homeland about And set, Justice X/X Department of customer is of our if DoD Security

a right there's you're fact flood would things sudden, work of If Commercial greater on fairly in marketplace in you think of units, durable. all we the at going ignore those of a arm cyber XX%. now. out do waving are And I that than lot again, the not that Federal the But add and that Government we to

stay of to ultimately can and will, And close automate operations us them, our us their also you that efficient technology, the services to if for use key and help terms bringing modernize customer help in to that and so so is protect be more productive. they

Jeffrey Silber

usual, or seen called been that's the, if there, it guess, with though, all slowdown if That's just it's just contracts right. arm-waving, helpful. either as business I'm down paying I'm have wondering any there's just All -- of going you some there's curious, the beyond disruption in already. you awarding terms issues contractors? I

Theodore Hanson

Yes.

it's think too that. slowdown a say, I to So is early there haven't payments? seen in We

that of I say no So would now. right sign

customer. new X is to here on, relates area mixed it of we you and a which weeks, government a which it's awards, things will, in As by We've waiting actually the couple, some positive were if the won bag, sign. recent

of so other pause and new areas, new obviously, I there watching in agencies on to certain it [indiscernible] there's think or award in closely. an out we're work the RFPs,

agency some slowdowns. So new we're agency, of bit a I'd seeing little but awards by bit say it's a and little some

Operator

comes question next with line Trevor from Our the Romeo of Blair. William

Trevor Romeo

Shiv to one the well. of working just First, want growth seems forward nicely luck as questions, in I of accretive It will you, with say, Then to great working best also like first Rand, TopBloc. on role. been I look is it new to in terms with be margins. in

of Just from the have maybe how wondering, materializing you and thoughts love the kind opportunity existing on could strategic what you business? see synergy the a kind perspective, there potential and kind with evaluated then opportunities of specifically of would Workday importance your you strategy long-term any ecosystem,

Theodore Hanson

Well, and jump I'll in. Great. Rand let I'll start

And combination experience here, of strength combined Shiv and of if I our institutional Rand leadership adding with our you forward. sector, all First leadership he's Rand we're the a as go obviously think about. to just team be now his the you knowledge to coming his will, background there, going across can't we're excited and deep units, really being and federal existing to with with it's goodbye we yet, and which in is team all, say commercial here

capital M&A in our and shareholders. right highest see M&A case. about On talk invested it with still the see when strategic has you as We and allocation, the been for best return question, the this TopBloc of we that we communicate you this about think capital

customers you are future. see if shopping in list, solution and in have the we need today We which our will, are that of capabilities

will, our for the what top needs be of enterprise Workday capabilities specifically was by, the you one if And the at list. system few that's list. at great of of in top things So a the go to

think always, customer in in these of lot base. our pipeline the is which of that in of commercial working the a we're both the its customer in government, room is a base of and in which and lot there's is lot as So a areas to the big go developing for a enterprise, market, federal initiative Workday overall. which mid-market, And easily

I think Workday here reported growth earnings and last XX% about their year-over-year.

certainly inside And set, demand there's So going house I the with The you data think last, the then and strong AI. will, really accounts. data about their would capital think ERP both for I software. we're world large a enterprise management just of say, where own you if if terms of systems and our in human financials

And capability this success got an that you've in the like and view to so of it felt AI go and have across data like the will, way to important enterprise around organization, system. deploy with was well. effectively And AI an our as if add, expertise we where data to we'd you into

So efforts. it's think it of to be is. with got a which then our in And because future this to best business And bigger this to accretive we is, system -- to think is was always going combined the the and say, things. now, we really businesses of Eco that all it to partner we've to Workday one we much obviously only in the our as be be growth, accretive which margin it profile, has definitely has of those

Trevor Romeo

commercial. maybe Ted. demand, then color guess, the my for that Well of one, in overall And on Excellent. sort one environment thanks client budget just second I

we've few I mention think, you of business kind I seen in Ted, last the increase did the months. all think in confidence,

uncertainty are that. starting are quarter. point? signs you Willingness just you there's actually Or Is meetings? it to at activity? starting improving in any bookings to too of out encouraging to of this to initial still you this lot Anything but any see early are signs Nice see acceleration -- your starting a there, So take say? like

Theodore Hanson

one. take want take to let Rand, Rand that? you that do I'll Yes.

