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Chairman & CEO Michael Connors identified energy, utilities, banking, pharma, and healthcare as key commercial verticals driving AI demand. He also noted that public sector work is growing, particularly among state governments focused on optimization. Regarding M&A, he described the Martino and Partners acquisition as a strategic move to expand public sector reach in Italy and stated that ISG continues to surgically target acquisitions that add recurring revenue and AI capabilities.

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CFO Michael Sherrick explained that Q1's high utilization is at the upper end of their target range and is not expected to increase further, with hiring remaining disciplined. He also noted that with leverage at the low end of their target, they will continue to evaluate all capital allocation options. CEO Michael P. Connors added that their M&A focus is on recurring revenue and digital/AI assets. He also confirmed that the U.S. public sector business saw double-digit growth in Q1 and has a solid pipeline.

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Michael P. Connors, Chairman and CEO, detailed the AI repositioning, highlighting investments in AI-specific research, the AI-powered Tango platform, a growing AI advisory business, and AI certification for all client-facing staff. Michael Sherrick, EVP and CFO, clarified that of the $7 million sale escrow, $2 million was collected in Q4, with another $2 million sitting as a receivable on the year-end balance sheet to be collected in Q1.

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CFO Michael Sherrick provided the Q3 headcount as 1,467, noting it would decrease by about 115 post-divestiture. CEO Michael P. Connors outlined a target debt-to-EBITDA ratio of 2.0x to 2.5x and confirmed ISG is actively exploring acquisitions focused on recurring revenue or AI. Connors also noted that while the project mix is still heavy on cost optimization, he expects a shift toward transformation projects in 2025 as business confidence improves.

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CEO Barry McCarthy noted that the quarter saw a continuation of generalized consumer stress rather than any new, extreme trends. CFO Chip Zint added that forecasting was highly accurate across the business, with the only softness occurring in the low-margin promotional products, a strategic choice to protect profitability. On the M&A pipeline, McCarthy reiterated a disciplined capital allocation strategy focused on debt reduction, stating the company will remain opportunistic for acquisitions like CheckMatch that add scale to existing businesses rather than pursuing deals for the sake of it.

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President and CEO Barry McCarthy attributed partnership success to the trusted Deluxe brand, a flexible product platform, and provably superior customer service. CFO Chip Zint addressed the capital allocation question, reiterating the full-year CapEx guidance of $90-$100 million and stating that while not perfectly linear, no material quarterly fluctuations are expected. He also reaffirmed the year-end leverage target of approximately 3.3x.

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CEO Barry McCarthy responded that it is too early to see any meaningful impact from the change in administration and that the company's guidance assumes a stable macroeconomic environment. He noted that consumer spending appears solid but bifurcated. On product innovation, McCarthy confirmed a continued focus on B2B Payments, Merchant, and Data, leveraging the company's cloud infrastructure to add features more rapidly. He highlighted the R36+ platform in B2B and ongoing investments in the Data platform as examples of this strategy, signaling more to come through 2026.

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President and CEO Barry McCarthy credited the Check segment's stability to strong execution and prior investments in variable-cost printing technology. Regarding North Star, McCarthy expressed pride in the progress, confirming that projects comprising over $100 million of the $130 million targeted EBITDA improvements are now in execution or complete. CFO Chip Zint added that the program's restructuring spend is trending toward the low end of the initial forecast, improving its overall financial returns and positively impacting free cash flow.

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CEO Gary Kramer expressed confidence in the company's asset-light expansion model, confirming plans for one or two more branch openings by year-end and viewing the strategy as a consistent future growth driver. Regarding client activity, Kramer stated that hiring was slower than forecasted in Q2 due to macroeconomic uncertainty causing businesses to pause, but he now sees greater stability, allowing clients to resume long-term planning.

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Executive Gary Kramer highlighted the Kaiser Permanente medical offering as a major success, noting that participant additions were 2.5 times higher than initial annual estimates within just seven months. He also mentioned the new applicant tracking system is receiving positive early feedback. Conversely, Kramer identified the broader IT product roadmap, aimed at building out the full 'hire to retire' employee life cycle, as a longer-term play. He stated that full adoption will take time and is not expected to have a material effect on the organization in 2025.

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Executive Anthony Harris responded that the strong performance was broad-based across geographies and industries, rather than being driven by a specific vertical, though he highlighted the success of the asset-light market development managers. Executive Gary Kramer emphasized that BBSI's core differentiator remains its local, high-touch service teams. He explained that when product offerings are comparable to competitors, the value of BBSI's people becomes the deciding factor for clients.

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CEO Gary Kramer hinted at a 'well-baked product road map' with new products currently in beta testing that will be announced next quarter, declining to share specifics prematurely. Regarding retention, he stated it remains strong and above their 90% target. The majority of client runoff is due to businesses closing or being sold via M&A, which he described as a natural part of the business cycle. He attributed the high retention to the deep integration of BBSI's local service teams with client operations.

