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The company clarified that the slower-than-expected contract parking was specific to the timing of residential lease-ups, not the overall trend. The construction impact on corporate demand was primarily concentrated in Detroit. They see the end of construction projects as a key positive driver for transient traffic in the second half. For 2026, Denver and Cincinnati were highlighted as major markets with improving demand drivers. Finally, they confirmed significant market demand from a wide array of buyers for the assets they are selling.

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CEO Stephanie Hogue clarified that slower-than-expected contract growth was due to the timing of residential lease-ups and that monthly contract disruption was primarily isolated to the Detroit Renaissance Center redevelopment. She confirmed the second-half outlook for transient traffic is conservative, with potential upside from construction completions in markets like Cincinnati and Denver. Hogue also identified Nashville as another market poised for recovery. Executive Chairman Manuel Chavez added that demand for their parking assets is significant from a wide array of buyers, putting them ahead of schedule on their disposition goals.

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President Stephanie Hogue explained that while transient parking rates are holding firm, monthly contract parking is seeing increased inbound demand as return-to-office trends continue. She anticipates that as utilization builds and garages fill up, pricing power will shift back to the company. Regarding ancillary revenue, Ms. Hogue noted that while EV charging stations are being installed, it will likely take several quarters to build customer awareness and utilization to a point where it generates meaningful revenue, with a current focus on garages with residential demand.

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President, CEO & Director Rick Hermanns responded that while the market has improved from a low point in May and early June, a significant recovery has not yet occurred. He noted that the anticipated demand boost from stricter immigration enforcement has been less than expected, though some recent client wins are encouraging. On expenses, Hermanns mentioned that SG&A will see a slight benefit in Q3 from the former CFO's departure, but no other major changes are anticipated. He confirmed the goal for workers' compensation is to reach a neutral expense level, with further, albeit smaller, improvements expected through the rest of 2025 and into 2026.

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The demand environment saw its low point in May/June and has stabilized but not fully recovered. The impact from ICE enforcement has been less than hoped, though some client wins are encouraging, and the financial professionals category is a bright spot. SG&A will decrease in Q3 due to a retired executive's salary no longer being on the books. The company continues to work towards making workers' compensation a neutral expense, with more improvement expected.

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Richard Hermanns (executive) stated that Q2 trends remain consistent with the challenging macroeconomic environment, with no dramatic shifts. He confirmed that stricter immigration enforcement is leading to new business wins as clients seek E-Verify compliant partners. Hermanns attributed the Q1 SG&A increase to timing differences in professional fees and minor RIF costs, which masked underlying progress. He noted the M&A pipeline is strengthening as prolonged weak demand makes potential targets more realistic on pricing. Finally, he explained that while they may hire a junior deal sourcer, they do not plan to backfill the VP of Corporate Development role in the near term.

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Executive Richard Hermanns and CFO Steven Crane addressed the questions. Hermanns explained that optimism for permanent placement stems from the market being at an abnormally low point with significant room for recovery as hiring normalizes. Crane confirmed Q3 workers' compensation expense was approximately $500,000, a $1 million improvement year-over-year. Hermanns added that the company has capacity for a 5-10% sales increase with minimal SG&A growth, though wage inflation is a potential factor. He also revealed that HireQuest completed two small acquisitions in the quarter and maintains an active pipeline for similar bolt-on deals.

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The executive explained that the permanent placement business has been at an abnormally low level and is expected to rebound. Workers' compensation expense was approximately $500,000, a $1 million improvement year-over-year, while core SG&A remained flat. The company has capacity for a 5-10% sales increase with minimal SG&A growth, though wage inflation could be a factor. The M&A pipeline is active with smaller deals, and two 'on-demand' staffing acquisitions were completed in the quarter.

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President of Branded Products Jake Himelstein attributed growth to a combination of strong backlog execution, market share gains, and improving client decision-making. CEO Michael Benstock expressed optimism for the Healthcare segment, expecting an institutional restock cycle and strong consumer demand in H2. He also noted the contact center pipeline is robust, with many deals in the final contract stages, poised to impact Q4 and 2026.