Randolph Blazer

Well, in our We listen, translated the pointed which growth. generally, at look see we out number the we but the at and where which flow not pipeline, are levels the of backlog, sequential that. at at into we're we business, We activity bookings look revenue, the do. call, sectors, earnings a we at I coming. of maybe has precursors think Ted look look seeing We and for bookings where markers, can yet we at our the look look

gives that's And mentioned, bellwethers for we Ted know spend, are in of good one what So it's us confidence. as them. coming services, that financial certain sectors, IT

give So at? look the Trevor, we of that plethora of things you a does sense,

Trevor Romeo

I it Yes. Thank you really Rand, that was appreciate helpful. guys.

Operator

Our next Canaccord. from comes Joseph question the of line Vafi with

Joseph Vafi

down Thanks bit. We're we environment to that vertical bank in bit. of I for you it a in Maybe questions, we going and Maybe now. little big we board here of the on on And of interesting at where it kind be about of for kind mean, Shiv -- would and to well. level, miss banks, Rand, the welcome drill is a I kind congrats. services was rewind it kind been of if you're as calls financial these mix know maybe we've talking a high we kind clock kind where pre-normalized big of in, were versus talking about the

Just how a a have normalized back get feel follow-up. trying of to a is I there much upside then there? And kind level for to

Theodore Hanson

thereafter, you positioning we of the out, not Joe, Tech far thought back, Big intensively, as into Tech begin and is the course things got might big banks too obviously, 'XX XXXX both was returned. be [indiscernible] financial think for economy. more services during So if they a obviously, to what decelerate, when recession in

and out, a tick it this ramp, look there, to I but of year. bottomed have have the Now commercial have to our like don't been about. XX% front revenue financial typically big of little a services a of It bit me, in -- and see XX% banks of business. we're would starting mix

Joseph Vafi

Correct. Estimate in XXs. the -- low low XXs

Theodore Hanson

Right.

in the so XX% And revenues. obviously of put to now teens it the right just and commercial, total of perspective in Joe, high it's ASGN

an of you gives magnitude. that So order maybe

Joseph Vafi

Sure. That's kind have broadly. of a looking sequential of of at looking to little continue broader maybe strength. should very business, Obviously, we business, the at But feels some great showing see which the then business more little the And seen start a leading like it's it kind consulting helpful. is indicator, more of the kind a bookings secondly, assignment to just resilience. have

a to on more business of going of your Just wondering be are others. in firms in maybe assignment as if the cycle maybe seeing revenue going side for you're of the versus out to there the kind opt market -- kind not lean where much change are structural this and clients consulting

Theodore Hanson

about I talked Joe, creative the obviously, in staffing here, is staffing our let marketing been lot Well, It's been and return. IT the Yes. there's this us cycles. a a that's mean, up we've would lag The call there, is from of you red but the it. through a built of I'll the fourth clients to the, as it there's quarter that kind flow tell lead it, little bit need digital

that mean sense we'll that -- So changed. I that watch have think on on I them of here changed. don't think just we that's positioned see Rand, digital then haven't both structurally I quite change. has consulting don't obviously, creative to IT on has and we're been mean I -- yet. But And seen and know, our the to staffing side. structurally kind any and side this anything serve for we're the I

Randolph Blazer

we business that about said fall-off past. we've in revenue to go a think may the you and people see typically we X%, from Yes. QX of many times I QX And as remind Ted, of

ending to some start first the year. in the of the and work, previous year, So is gear following you of [indiscernible] and have the then year year up second that just --

process positive, But I sectors. certain lag a going said, rep lead think through as Ted, now. our flow particularly we're generally is in that right you So

so... And

Theodore Hanson

seasonable thing Yes. went And in you quarter from I the QX, year, think at this you broadly out year, to the mid-single QX, from to kind a -- into digits that's if to low look a first. good reset normal fourth point at as QX going QX and to of we're the last something to if back looked

Operator

UBS. from Our question Kevin of next with comes line the McVeigh

Kevin McVeigh

and service thank and I wanted continued service. guess, a I Thanks Great. Rand, questions. your couple much quick of for so to, you

quick to Is TopBloc I $XXX I just does if XXX some go have consultants, think the hour. kind revenue $XXX is imply million, don't on terms know about and you maybe of did -- what a a they that of about fair in said at? about I the the and of acquisition, bill math. rates $XXX think an bill way it that rate Just off

