Loading...
01/10 20:10
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents mixed signals: a decrease in overall revenue but stable net income and improved gross margins. The Q&A reveals cautious optimism about IT spending and consulting growth, with concerns about unclear management responses. The share repurchase program is positive, but seasonal demand fluctuations and foundational tech investments pose risks. The market cap suggests moderate reactions, leading to a neutral prediction.
Revenue $1.031 billion, a decrease of 7.7% year-over-year, but essentially flat to the second quarter.
Commercial Segment Revenue $718.8 million, a decrease of 8.1% year-over-year.
Federal Government Segment Revenue $312.2 million, a decrease of 6.6% year-over-year, but up 1% sequentially.
Commercial Consulting Revenue $285 million, up 3.9% year-over-year and up 1.2% sequentially.
Gross Margin 29.1%, an increase of 20 basis points year-over-year.
Commercial Segment Gross Margin 32.8%, up 30 basis points year-over-year, reflecting a higher mix of consulting revenues.
Federal Government Segment Gross Margin 20.7%, up 30 basis points year-over-year, primarily due to a higher mix of direct labor.
SG&A Expense $207.5 million, compared to $206 million in the third quarter of 2023.
Net Income $47.5 million.
Adjusted EBITDA $116.9 million, with an adjusted EBITDA margin of 11.3%.
Free Cash Flow $127.9 million, or a conversion rate of approximately 109% of adjusted EBITDA.
Cash and Cash Equivalents $166.6 million.
Net Leverage Ratio 1.9 times.
Share Repurchase $95.6 million for the repurchase of roughly one million shares at an average price of $92.26.
New AI Solutions: ASGN is developing solutions in data and analytics, cloud, cybersecurity, and early-on AI applications, focusing on generative AI.
Data & AI Team Projects: Implemented machine learning models for labor forecasting and automated address verification for clients, enhancing operational efficiency.
Federal Government Segment Growth: Federal Segment's revenues improved 1% sequentially, with net new contract awards of $666.4 million, indicating strong demand.
Commercial Segment Growth: Commercial consulting revenues improved 3.9% year-over-year, driven by growth in consulting services.
Operational Efficiency: Gross margin for the third quarter was 29.1%, reflecting a higher mix of consulting revenues and margin expansion.
Share Repurchase: ASGN repurchased approximately 1 million shares for $95.6 million, indicating strong free cash flow and a commitment to returning value to shareholders.
Strategic Focus on AI: ASGN is enhancing its capabilities in AI and machine learning, positioning itself as a top contractor for government AI/ML projects.
Market Positioning: ASGN is strategically positioning itself within clients' organizations to grow and expand relationships over the long term.
Global Economic Uncertainty: Despite stable market demand, global economic uncertainty remains a challenge, leading to cautious client spending on IT services.
Client IT Services Spending: There has yet to be a meaningful increase in client IT services spending, which may impact future revenue growth.
Regulatory Compliance: The need for enhanced cybersecurity frameworks to comply with industry regulations poses a challenge, particularly in the healthcare sector.
Competitive Pressures: The company faces competitive pressures in securing new contracts and maintaining client relationships, especially in the federal government segment.
Macroeconomic Conditions: Potential risks from macroeconomic conditions, geopolitical factors, and the upcoming presidential election could impact business operations and client spending.
Staffing Model Adjustments: As clients seek efficiencies, there is a risk that they may reduce headcount needs, impacting the staffing model and demand for temporary IT services.
AI Implementation Challenges: Clients must complete foundational work on data management and cybersecurity before fully leveraging AI, which may delay project timelines.
Market Confidence: Client confidence is crucial for increased IT spending; current economic factors are causing clients to remain cautious.
Revenue Growth: Q3 2024 revenues of $1.031 billion were similar to the second quarter and within guidance range.
Adjusted EBITDA Margin: Adjusted EBITDA margin of 11.3% was at the midpoint of guidance, reflecting a shift towards higher-end consulting solutions.
Consulting Focus: IT consulting is approaching 60% of total revenues, with a focus on data analytics, cloud, cybersecurity, and AI applications.
Federal Segment Growth: Federal Segment revenues improved 1% sequentially, with a book-to-bill ratio of 2.1x.
AI/ML Initiatives: Continued expansion in AI/ML work for defense and intelligence, with funding for AI-enabled operations.
Share Repurchase: $95.6 million deployed for share repurchase, with $573 million remaining under the authorization.
Q4 2024 Revenue Guidance: Estimated revenues of $990 million to $1.01 billion.
Q4 2024 Net Income Guidance: Net income expected between $39.2 million to $42.1 million.
Q4 2024 Adjusted EBITDA Guidance: Adjusted EBITDA expected between $103.0 million to $107.0 million.
Q4 2024 Adjusted EBITDA Margin Guidance: Adjusted EBITDA margin expected between 10.4% to 10.6%.
Market Conditions: Expectations for Q4 market conditions to be similar to Q3, with no anticipated uptick in IT spending.
Share Repurchase: ASGN deployed $95.6 million for the repurchase of roughly one million shares at an average price of $92.26. There is approximately $573 million remaining under the $750 million share repurchase authorization.
ASGN's earnings call highlights strong commercial consulting growth, strategic AI investments, and an optimistic federal outlook. Despite government shutdown concerns, the impact is deemed immaterial. The AI Innovation Center and increased federal funding are positive catalysts. However, management's unclear response on the shutdown's duration and stable staffing business slightly temper enthusiasm. Given ASGN's market cap, the overall sentiment is positive, suggesting a potential 2% to 8% stock price increase.
The earnings call presents a mixed picture: a slight decline in overall revenue, offset by growth in commercial consulting. The federal segment faces challenges, yet TopBloc is performing well. Margins are pressured, but free cash flow supports share repurchases. The Q&A reveals cautious optimism, with AI investments seen as beneficial. No strong catalysts for significant stock movement are evident, leading to a neutral outlook.
The earnings call reveals mixed results: a decline in total revenues and federal segment revenues, but an increase in commercial consulting revenues and gross margins. The Q&A section reflects uncertainty about government contracts and unclear management responses, slightly dampening sentiment. Despite strong consulting performance, revenue guidance is weak. The TopBloc acquisition is a strategic positive, but overall, the market is expected to react neutrally due to the mixed financial performance and guidance, aligning with the company's mid-cap status.
The earnings call presents mixed signals: a decrease in overall revenue but stable net income and improved gross margins. The Q&A reveals cautious optimism about IT spending and consulting growth, with concerns about unclear management responses. The share repurchase program is positive, but seasonal demand fluctuations and foundational tech investments pose risks. The market cap suggests moderate reactions, leading to a neutral prediction.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
