ASGN Inc

Previous wording

ASGN provides information technology ("IT") services and solutions across the commercial and government sectors. ASGN operates through two segments, Commercial and Federal Government. The Commercial Segment, which is the largest segment, provides consulting, creative digital marketing, and permanent placement services primarily to Fortune 1000 and large mid-market companies. The Federal Government Segment provides advanced IT solutions to the Department of Defense, the intelligence community, and key federal civilian agencies, namely the Department of Homeland Security. Virtually all of the Company's revenues are generated in the United States.

Current wording

ASGN provides information technology ("IT") services and solutions across the commercial and government sectors. ASGN operates through two segments, Commercial and Federal Government. The Commercial Segment, which is the largest segment, provides consulting, creative digital marketing, and permanent placement services primarily to Fortune 1000 and large mid-market companies. The Federal Government Segment provides advanced IT solutions in data and AI, cybersecurity, and enterprise transformation to the defense, intelligence, and national security agencies, along with other organizations including state and local and civilian agencies. Virtually all of the Company's revenues are generated in the United States.

Previous wording

Revenues for the quarter were $1.0 billion, down 7.7 percent year-over-year. The table below shows our revenues by segment for the three months ended March 31, 2025 and 2024 (in millions).

Current wording

Revenues for the quarter were $1.0 billion, down 1.4 percent year-over-year. The table below shows our revenues by segment for the three months ended June 30, 2025 and 2024 (in millions).

Previous wording

From an industry perspective, the Company operates in six broad industry verticals. Commercial Segment revenues (69 percent of total revenues) were down 8.1 percent year-over-year and are categorized in five verticals: (i) Financial Services, (ii) Consumer and Industrial, (iii) Technology, Media, and Telecom ("TMT"), (iv) Healthcare, and (v) Business Services. The Consumer and Industrial vertical was up mid-single digits, while the remaining four industry verticals declined year-over-year. Federal Government Segment revenues (31 percent of total revenues), the sixth industry vertical, were down 6.7 percent year-over-year mainly due to a few programs that ended and a slight impact from the Department of Government Efficiency's cost-cutting efforts.

Current wording

From an industry perspective, the Company operates in six broad industry verticals. Commercial Segment revenues (69.4 percent of total revenues) were down 2.4 percent year-over-year and are categorized in five verticals: (i) Consumer and Industrial, (ii) Financial Services, (iii) Technology, Media, and Telecom ("TMT"), (iv) Healthcare, and (v) Business Services. The Consumer and Industrial vertical was up double digits, Healthcare was flat, and the remaining three verticals declined. Federal Government Segment revenues (30.6 percent of total revenues), the sixth industry vertical, were up 1.1 percent year-over-year.

Previous wording

Total IT consulting revenues were $586.2 million (61 percent of total revenues), down 1.4 percent year-over-year. Commercial Segment consulting revenues were $290.1 million, up 4.7 percent year-over-year. Federal Government Segment revenues, which are all consulting revenues, were $296.1 million, down 6.7 percent year-over-year as stated above. Assignment revenues, which totaled $382.1 million (39 percent of total revenues), were down 15.9 percent year-over-year, reflecting continued softness in the portions of the Commercial Segment business that are more sensitive to changes in macroeconomic cycles.

Current wording

Total IT consulting revenues were $638.2 million (62.5 percent of total revenues), up 8.1 percent year-over-year. Commercial Segment consulting revenues were $325.7 million, up 15.7 percent year-over-year. Federal Government Segment revenues, which are all consulting revenues, were $312.5 million, up 1.1 percent year-over-year as stated above. Assignment revenues, which totaled $382.4 million (37.5 percent of total revenues), were down 13.9 percent year-over-year, reflecting continued softness in the portions of the Commercial Segment business that are more sensitive to changes in macroeconomic cycles.

Previous wording

Consolidated gross profit declined 7.0 percent year-over-year on a revenue decline of 7.7 percent. Gross margin for the first quarter of 2025 was 28.4 percent, an expansion of 20 basis points compared with the first quarter of 2024. Gross margin for the Commercial Segment was up 40 basis points, reflecting a higher mix of consulting revenues as well as margin expansion in these revenues. Gross margin for the Federal Government Segment was down 20 basis points, primarily due to higher rates of fringe benefits.