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Executive Michael Benstock explained that the Branded Products pipeline is growing due to aggressive recruiting and positioning the company as a tariff expert through webinars and white papers, which is driving new business despite some decision delays. For Contact Centers, a new sales team is bringing in more opportunities. Benstock confirmed the reduced guidance reflects conservatism due to macro uncertainty in the second half. He also stated that the company can pass on most tariff costs through price increases due to contractual allowances and the order-by-order nature of the promotional products business.

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Executive Michael Benstock provided a segment-by-segment breakdown of customer sentiment, noting positive signs mixed with tariff uncertainty in Branded Products, purchasing delays in Healthcare, and a focus on cost containment in Contact Centers. Executive Michael Koempel projected that the Branded Products gross margin would be fairly consistent year-over-year in 2025. He also confirmed no significant new SG&A investments are planned, and that the 2025 EPS guidance assumes an improvement in interest expense from a combination of lower average debt and rate assumptions.

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Michael Koempel (executive) confirmed the Q2 revenue shift was a few million dollars and explained the Q4 outlook is based on a tough comparison to a strong Q3. Michael Benstock (executive) detailed customer sentiment by segment, noting cautious optimism post-election but ongoing soft decision-making. Koempel added that recent growth-oriented SG&A investments are expected to be leveraged starting in 2025.

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CFO Nirupam Sinha stated the Q3 guidance is prudent, with the high end supported by continued demand and cross-selling, while the low end accounts for potential macro-driven project delays. He noted that while Q2 search productivity was high at $2.3M annualized, the trailing twelve-month figure is closer to the $2.0M target, which still signals strong demand. Sinha confirmed hiring is broad-based. CEO Tom Monahan added that unlike last year's single global conference, future team events will be spread more evenly throughout the year.

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Executive Nirupam Sinha addressed the consulting question, citing one-time Q1 charges and timing of bonus accruals, while reaffirming the long-term margin guidance of 11-13%. Executive Thomas Monahan described organic investments as focusing on two areas: acquiring top talent and enhancing their success with digital tools and IP. Monahan also noted that while client needs vary, key long-term themes driving demand include supply chain resilience, adapting to higher interest rates, and the expanding strategic role of the Chief People Officer.

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CFO Nirupam Sinha explained that the expected margin expansion in 2025 will primarily come from the non-search businesses as they gain leverage from shared corporate costs. Regarding Heidrick Consulting, he clarified that the Q4 variable compensation increase was partly a catch-up for strong full-year performance and is not expected to be a recurring material issue. He also confirmed that no significant currency impact was factored into the Q1 2025 outlook.

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CEO Thomas Monahan explained that the focus on organic growth is to fully leverage and scale powerful capabilities acquired in recent years, though selective M&A remains an option. For On-Demand Talent, Monahan cited a differentiated strategy in critical roles, while VP & Controller Steve Bondi noted Europe saw more confirmations and the U.S. saw higher contract values. Regarding G&A, Bondi confirmed it is a source of future leverage but declined to provide a specific 2025 target, linking leverage to successful organic growth.

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President & CEO Thomas Tedford affirmed that ACCO has a good range of price points for North America but is actively repositioning products in Brazil to compete with lower-cost Chinese imports. He noted it's hard to predict the sustainability of this competition. EVP & CFO Deborah A. O'Connor added that gross margin is expected to modestly improve in the second half as pricing actions are designed to cover tariff costs and maintain margins. She also confirmed a favorable FX benefit is expected, particularly in Q4.

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CFO Deb O'Connor attributed the favorable mix to a large Kensington sale and an early pull-forward of profitable back-to-school products. President and CEO Tom Tedford explained the higher gross margin target reflects ongoing cost structure optimization. He also confirmed that U.S.-bound sourcing from China will be 'insignificant' by year-end. O'Connor reaffirmed the full-year cost savings target of $40 million.