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CEO Tom Monahan explained that hiring is crucial for growth to capture 'white space' with existing and new clients, leveraging the firm's culture to attract talent, particularly early-career professionals. CFO Nirupam Sinha clarified that the hiring impact would be moderate but sufficient to support 2026 growth, with costs coming online smoothly in the second half. Regarding cash, Sinha noted upcoming earn-out payments and the potential for using cash for acquisitions or lift-outs that originate from hiring conversations.

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Executive Thomas Monahan explained that every economic downturn is unique, but Heidrick is well-positioned due to its diversified business, variable cost structure, and zero debt. He noted they are not yet seeing a slowdown. Executive Nirupam Sinha added that cash use priorities are upcoming earn-out payments from past acquisitions and organic investments, which can sometimes evolve into smaller acquisitions. Monahan concluded that client M&A is one of many transformation activities, like cost-outs or digital initiatives, that drive demand for Heidrick's leadership advisory services.

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CEO Tom Monahan responded that C-suite turnover has been relatively consistent, with the company's success driven by strong client engagement. He noted that federal government spending is an immaterial part of their business, but broader economic changes prompt clients to re-evaluate their leadership needs, creating opportunities. Regarding M&A, he stated it was not a significant factor in the guidance, observing that while there's some optimism, higher interest rates remain a consideration, though clients are adapting to this new reality.

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CEO John Wasson addressed all points. On state and local, he noted that despite speculation about FEMA's future role, federal funding for disaster recovery has not decreased, and ICF is prepared to support states if their responsibilities increase. On M&A, Wasson stated the primary focus is on acquiring firms in the commercial energy sector to add scale and scope, while deals in federal and disaster recovery are unlikely in the near term due to market uncertainty. Regarding ICF Fathom, he described it as a proprietary platform using agentic AI to modernize federal systems, enabling rapid prototyping and demonstrating value to clients quickly.

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Executive John Wasson identified potential HHS opportunities related to children's health, pesticides, and food additives, with more clarity expected in the second half of the year. He stated that any near-term M&A would likely be a smaller, tuck-in acquisition in the energy sector. CFO Barry Broadus added that federal M&A activity has slowed, but valuations in other target markets like energy remain stable, and ICF has the balance sheet capacity to execute a deal.

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Executive John Wasson stated that a federal acquisition is highly unlikely in 2025 due to market uncertainty, but a tuck-in acquisition in the energy sector could be possible later in the year. He confirmed that key priorities are managing the business carefully, buying back stock, and deleveraging. Executive Barry Broadus explained that Q1 guidance was provided to offer direction amid market volatility and that the practice may continue.

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CFO Barry Broadus stated that strong cash flow has enabled significant debt reduction, giving the company ample capacity and flexibility to pursue M&A. CEO John Wasson added that ICF is actively but disciplinedly exploring targets, particularly in energy and federal health IT. Wasson noted that while valuations in high-interest areas remain lofty, there has been some movement toward alignment, and the key factor for a deal is identifying synergistic value.

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Paul Maleh, Chairman, President & CEO, attributed the guidance raise to strong, continuous performance and a healthy lead flow, noting that visibility remains stable despite geopolitical uncertainty. He stated that while the antitrust practice is performing at a record level, there hasn't been a noticeable shift in regulatory approach or deal size in the short term. Maleh confirmed that recent rate increases have been successfully implemented, with a continued focus on delivering value and efficiency. He also explained that the bulk of share repurchases occurred in Q2, reflecting the company's bullish outlook and a limited buying window in Q1.

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CEO Paul Maleh stated he couldn't tie the quarter's momentum to any single cause, attributing the initial slowness to general uncertainty that can cause client pauses. He emphasized the broad-based nature of the recovery, with contributions coming from all parts of the portfolio rather than a specific vertical. On the return-to-office topic, Maleh noted no significant shift at CRA, with employees averaging just over three days in the office, which he compared to a flexible pre-COVID environment.

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Paul Maleh, an executive, explained that the high 78% utilization was driven by both a busy Q4 and a structural mix shift towards the higher-utilization Legal & Regulatory segment. He affirmed that long-term headcount growth should still align with revenue growth. Maleh stated it was too early to assess the new administration's impact, despite low January M&A figures, and confirmed that Q4's strength was consistent throughout the period, not just a late surge.

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CEO Paul Maleh stated that the quarter's strength was consistent month-over-month, unlike the volatility seen in the prior year. He attributed the Antitrust practice's nearly 30% growth to the team's exceptional performance, noting that projects are larger and longer-lived, supplemented by constant pipeline replenishment. Maleh confirmed that lead conversion rates have returned to the historical norm of roughly two-thirds. For Q4, he anticipates no unusual disruptions beyond normal holiday seasonality.

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President & CEO Jerry Grisko explained that client-facing changes were intentionally minimized during the busy season. He acknowledged some initial, well-intended process friction on the Attest side that has since been course-corrected. Grisko identified two main areas of discretionary weakness: M&A-related advisory services, where transaction sizes are smaller, and the market-dependent SEC attest practice from Markham, which has seen reduced activity due to fewer IPOs and debt issuances.