Current wording

Consolidated gross profit declined 2.6 percent year-over-year on a revenue decline of 1.4 percent. Gross margin for the second quarter of 2025 was 28.7 percent, a compression of 40 basis points compared with the second quarter of 2024. Gross margin for the Commercial Segment was up 30 basis points, reflecting a higher mix of consulting revenues as well as margin expansion in these revenues. Gross margin for the Federal Government Segment was down 140 basis points, primarily due to a higher volume of revenues from low-margin software licenses and the loss of certain higher margin contracts as a result of initiatives associated with the U.S. Department of Government Efficiency.

Previous wording

Selling, general, and administrative ("SG&A") expenses consist primarily of compensation expense for our field operations and corporate staff, information systems, rent, public company expenses, and other general and administrative expenses. SG&A expenses were $214.5 million, compared with $210.2 million in the first quarter of 2024. SG&A expenses in the first quarter of 2025 included $3.3 million in acquisition, integration, and strategic planning expenses, compared with $1.2 million in the first quarter of 2024. The first quarter of 2025 also included a $4.4 million one-time write-off related to previously capitalized costs for software enhancements that will no longer be placed into service.

Current wording

Selling, general, and administrative ("SG&A") expenses consist primarily of compensation expense for our field operations and corporate staff, information systems, rent, public company expenses, and other general and administrative expenses. SG&A expenses were $216.8 million, compared with $205.6 million in the second quarter of 2024. SG&A expenses in the second quarter of 2025 included $8.3 million in acquisition, integration, and strategic planning expenses, inclusive of $5.2 million in charges related to strategic workforce optimization initiatives. The second quarter of 2024 included $1.2 million of acquisition, integration, and strategic planning expenses.

Previous wording

Amortization of intangible assets was $14.3 million, compared with $15.1 million in the first quarter of 2024. The decrease was due to older intangibles reaching the end of their useful lives in the second half of 2024.

Current wording

Amortization of intangible assets was $16.9 million, compared with $15.1 million in the second quarter of 2024. The increase relates to the effects of the TopBloc acquisition, partially offset by older intangibles that have reached the end of their useful lives.

Previous wording

The provision for income taxes was $10.3 million, down from $15.2 million in the first quarter of 2024 due to lower income before income taxes. The effective tax rate was 33.0 percent, up from 28.5 percent in the first quarter of 2024. The increase in the effective tax rate relates to tax shortfalls on stock-based compensation.

Current wording

The provision for income taxes was $12.1 million, down from $17.4 million in the second quarter of 2024 due to lower income before income taxes. The effective tax rate was 29.2 percent, up from 26.9 percent in the second quarter of 2024. The increase in the effective tax rate relates to shortfalls on stock-based compensation.

Previous wording

Interest expense, net, which consists primarily of cash-based interest expense, amortization and adjustments to deferred loan costs, and interest income, was $15.4 million, down from $17.6 million in the first quarter of 2024. The decrease is primarily the result of lower interest rates in 2025 on the senior secured credit facility, additionally, the prior year included $1.5 million of costs related to the March 2024 amendment to the senior secured credit facility. The weighted-average outstanding borrowings and cash-based interest rate in the first quarter of 2025 and 2024 were $1.13 billion and 5.5 percent, and $1.04 billion and 6.2 percent, respectively.

Current wording

Interest expense, net was $33.6 million, up from $33.4 million in the first six months of 2024. Excluding $1.5 million of costs from the prior year period that related to the March 2024 amendment to the senior secured credit facility, the weighted-average outstanding borrowings and cash-based interest rate in the first six months of 2025 and 2024 were $1.20 billion and 5.6 percent, and $1.04 billion and 6.1 percent, respectively.

Previous wording

Commercial consulting bookings are the value of new contracts entered into during a specified period, including adjustments for the effects of changes in contract scope and contract terminations ("Bookings"). The underlying contracts are terminable by the client on short notice with little or no termination penalties. Measuring Bookings involves the use of estimates and judgments and there are no independent standards or requirements governing the calculation of bookings. Information regarding Bookings is not comparable to, nor should it be substituted for, an analysis of reported revenues. The book-to-bill ratio for our commercial consulting revenues is the ratio of Bookings to commercial consulting revenues for a specified period. The average duration of commercial consulting projects is approximately one year.