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EVP and CFO Deb O'Connor clarified that the comparable sales outlook excludes FX, noting an expected 4% headwind in Q1 tapering to 2% for the full year. President and CEO Tom Tedford addressed tariffs by highlighting ACCO's balanced global supply chain, which is not overly dependent on China. He mentioned that the company is passing on costs via price increases and actively managing its supply sources. Regarding M&A, Tedford described the pipeline as solid but emphasized a disciplined, balanced approach focused on synergistic, strategically relevant deals that would not adversely impact leverage.

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President and CEO Tom Tedford identified computer accessories (Kensington), business machines, and ergonomics as categories showing positive stabilization. He discussed a major product development review, assisted by a third party, aimed at improving revenue outcomes across the portfolio. He highlighted recent launches like the Kensington EQ line and confirmed he expects continued growth from the computer accessories business.

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CEO Mark Hussey detailed Huron's comprehensive performance improvement offerings, including revenue cycle, supply chain, and clinical operations, which help clients find both cost savings and growth opportunities. Regarding the Trelliant acquisition, Hussey explained that it is highly complementary to Huron's existing financial services practice, adding specialized expertise in risk, compliance, and financial crimes that is aligned with but not overlapping current capabilities, creating a more comprehensive solution.

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CFO John D. Kelly expressed confidence in the Commercial segment's 20%+ guided growth for 2025, driven by the AXIA acquisition and organic growth in digital and financial advisory, supported by a strong backlog. He confirmed that delayed Education projects are now at a run rate. CEO C. Hussey detailed plans to broaden the Healthcare offering by expanding financial advisory services, growing managed services, and pushing further into digital and payer-related services, leveraging deep client relationships.

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Chief Financial Officer John Kelly quantified the project shift from Q3 to Q4 as being in the '$5 million to $10 million range' and confirmed that the majority of these delays occurred in the Education segment. Executive C. Hussey characterized Q3 as an 'inflection point' for the Commercial segment, with a rebuilding pipeline. He expressed optimism for 2025, stating that 'the signs are pointing green and up' as clients appear to be moving forward with investments.

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CEO John Wasson explained that contract cancellations have flattened and there has been a pickup in contract modifications, led by the IT modernization area but also seen across complex program management. He expressed confidence that the federal technology business will return to growth in 2026. Regarding guidance, Wasson stated that while they are confident the revenue decline will not be as severe as 10%, it is too early to provide a specific number due to ongoing budget uncertainties. However, he noted that EPS is likely to be at the higher end of the guidance range due to strong commercial energy growth and cost management.

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Executive John Wasson confirmed that while the administration is expected to continue investing in IT modernization and AI, new opportunities are likely a second-half 2025 event that would primarily set up for potential growth in 2026. He reiterated that the 2025 forecast remains a 5% to 10% decline for the business, driven by the slow pace of new awards.

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Executive John Wasson noted that the renewable energy business is driven by strong economics and that the most at-risk portion, offshore wind, is not material to ICF's revenue. He described 2025 as a transition year due to a temporary slowdown in IT procurements as the new administration resets its strategy, but he anticipates new opportunities in 2026. Executive Barry Broadus confirmed that ICF will continue to repurchase shares opportunistically, citing the company's balance sheet capacity.

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Paul Maleh, Chairman, President & CEO, praised the Energy practice's remarkable organic growth, led by its internal leadership, and confirmed that while they are actively looking for inorganic opportunities, any acquisition must be a strong strategic fit. Regarding the new executive roles, Maleh explained the promotions aim to elevate the strategic value provided by the corporate team to the consulting practices. He characterized the incoming analyst class as a typical size, clarifying that while aggregate headcount is flat, the company is actively investing in and expanding headcount within its high-growth practices.

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CEO Paul Maleh declined to provide specific details on the restructuring to respect the individuals and avoid misrepresenting the health of the affected practices, noting the disclosure was for financial clarity. He praised the Antitrust & Competition Economics practice for its consistent record-setting performance, driven by both merger-related work and antitrust investigations. Maleh confirmed that cross-practice and cross-geography collaboration is a frequent and 'underreported' part of CRA's strategy, focused on bringing the best talent to bear on client problems.

