February 05, 2025 04:05 PM Eastern Standard Time

RICHMOND, Va.--(BUSINESS WIRE)--ASGN Incorporated (NYSE: ASGN), a leading provider of IT services and solutions to the commercial and government sectors, reported financial results for the quarter and year ended December 31, 2024.

Highlights

Fourth Quarter 2024

• Revenues were $1.0 billion
• Net income was $42.4 million
• Adjusted EBITDA (a non-GAAP measure) was $109.7 million (11.1 percent of revenues)
• Operating cash flows were $100.2 million and Free Cash Flow (a non-GAAP measure) was $88.9 million
• Repurchased 0.5 million shares of the Company's common stock for $43.9 million
• IT Consulting revenues were 59 percent of total revenues

Full Year 2024

• Revenues were $4.1 billion
• Net income was $175.2 million
• Adjusted EBITDA (a non-GAAP measure) was $452.0 million (11.0 percent of revenues)
• Operating cash flows were $400.0 million and Free Cash Flow (a non-GAAP measure) was $364.7 million
• Repurchased 3.5 million shares of the Company's common stock for $327.2 million
• IT Consulting revenues were 58 percent of total revenues
• Commercial Segment - New bookings were $1.3 billion; book-to-bill ratio was 1.1 to 1
• Federal Government Segment - New contract awards were $1.3 billion; book-to-bill ratio was 1.1 to 1

Subsequent Company Developments

• On January 30, 2025, the Company announced President Rand Blazer will transition to the role of Executive Vice Chairman effective March 1. As part of a planned succession, Shiv Iyer, former Americas Consulting and Industry X Lead Executive for Accenture, will become President and join the executive team.
• On February 4, 2025, the Company announced a definitive agreement to acquire TopBloc, LLC, a leading, high-growth, tech-enabled Workday consultancy, for $340 million in cash and equity.

Management Commentary

“Throughout 2024, we remained focused on advancing ASGN's business towards higher-end, high-value IT consulting solutions,” said ASGN Chief Executive Officer, Ted Hanson. “In the fourth quarter, commercial consulting revenues grew by 6 percent year-over-year, complemented by a double-digit increase in bookings. Similarly, in our federal government business, solid bookings led to a book to bill of 1.1 times on a trailing twelve-month basis. Growth in IT consulting revenues contributed to an expansion in our margins, with gross and Adjusted EBITDA margins exceeding our expectations for the quarter.”

Mr. Hanson continued, “ASGN is poised for a dynamic start to 2025. We are enhancing our strong leadership team with the addition of a new President. We are expanding our ERP capabilities with the signing of a definitive agreement to acquire TopBloc, and we are positioning our solutions capabilities in key areas like AI, cybersecurity, and data in high demand across our client base. While IT spending has yet to fully rebound, these strategic actions position us well for anticipated demand.”

Consolidated revenues for the quarter were $985.0 million, compared with $1.07 billion in the fourth quarter of 2023. From an industry perspective, the Company operates in six broad industry verticals. Commercial Segment revenues (70.3 percent of total revenues) totaled $692.7 million, compared with $748.6 million in the fourth quarter of 2023. Commercial Segment revenues are categorized into five verticals: (i) Consumer and Industrial, (ii) Financial Services, (iii) Technology, Media and Telecom ("TMT"), (iv) Healthcare, and (v) Business Services. Two of these five industry verticals saw year-over-year growth in the fourth quarter: TMT increased mid-single digits and Consumer and Industrial was up low single digits. The remaining three verticals declined. Federal Government Segment revenues (29.7 percent of total revenues), the sixth industry vertical, were $292.3 million, compared with $325.5 million in the prior-year period.

Total IT consulting revenues were $577.0 million (58.6 percent of total revenues), compared with $594.0 million (55.3 percent of total revenues) in the fourth quarter of 2023. Commercial Segment consulting revenues were $284.7 million, up 6.0 percent year-over-year. Federal Government Segment revenues, which are all IT consulting revenues, were $292.3 million, as stated above. Assignment revenues totaled $408.0 million (41.4 percent of total revenues), compared with $480.1 million in the prior-year period, and reflect continued softness in the more cyclical portions of the Commercial Segment business.