Theodore Hanson

Look, bill We're rates. the disclose would Kevin. to it, of not that math going be

probably in range. or and today math there's And there -- but that do, so you not forward, that you're obviously, the could it's going

Kevin McVeigh

does then And with and going on the impact the acquisition going I at the guess balance that leverage sheet, Okay. forward? all the buyback

Theodore Hanson

to follow deleveraging. Well, obviously, on and think path. have one we, focused I look, at don't scale, today's exclusively we'll size I mean be

transaction Marie, leverage is... think post our I

Marie Perry

X.Xx.

Theodore Hanson

or whether it's a below it's on that's repurchasing where pursue basis, modest X.X when the capital shares acquisition. can we're we we've allocation So net right? historically, based that an we've is, always X.X, activity been on said next whatever

of quarters here into So we've couple flow delever. work a cash to free of only the needed got

So I best what's see that but would will capital. depend next allocation the pursue, you'll us on dollar of it expect

Kevin McVeigh

expectations in? That's that what the percentage Can was sounds that it? just helpful. it license And the licensed Federal to you federal remind percentage of versus the of versus managed services of anything remind consulting? right? is Is Was just sales us business I relative us on business federal it if there that guess didn't quarter come have, terms like in in the the you side? what And

Theodore Hanson

Yes.

release carries the don't we still revenues delivered client. to line. of solely to so It of number, obviously, was that and we it stuff So affective specific miss revenue million was million software $XX bottom on was the but a That to margin very realization $XX on the that it. licenses, Kevin, little

the was the only So stuff be the revenue the license side. that a software little thing behind miss whimsical, on can but

Kevin McVeigh

that a license? And again, federal was

Theodore Hanson

Correct. work, some our other of There licenses of with are our IT work. associated AI cyberwork, some some of modernization our

-- when going pull on the a as the of ongoing they're determines and then client to those use system. of part And implementation, obviously, of part needed. so the the the They're they're

Kevin McVeigh

at again, of has with of And would pause do had last I've -- the federal some that a be anything my the Understood. to questions. lot asked to not level? this and But question,

Theodore Hanson

related. Not

Randolph Blazer

those mention that like the some should probably trends sometimes going than contracting of and for see we licenses more that And Ted prefers vendor Ted, you you go -- direct should officer mentioned us. probably intermediary the through the to And to maybe anything.

Kevin McVeigh

And what would or the you? [indiscernible], a direct through whether you're

Randolph Blazer

agents decided They us. a and the workload What think pass-through who mean different play else. question by the back different happened there directly buy the maybe and could But instead they've decisions. or of just make the That's how be probably could procuring of to -- for perhaps into can of procurement. a they don't they to any a I It's factors go anything you workload. want could internal in slowdown save I don't through to it's matter their to lot a I that what's recent little a that's read I the on bit path really how are. of into think it, they or are go license think of point, margin

Operator

Our question Sommer Tobey Truth line next from of Securities. comes with the

Tobey Sommer

basis, activity do of somebody those higher-end are IT about there. if was probably us et the USAID when cloud, efficiency ] bit that but [indiscernible] within more give was an we provide some everything and on in government a think services I objectively you dig wondering business. know and exposure modernization, [ it at Fed your I services little from cetera, ECS providing SIV driving you could color

the side? little a So could us granularity civil you more and color give on

Theodore Hanson

the Tobey, without dispersed. of much that's digits cover of it's more fairly the mid-single way, that client regulatory best in I about revenue, to of many, kind Probably It than it detail, and agencies group too into not speak And could as I be revenue getting examined it's if really mean, XX% there's doesn't in any, is really is obviously, commercial mentioned concentration I any call that, even XX% would got agencies of I earlier, these of think, of you the we that have by honestly, But don't that we think DOGE. only, civilian. a and sled. any

So of about XX% you're that. to really, down

don't there's about as -- revenues. IT can vis-a-vis we're we we no so all be positioned know, And the and I higher-end know cybersecurity, the don't cloud think And you work. well it's as AI, what services data modernization, and there while concentration,

Tobey Sommer

how deal, an Could you auction talk to become no to Was you about came how a it TopBloc? process? equity us component And did the of the value?