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Executive Paul Maleh stated that the strong 2025 guidance builds on a record 2024 and anticipates broad-based growth, with a goal for practices like Life Sciences and Energy to increase their growth rates. He noted the margin guidance reflects confidence in maintaining recent profitability gains. Maleh sees potential for utilization to rise above the mid-70s but acknowledged that faster growth in management consulting could temper this. He described a competitive but opportunity-rich market for senior talent, where CRA aims to be a net gainer from industry disruption.

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CEO Paul Maleh responded that voluntary attrition rates remain on the low side and the company is planning accordingly, having not yet seen a return to higher historical levels. Regarding the U.S. election, Maleh expressed confidence, stating that the firm has operated successfully under different administrations and is well-positioned to adapt its strong service portfolio to meet evolving client needs, irrespective of the outcome.

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Chairman & CEO J. Bryan King addressed the margin goals, stating TestEquity has a clear path to double-digit EBITDA margins, driven by high-value specialty offerings. For Lawson, he explained that current investments in the sales transformation are aimed at achieving structural EBITDA margins in the mid-to-high teens over time, with a long-term goal of over 20%. EVP & CFO Ron Knutson added that while the military market saw a slight Q2 uptick, it remains sporadic; excluding its impact, Lawson's organic sales grew 0.5%. King also highlighted that Lawson's core 'street business' has begun to show positive growth, a key indicator of the transformation's success.

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Chairman & CEO J. Bryan King explained that TestEquity has a clear path to double-digit EBITDA margins by optimizing its high-value specialty offerings. For Lawson, he reiterated a long-term goal of mid-to-high teens or even 20%+ EBITDA margins post-investment cycle. EVP & CFO Ron Knutson added that excluding the military headwind, Lawson's organic ADS grew 0.5% in the quarter. King also highlighted that Lawson's core 'street business' has begun to show positive growth for the first time in years.

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Executive John King stated that while the current environment will create more M&A opportunities, DSG is taking a measured approach, preferring to let market complexity from Washington settle. He noted the M&A pipeline is robust but that share buybacks are currently the most attractive use of capital. On reshoring, King confirmed a firm belief in the long-term benefits, stating that DSG's sourcing expertise becomes more valuable in murky times and that the company has been positioning itself for this shift for years.

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Executive John King confirmed that Q4 organic growth was firmer than anticipated, driven by momentum in the Gexpro Services and Test and Measurement verticals. Regarding Lawson, King detailed the significant investments in the sales force and noted that reducing historical rep turnover is a key to long-term margin improvement, expecting good progress in 2025 but a multi-year journey. He described the military order situation as an 'enigma' with uncertain timing. For Source Atlantic, he explained that margin improvement hinges on cost structure optimization and facility consolidation, which should be completed by mid-year, though seasonality will affect near-term results. Executive Ronald Knutson added color on Lawson's improving rep productivity and the conservative forecasting approach for the military business.

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Executive Ronald Knutson explained that most of the new territories are greenfield opportunities identified through data analysis, and that hiring rates increased by approximately 50% in Q3. Executive John King added that new territories are scoped for higher revenue to improve new rep success, and acknowledged that the company was previously too slow to hire while implementing new sales tools.

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J. Joel Quadracci, President, CEO, Chairman & Director, expressed cautious optimism regarding the USPS, citing a new Postmaster General and a Postal Regulatory Commission review that acknowledged rising rates negatively impact volume. He detailed how Audience Builder 2.0 democratizes data access for faster, more accurate audience creation, simplifying marketing complexities for clients. Mr. Quadracci confirmed strong growth in targeted print, such as a 7% increase in direct mail and packaging sales, which underpins the strategy to reach net sales growth by 2028 by offsetting declines in large-scale print.