Gross margin for the fourth quarter of 2024 was 29.0 percent, an expansion of 60 basis points from the fourth quarter of 2023. Gross margin for the Commercial Segment was up 50 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 up 60 basis points.

Selling, general, and administrative (“SG&A”) expenses were $197.9 million, compared with $203.6 million in the fourth quarter of 2023. SG&A expenses included $1.9 million in acquisition, integration, and strategic planning expenses, which were not included in the Company's previously-announced guidance estimates.

Net income was $42.4 million ($0.95 per diluted share), compared with $50.3 million ($1.06 per diluted share) in the fourth quarter of 2023.

Adjusted EBITDA (a non-GAAP measure) was $109.7 million, or 11.1 percent of revenues ("Adjusted EBITDA margin," a non-GAAP measure), compared with $121.0 million or 11.3 percent of revenues in the fourth quarter of 2023.

Capital Resources and Capital Allocation

At December 31, 2024, the Company had:

• Cash and cash equivalents of $205.2 million
• Full availability under its $500.0 million Senior Secured Revolving Credit Facility (due 2028)
• Senior Secured Debt of $493.8 million (term loan B facility due 2030)
• Senior unsecured notes totaling $550.0 million at 4.625 percent (due 2028)

In the fourth quarter of 2024 the Company repurchased 0.5 million shares of its common stock for $43.9 million at an average price of $90.45 per share. Approximately $528.5 million remained available at quarter end for repurchases under the Company's stock repurchase plan.

First Quarter 2025 Financial Estimates

The Company's financial estimates for the first quarter of 2025, which are set forth below, assume no deterioration in the markets ASGN serves. These estimates do not include any acquisition, integration, or strategic planning expenses. Reconciliations of estimated net income to the estimated non-GAAP financial measures are included in the tables that accompany this release.

Conference Call

The Company will hold a conference call today at 4:30 p.m. ET to review its financial results for the fourth quarter and full year 2024 and to provide first quarter 2025 estimates. The dial-in number is 877-407-0792 (+1-201-689-8263 outside the United States), and the conference ID number is 13750060. Participants should dial in ten minutes before the call. The prepared remarks, supplemental materials and webcast for this call can be accessed at www.asgn.com.

A replay of the conference call will be available beginning today at 7:30 p.m. ET until February 19, 2025. The access number for the replay is 844-512-2921 (+1-412-317-6671 outside the United States for callers outside the United States) and the conference ID number is 13750060.

About ASGN Incorporated

ASGN Incorporated (NYSE: ASGN) is a leading provider of IT services and solutions to the commercial and government sectors. ASGN helps corporate enterprises and government organizations develop, implement, and operate critical IT and business solutions through its integrated offerings. For more information, please visit asgn.com.

Safe Harbor

Certain statements made in this news release are “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and involve a high degree of risk and uncertainty. Forward-looking statements include statements regarding our anticipated financial and operating performance.

All statements in this news release, other than those setting forth strictly historical information, are forward-looking statements. Forward-looking statements are not guarantees of future performance and actual results might differ materially. In particular, we make no assurances that the proposed revenue, expense, and profit estimates outlined above will be achieved. Additional examples of forward-looking statements in this press release include, without limitation, statements regarding our ability to attract, train, and retain qualified internal employees, the availability of qualified billable professionals, management of our growth, continued performance and improvement of our enterprise-wide information systems, our ability to successfully adapt to, integrate, and leverage new and developing technologies, including generative artificial intelligence, our ability to manage our litigation matters, the successful integration of acquisitions, and other risks detailed from time-to-time in our reports filed with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2023 as filed with the SEC on February 23, 2024. We specifically disclaim any intention or duty to update any forward-looking statements contained in this news release.