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President and CEO Jerry Grisko stated that client conflicts resulting from the Marcum transaction were anticipated, factored into their financial model, and are now largely resolved. He explained the slowdown in the SEC audit practice, a new area for CBIZ from Marcum, is logically tied to clients pausing fundraising and S-1 filings due to market uncertainty. Regarding pricing, Grisko noted that CBIZ's disciplined approach resulted in a 'nice lift' in Q1, but acknowledged that a prolonged challenging environment could increase competitive pricing pressure in the future.

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CEO Jerry Grisko reported that client retention from both legacy Marcum and CBIZ has been very strong, with attrition from client conflicts coming in at or below modeled expectations. He noted significant excitement from the Marcum team about cross-selling opportunities. Regarding pricing, Grisko stated that strong demand allows for continued pricing power, which will be a key driver of organic growth. He highlighted that the combined firm now has 10 industry or specialty practices with over $100 million in revenue each, significantly accelerating their industry-focused growth strategy.

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CFO Ware Grove attributed sustained pricing power to analytical tools implemented years ago that allow for granular, targeted pricing actions, a practice now embedded in the annual process. He also noted Marcum employs a very similar approach. President and CEO Jerry Grisko added that Marcum's client retention rates are very similar to CBIZ's, describing both as 'best-in-class' and in the top decile of the industry, indicating no need for corrective action.

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CEO Joseph Hanna described technology investments as essential for system upgrades, cloud migration, and incorporating new tools like AI to remain competitive. He confirmed the M&A pipeline is active, with a focus on building relationships to be prepared for opportunities. CFO Keith Pratt reiterated a measured outlook on portable storage, stating that while Q2 was encouraging, it is prudent to await more evidence of a sustained recovery. Pratt also noted that lower interest expense was driven by lower rates and debt, and the current run rate is a good indicator for the remainder of the year.

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Executive Joseph Hanna confirmed an active M&A pipeline with both large and tuck-in opportunities and stated that the company's low leverage provides the 'dry powder' to execute strategic transactions. Regarding personnel, Hanna said that hiring has resumed successfully after being paused during a previously terminated merger. He expressed satisfaction with the quality of available candidates and the company's ability to fill necessary roles.

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Executive Joseph Hanna responded that the California bond is positive news that ensures funding is available for education projects. However, he stated that while the company is positioned to assist with any weather-related recovery, he does not expect it to be a 'huge needle mover' for financial results. On the topic of M&A, Hanna explained that opportunities still exist in the consolidated modular space. He noted the portable storage market is more fragmented, with tuck-in acquisition opportunities often arising from owner-specific life events rather than broad economic cycles, ensuring a steady stream of potential deals.

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Executive Keith E. Pratt explained that the merger termination fee was used to pay down debt in Q3, resulting in a comfortable leverage ratio of 1.75x, and he anticipates Q4 SG&A will increase due to resumed hiring. Executive Joseph Hanna added that McGrath is updating its M&A priorities, focusing on the Modular and Portable Storage businesses to expand its geographic footprint. He also confirmed that some delayed internal investments in personnel and IT will now move forward.

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President and CEO Scott Salmirs described the M&A pipeline as the most robust it has been in the last couple of years, with a focus on acquisitions that deepen capabilities and create strategic value in key segments like M&D. For B&I, he noted significant regional variations, highlighting strength in the Midwest and New York City, a rebound in San Francisco driven by AI, and pockets of growth in the Carolinas, while also pointing out that performance can vary even within a single city.

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President and CEO Scott Salmirs described AI applications as being in 'early days' but highlighted examples like the ABM Clean app for labor deployment, improving RFP responses, and future HR uses for predicting candidate retention. On M&A, Salmirs noted a slight increase in deal flow and that ABM is now in a position to consider acquisitions again after pausing for its major internal technology transformation.

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COO David Kelly stated that candidate availability has not materially changed over the last 9-12 months, which is reflected in the stability of pay rates. CFO Jeff Hackman explained that Kforce became more aggressive with buybacks in Q1 and April to capitalize on market volatility, reflecting management's confidence in the firm's future. He emphasized Kforce's long-term strategy of returning capital to shareholders, noting approximately $1 billion has been returned since 2007.

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CFO Jeff Hackman reiterated Kforce's long-standing capital return strategy, noting the company returned ~75% of operating cash flow in 2024 and expects more of the same in 2025. He emphasized that the bar for M&A remains very high due to past experiences, and the focus remains on organic growth and returning capital. Regarding disruptions, Hackman and Executive Joseph Liberatore confirmed there was no material business impact from the hurricanes, but Liberatore commended the team's fortitude in advancing strategic initiatives despite personal challenges.

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CFO Jeff Hackman reaffirmed the company's commitment to its historical capital return policy, noting no change in approach. CEO Joseph Liberatore credited Kforce's competitive strength to its focused execution and simple business model. COO David Kelly clarified that the improvement in financial services was not broad-based but driven by specific clients' mission-critical projects, cautioning against viewing it as a sector-wide trend.

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