Current wording

Commercial consulting bookings are the value of new contracts entered into during a specified period, including adjustments for the effects of changes in contract scope and contract terminations ("Bookings"). The underlying contracts are terminable by the client on short notice with little or no termination penalties. Measuring Bookings involves the use of estimates and judgments and there are no independent standards or requirements governing the calculation of bookings. Information regarding Bookings is not comparable to, nor should it be substituted for, an analysis of reported revenues. The book-to-bill ratio for our commercial consulting revenues is the ratio of Bookings to commercial consulting revenues for a specified period.

Previous wording

Our working capital, which is current assets less current liabilities, at March 31, 2025 was $508.1 million, and our cash and cash equivalents were $107.0 million. Our cash flows from operating activities have been our primary source of liquidity and have been sufficient to meet our working capital and capital expenditure needs. At March 31, 2025, we had approximately $250.0 million available under the $500.0 million revolving credit facility. We believe that our cash and cash equivalents on hand, expected operating cash flows, and availability under our revolving credit facility will be sufficient to fulfill our obligations, working capital requirements, and capital expenditures for the next 12 months and beyond.

Current wording

Our working capital, which is current assets less current liabilities, at June 30, 2025 was $481.7 million, and our cash and cash equivalents were $138.9 million. Our cash flows from operating activities have been our primary source of liquidity and have been sufficient to meet our working capital and capital expenditure needs. At June 30, 2025, we had approximately $320.0 million available under the $500.0 million revolving credit facility. We believe that our cash and cash equivalents on hand, expected operating cash flows, and availability under our revolving credit facility will be sufficient to fulfill our obligations, working capital requirements, and capital expenditures for the next 12 months and beyond.

Previous wording

Net cash provided by operating activities was $16.8 million for the first three months of 2025, compared with $73.3 million in the same period of 2024. Net cash provided by operating activities before changes in operating assets and liabilities was $66.4 million, compared with $77.4 million in the same period of 2024. Changes in operating assets and liabilities resulted in net cash usage of $49.6 million for the first three months of 2025, compared with $4.1 million in the same period of 2024. This year-over-year change primarily related to an increase in accounts receivable days sales outstanding in the first three months of 2025.

Current wording

Net cash provided by operating activities was $141.7 million for the first six months of 2025, compared with $164.0 million in the same period of 2024. This year-over-year change primarily related to lower net income in the first six months of 2025.

Previous wording

Net cash used in investing activities for the first three months of 2025 was $316.3 million, comprised of $306.1 million used to acquire TopBloc and $10.2 million used for capital expenditures. Net cash used in investing activities for the first three months of 2024 was $10.8 million and related to capital expenditures.

Current wording

Net cash used in investing activities for the first six months of 2025 was $325.4 million, comprised of $306.1 million used to acquire TopBloc and $19.3 million used for capital expenditures. Net cash used in investing activities for the first six months of 2024 was $16.0 million and related to capital expenditures.

Previous wording

Net cash provided by financing activities was $201.2 million for the first three months of 2025 and included net borrowings under the senior secured credit facility totaling $248.7 million, offset by $50.4 million used to repurchase the Company's common stock. Net cash used in financing activities in the first three months of the prior year was $80.0 million and included $79.7 million used to repurchase the Company's common stock.

Current wording

Net cash provided by financing activities was $116.3 million for the first six months of 2025 and included net borrowings under the senior secured credit facility totaling $177.5 million, offset by $59.9 million used to repurchase the Company's common stock. Net cash used in financing activities in the first six months of the prior year was $190.7 million and included $187.7 million used to repurchase the Company's common stock.

Previous wording

There were no material changes to our critical accounting policies and estimates during thefirst quarter of 2025 compared with those disclosed in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our 2024 10-K.

Current wording

There were no material changes to our critical accounting policies and estimates during thesecond quarter of 2025 compared with those disclosed in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our 2024 10-K.