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Revenue: $1.031 billion for Q3 2024, flat sequentially, down 7.7% year over year.
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Adjusted EBITDA Margin: 11.3%, at the midpoint of guidance range.
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Commercial Segment Revenue: $718.8 million, down 8.1% year over year.
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Federal Government Segment Revenue: $312.2 million, down 6.6% year over year, up 1% sequentially.
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Gross Margin: 29.1%, up 20 basis points year over year.
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Net Income: $47.5 million for the quarter.
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Free Cash Flow: $127.9 million, 109% conversion of adjusted EBITDA.
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Commercial Consulting Revenue: $285 million, up 3.9% year over year, up 1.2% sequentially.
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Federal Segment Contract Backlog: Over $3.1 billion, coverage ratio of 2.5 times trailing 12-month revenues.
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SG&A Expense: $207.5 million, includes $1.1 million in acquisition and strategic planning expenses, and $3.6 million legal settlement accrual.
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Share Repurchase: $95.6 million spent, approximately 1 million shares repurchased at an average price of $92.6.
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Q4 2024 Revenue Guidance: $990 million to $1.01 billion.
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Q4 2024 Adjusted EBITDA Guidance: $103 million to $107 million, margin of 10.4% to 10.6%.
Release Date: October 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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ASGN Inc (NYSE:ASGN) reported Q3 2024 revenues of $1.031 billion, which were stable compared to the second quarter and within the company’s guidance range.
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The adjusted EBITDA margin was 11.3%, reflecting the company’s shift towards higher-end, high-value consulting solutions.
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Commercial consulting revenues improved 3.9% year over year and 1.2% sequentially, indicating growth in this segment.
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The federal government segment saw a sequential revenue improvement of 1%, with net new contract awards totaling $666.4 million, resulting in a book-to-bill ratio of 2.1 times for the quarter.
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ASGN Inc (NYSE:ASGN) has a strong pipeline of work, with significant bookings in both commercial and government sectors, indicating pent-up demand for its IT services.
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Overall revenues decreased by 7.7% year over year, with the commercial segment down 8.1% and the federal government segment down 6.6% compared to the prior year.
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Global economic uncertainty is impacting client IT services spending, with no meaningful increase observed yet.
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The health care industry vertical remained down year over year and sequentially, indicating challenges in this sector.
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Perm placement revenues have weakened, and the fourth quarter is expected to see a decrease in margins due to client furloughs and fewer billable days.
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ASGN Inc (NYSE:ASGN) anticipates no uptick in clients’ IT spend in the fourth quarter, reflecting ongoing caution in the market.