Theodore Hanson

will, we of the there their of couple our our you ownership this of that, got how little the at our and the of the the up It in year. founders proceeds and the prioritize about that but things and about seen a list. been been at mix partners acquisition, years There's that very and had ServiceNow we've reengaged ago, polished same there the firm of to we and making a with was watching that when at It a between a mix middle majority thought actually, we we list be like equity top and met if having list TopBloc time, the And number and would stood us. in still time, alignment, firm. in right was Workday We Sure. are of that last refined equity, minority by private other months knew a were go there the top had ownership. we, we of We've had couple -- of felt of the business. is GlideFast at here progress, obviously, towards of with the last kind firm of

that. so than wasn't too And it more much

Tobey Sommer

a there? software have the how Since than in been variability Is Okay. procure us key, level Have those. One lower on you licenses. included typical give can the customers you guide? your I Just at in follow-up software historically? it anything guess, would the licenses

Theodore Hanson

It's that fairly no it in than yes. historically spare. our number. there's and Yes There be bulk in purchases would bit It's is lower and guide. a little

Tobey Sommer

Okay.

So standpoint, have sort organization strengthen side increases, the be more that X because had already. I'm industry and a for to the actions to and what revenue Ted. years demand on put curious declines, we've quickly strategically big the grow TopBloc of now discussed I'll the taken company picture from The and able of you once to call

Theodore Hanson

done of here, Yes. look, example think so we've muscle the is needs and I Well, that on customer in or and to strengthen things that today our mean, there are build our TopBloc ready for in really which I is future. in what solutions we hone that one and

there up that furthest on moved years. the the ever, last the the with that's thing think I lines a customers that there's today, would more so even So what say we've strength our than capabilities X in to quite need, isn't X I over solution if revenue

honing units with thing that are solution kind cybersecurity other at and list. AI that between the put the of this because think collaboration but better and data commercial I units and we're things strength, we really well is some do there federal our when and top in our of

thing And just solution here. that I would say so the would that build be biggest continuing to strength

Rand, add anything would else? you

Randolph Blazer

in solution the support Tobey, but it with you or lot last the big also our a strength. strength, gotten don't stronger our has to leads because the mind, players just will have of technical in alliance X you I if not where strength had technology relationships remarks, we Well, years

within to are accounts the [indiscernible] of I've and thing on of productivity foremost first and the marketplace, right really in the space second the in accounts, client teams. growing the office right The as as focused continue mentioned our team, to comes stay the set is set we solutions of well back and our both segment

terms missed focus stay these a can we of see maintain, haven't So beat margins. our and and productivity, accounts you foremost, on by them. We as first in with a

and return Ted said, alliance relationships. yes, strengthening us, internal to spend strengthening then as So and there. we're need And they solutions, IT strengthening when

Tobey Sommer

Circle Could how you growth compare the me. of in perform Last assignment How for rest did question the the quarter? do Creative -- business? to

Theodore Hanson

Circle is cyber, of IT about coaters, our together, revenue more Thanks are Yes. say ]. Creative mix the [ our of than offering. most cyber X% which I'd the down Bill placement, and firm The now

kind of think about low where not and that's with there. of much been change consistent that kind as mid-teens that side, on we to were, so So

overall in commercial seeing Although that in within in mentioned same Tobey, seeing Rand some those areas we good area, those the the X the we're units that earlier. IT say, IT I will leading of areas, indicators are

Operator

And from of Mark Baird. the Marcon our next question comes line with

Mark Marcon

position continue the joined organization. and the of then new you be really as that the well Shiv. on and actually going you're to congratulations to hear calls Rand to glad to hopefully, welcome And part

challenging the You've do much it And you regards doing give despite stands internal year can headcount to to with of excess currently where job you the How a margins the environment. great ago? on have? today an relative update terms been a capacity in us

Theodore Hanson

a right last pretty and we're the look, is you capacity year think, from numbers. I quarter, third it. And Well, it the It's this in ourselves year-over-year. capacity fourth about work mean, first were our here -- our I sequentially here XX% our not seeing from quarter still able bookings as head problem, to and to get team where I we position count if absorb Mark, I but up commercial. were there. the mean, you to in see up can our and get seeing steady was now. will. little the They we're into is look, mean it down a XX%,