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J. Joel Quadracci, President, CEO, & Chairman, expressed optimism regarding the new Postmaster General and a recent Postal Regulatory Commission review that acknowledged the negative impact of rate hikes on volume. He highlighted a new 10% catalog discount test as a positive step. Quadracci explained that Audience Builder 2.0 democratizes and automates access to their vast data stack, enabling faster and more accurate audience creation for clients. He pointed to strong growth in targeted print categories like direct mail (up 7%) and in-store (up 13%) as tangible evidence that their strategy of integrating complex solutions to drive client ROI is progressing toward the 2028 net sales growth goal.

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J. Joel Quadracci, President, CEO, Chairman & Director, expressed cautious optimism regarding the postal service, citing a new Postmaster General, a 10% catalog discount test, and a Postal Regulatory Commission review that could lead to CPI-capped rate increases. He explained that Audience Builder 2.0 democratizes and automates access to Quad's extensive data stack, enabling faster and more accurate audience creation. Mr. Quadracci emphasized that the strategy's success is evident in the growth of targeted print categories like direct mail and packaging, which are benefiting from these advanced data applications, keeping the company on track for its 2028 growth inflection point.

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J. Joel Quadracci, President, CEO, Chairman & Director, expressed cautious optimism regarding the USPS, citing a new Postmaster General and a Postal Regulatory Commission review that acknowledged the negative impact of rate hikes on volume. He explained that Audience Builder 2.0 automates and simplifies access to Quad's extensive data stack, enabling faster and more precise audience creation for clients. Quadracci highlighted strong year-to-date sales growth in direct mail and in-store marketing, reinforcing the company's strategy to achieve overall net sales growth by 2028 by expanding these targeted offerings.

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J. Joel Quadracci, President, CEO, Chairman & Director, expressed cautious optimism regarding postal rates, citing a new USPS catalog discount test and a regulatory review suggesting a return to CPI-capped increases. He explained that Audience Builder 2.0 democratizes access to Quad's data stack, using AI to automate and accelerate the creation of high-propensity audiences for clients. Quadracci pointed to strong year-to-date sales growth in targeted print areas like direct mail and in-store as concrete evidence of the company's strategic progress toward its long-term growth inflection point.

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J. Joel Quadracci, Chairman, President and CEO, explained that while some clients have made minor marketing adjustments due to tariff-related product uncertainty, a major pullback has not yet occurred. He noted that a new USPS promotion for catalogers starting in October could offset the July rate hike. Quadracci also detailed that the Enru acquisition adds high-density co-mailing capabilities, benefiting the entire industry. He confirmed In-Store Connect has expanded to over 45 stores, with new grocer wins. CFO Anthony Staniak added that the expansion of the Save Mart partnership is a positive development.

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CFO Tony Staniak detailed increased capital expenditures for technology like AI and In-Store Connect, alongside higher operating expenses to scale new offerings. CEO J. Joel Quadracci and CFO Tony Staniak explained that growth in Agency Solutions, International Print, and Targeted Print is expected to improve the revenue trend. Quadracci elaborated on the monetization of At-Home Connect as an integrated service driving direct mail volume, addressed tariff risks by noting pre-purchased paper inventory, and highlighted ongoing cost management through AI, labor flexibility, and process automation.

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J. Joel Quadracci, Chairman, President & CEO, explained that the Google partnership leverages Quad's proprietary data stack with AI to create personalized content at scale, which he sees as a significant differentiator with strong early client interest. He noted the lower leverage target is due to both the European divestiture and the Saratoga Springs asset sale. CFO Anthony Staniak added that the European sale's timing means it won't materially impact 2024 sales guidance and confirmed the company remains bullish on its Americas operations, highlighting a strong quarter in Mexico.

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Chief Financial Officer Troy Anderson explained the 1% drag is a conservative estimate based on leading indicators and customer uncertainty. Chief Executive Officer Peter Quigley detailed that the new Enterprise Talent Management (ETM) segment combines offerings to provide comprehensive solutions for large customers, expanding market share. He highlighted an example of converting a client to a higher-margin bespoke solution. He also noted strong, long-term opportunities in semiconductors and renewables, where Kelly supports clients from facility construction through production.