Mark Marcon

Great.

from picks are perspective up, meant if up? business capacity business going think you you Or do add you'd of if problem. I how I didn't to the have? headcount need have a And to excess much so picks just

Theodore Hanson

headcount. we adding to the other think we I we're again, And look, that's thing and of happen pickup you as show got our more less years, going to Today, pretty the gross Well, hopefully, we've margin. leading been I the to EBITDA comes the you're federal the the return has of in a a mix overall a inflect of slightly EBITDA, point, obviously, business, steady, commercial, here in our going get few as in at where we'll for a to you'll steady last margins capacity. here commercial because as indicators go, decline if at up some but -- like see said, Mark, begin

around a seeing we you'll you're as forward. see So that turn mix business impact, here go

Mark Marcon

there's us -- Great. of expect government specific with range that I'm just level to wondering, of in should the there's but you're regards giving same And to you so in down if side rough government first could I we side. there. quarter, wanted the much out a kind not just the the just for see then this take decline guidance, uncertainty

Theodore Hanson

what I you in at same mean, everything moving here our of that's think could guide happen time, today, there's we're But aware I that is on see be there. in mean, Mark, we've problematic. we our the I guide lot marketplace. anything around given to look, still that's based not going just a

I end. scrubbed guide know. our they what hard bracket that knows because couldn't we've So think don't for to pretty it I you anybody

Mark Marcon

I've then congrats And TopBloc, for to followed since that. on Workday Okay. prior the IPO.

fairly So it's know I well.

you -- And implementations? terms on know TopBloc which recurring purely focused do regards what exact sectors the of kind to how specifically, versus business is have they of In of most they're with much implementations? the do

Theodore Hanson

they've that across know, where a government. you is as of done which place is like market Workday, the diverse the And positive. obviously, position in we same so less, we the following you one The industries their that's federal have serve, Mark, Fortune So you I market so a XXX the it, that's of of if will, to piece up customer. XXXX, Fortune are bottom X,XXX. the to say, half served, they've end market middle as initiative, the call do, big an inside would The

implementation work. what got a group call has middle So nice of quite that customer production large that run I'll services a from various between players to And of quite support, they've range list. market a then services. and accounts, helping their post-production revenue mix then And

growing they a nice recurring onetime for revenue nicely. so is stream And work quite them implementation that beyond and the have just

Mark Marcon

HR if just do as then primarily know you're or well both you HR? finance as on And Great.

Theodore Hanson

HR, suite. plus Finance full

Mark Marcon

Excellent.

should a well. with that really to and be you you're So ServiceNow doing nice position already what complement

about I there? you do about it How keeps that that tariff question, Intersys Mexican it's think that's chatter coming but Is to are question. just up, center? based just delivery on ask out think this the the thinking your -- how because we in

Theodore Hanson

past, tariffs and goods to -- today of types are. Well, we what services subject the those are know not what been the subject have in we've way seen not based on in the

U.S.-based position think positive. on So have here about a obviously, wants a access that's the front, to talent. and just that to technical you talent for here for If That's right? need competitive maintain clients, everyone historic, that

so of make to you've new over to just U.S., in to able And administration between tech technical bit open to seen continue locations in pathway access and all the offshore not stay the to big a be little the sure world. here order conversation but talent,

positive. a that's So

effect have tariff rise things. the I'll on of those direct I all a costs a where implemented, of end, are could parts indirect things. But other see smaller say, world there's at mean, but the kinds you tariffs in can

we now, and And about to so it this good all I where the right the watching us, goes for administration. think policy have but with new keep feel we

Operator

session. question-and-answer like the over Hanson have we the remarks. CEO, the for his to would And reached floor Ted turn of I closing the end to

Theodore Hanson

Well, quarter operator. appreciate I in April fourth time thank you, Great. to earnings to and of with and for we everybody's first quarter our discuss our attention release, again today look XXXX. forward speaking you

Operator

may conference, you. your at Thank your And time. Thank for you and disconnect concludes this this participation. line today's you

ASGN (ASGN) 5 Feb 252024 Q4 Earnings call transcript