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CEO Peter W. Quigley described customer sentiment as cautious due to policy uncertainty. CFO Troy Anderson detailed the H1 2025 outlook: Education growth will slow due to tough comps, P&I will be flat, SET will see declines similar to Q4, and OCG will see a revenue mix shift to higher-margin MSP/RPO. Anderson also stated that a final decision on segment reporting changes will be announced with Q1 results.

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CEO Peter W. Quigley attributed the SET softness to enterprise caution on large tech projects but noted an encouraging rebound in September. He credited the P&I segment's improvement to the success of its 'omnichannel strategy,' which combines centralized delivery, a focus on local growth markets, and the Kelly Now mobile app. Quigley stated that Kelly is taking market share due to its clear leadership in Education, innovative solutions in P&I and SET, and its technology-driven Helix platform in OCG, which is winning large MSP deals.

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CEO Peter W. Quigley attributed the organic growth to market share gains from transformation efforts, including the omnichannel strategy and a focus on large enterprise clients. CFO Olivier Thirot detailed that the H2 forecast is based on continued double-digit growth in Education, modest sequential improvements elsewhere, and a favorable year-over-year comparison. For SG&A, Thirot clarified that while year-over-year declines will moderate, organic SG&A expenses are expected to be sequentially flat from H1 to H2.

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Executives reiterated that significant gross margin improvement from bill-pay spreads is unlikely due to competition. The main drivers will be business mix and operational efficiencies. Regarding insurance costs, some factors are uncontrollable (national trends), while others are related to timing (headcount changes) and annual premium renewals, the outcome of which will be known in Q4.

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CFO William Burns stated that significant gross margin improvement from the bill-pay spread will be 'hard to come by' due to competition. He expects gains to come from business mix and operational efficiencies. Regarding insurance costs, Burns noted that while premiums are a factor, recent pressure was partly due to a temporary lag related to a declining headcount, which he expects to normalize.

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CFO William Burns reiterated that the competitive environment makes significant bill-pay spread expansion difficult. He stated the majority of gross margin improvement will come from a favorable business mix and operational efficiencies, not rate leverage. Regarding insurance, Burns explained that costs are driven by both annual premium renewals and experience. He noted that health costs were temporarily elevated relative to a declining headcount but should normalize, though rising national healthcare costs remain a factor.

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CEO John Martins confirmed a new Intellify contract was signed last month and that the pipeline remains one of the largest in the company's history, although client decision-making cycles have slowed. He clarified there is a 'full commitment' to the local staffing business, with the strategy focused on building strategic partnerships with clients that have consistent volume needs rather than sporadic ones.

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Chairman and CEO Julie Howard explained the guidance change was due to the Ankura TSA extension, increased organic investments, and a more cautious view on the Healthcare consulting recovery, though she remains confident in its rebound. She attributed the FSAC slowdown to client work pauses and investment timing. CFO Stephen Lieberman clarified that HSS support costs were in line with expectations and noted the company is progressing on its capital return target, which is factored into share count projections. Regarding M&A, management acknowledged a competitive, 'frothy' market but reiterated their commitment to a disciplined approach focusing on strategic, cultural, and financial fit.

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CEO Julie Howard and CFO Stephen Lieberman clarified the HSS venture is currently with Baptist Health South's main hospital, with opportunities to expand to other hospitals in their system and the region. Mr. Lieberman stated that G&A rationalization is an ongoing process with more impact expected in future quarters. He confirmed the base revenue cycle business (excluding HSS) hit its highest margin since 2016 but declined to disclose the specific TD&P margin. He also detailed that the India center is focused on robotic process automation to improve efficiency for both internal operations and client services.

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CFO Stephen Lieberman attributed the guidance improvement to strong performance in the FSAC and Energy segments offsetting softness in healthcare. He noted Energy's growth was broad-based. CEO Julie Howard described the healthcare pipeline as strong but converting to smaller-scoped projects. Lieberman clarified the $5 million JV cost is the expected operating loss for 2018. Howard added that TD&P margin improvement is a work-in-progress, driven by headcount actions, better contract management, and new leadership.

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