Executive Summary

Q4 2024 revenue was $0.985B, down 8.3% YoY, with gross margin 29.0% (+60 bps YoY); adjusted EBITDA margin 11.1% exceeded expectations despite slightly lower revenue versus guidance due to weaker federal software license sales .
Versus company guidance, ASGN delivered a beat on adjusted EBITDA ($109.7M vs $103–$107M), adjusted EPS ($1.28 vs $1.18–$1.24), GAAP EPS ($0.95 vs $0.88–$0.94), and gross margin (29.0% vs 28.4%–28.6%); revenue missed the low-end ($0.985B vs $0.990–$1.010B) .
Commercial consulting grew 6% YoY with strong bookings (book-to-bill 1.2x) while federal segment bookings returned to 1.1x TTM; management highlighted momentum in TMT and early signs of improvement at big banks on a billable-day adjusted basis .
Strategic catalysts: announced TopBloc acquisition to expand ERP/Workday capabilities (~$150M FY25 revenue; high-teens EBITDA margin), and leadership transition with new President (ex-Accenture), reinforcing consulting scale and AI/cyber/data positioning .

What Went Well and What Went Wrong

What Went Well

Gross and adjusted EBITDA margins exceeded expectations due to mix shift toward high-margin commercial consulting and margin expansion within those revenues; consolidated GM 29.0% (+60 bps YoY) and adjusted EBITDA margin 11.1% .
Commercial consulting revenues rose 6% YoY to $284.7M with book-to-bill 1.2x and double-digit bookings growth; TMT and Consumer & Industrial verticals grew YoY, evidencing resilient demand for cloud, data, cybersecurity and AI-led solutions .
Management strengthened ERP capabilities via definitive agreement to acquire TopBloc (preferred Workday partner), expected to be immediately accretive on an adjusted basis, bolstering AI/data-led enterprise initiatives; “ASGN is positioned…in key areas like AI, cybersecurity, and data” .

What Went Wrong

Revenue missed company guidance low-end primarily from lower-than-expected federal software license revenues (~$20–$30M shortfall) and delays in certain R&D projects due to continuing resolution; federal revenues fell 10.2% YoY to $292.3M .
Assignment revenues declined 15% YoY to $408.0M amid continued softness in cyclically sensitive parts of commercial; overall consolidated revenue decreased 8.3% YoY .
Federal license variability and procurement pacing raised execution risk intra-quarter; management cautioned agency-specific mixed dynamics and procurement choices to buy licenses direct, which carry little margin and can be “whimsical” .

Financial Results

Consolidated performance vs prior periods

Metric	Q2 2024	Q3 2024	Q4 2024	Q4 2023
Revenues ($USD Billions)	$1.035	$1.031	$0.985	$1.074
Gross Margin %	29.1%	29.1%	29.0%	28.4%
Net Income ($USD Millions)	$47.2	$47.5	$42.4	$50.3
Diluted EPS ($USD)	$1.02	$1.06	$0.95	$1.06
Adjusted EBITDA ($USD Millions)	$117.1	$116.9	$109.7	$121.0
Adjusted EBITDA Margin %	11.3%	11.3%	11.1%	11.3%

Segment revenues and margins

Segment	Q2 2024 Revenue ($MM)	Q3 2024 Revenue ($MM)	Q4 2024 Revenue ($MM)	Q2 2024 GM%	Q3 2024 GM%	Q4 2024 GM%
Commercial	$725.7	$718.8	$692.7	32.7%	32.8%	32.6%
Federal Government	$309.0	$312.2	$292.3	20.6%	20.7%	20.5%
Total	$1,034.7	$1,031.0	$985.0	29.1%	29.1%	29.0%

KPIs and mix

KPI	Q2 2024	Q3 2024	Q4 2024
IT Consulting Revenues ($MM, % of total)	$590.5, 57.1%	$597.2, 57.9%	$577.0, 58.6%
Commercial Consulting Revenues ($MM)	$281.5	$285.0	$284.7
Assignment Revenues ($MM)	$444.2	$433.8	$408.0
Commercial Consulting Bookings ($MM)	—	$282.5 (TTM book-to-bill 1.1x)	$348.2 (Q4 book-to-bill 1.2x; TTM 1.1x)
Federal New Contract Awards ($MM)	TTM $949.1 (book-to-bill 0.7x)	$666.4 (Q3 book-to-bill 2.1x; TTM 0.9x)	$283 (Q4 book-to-bill 1.0x; TTM 1.1x)
Federal Backlog	~$3.1B (coverage ~2.5x TTM revs)	~$3.1B (coverage ~2.5x)	>$3.1B (coverage ~2.5x)
Free Cash Flow ($MM)	$85.4	$127.9	$88.9
Share Repurchases	1.1M shares; $108.0M	1.0M shares; $95.6M	0.5M shares; $43.9M

Actual vs Q4 2024 company guidance

Metric	Guidance Q4 2024	Actual Q4 2024	Result
Revenues ($MM)	$990–$1,010	$985.0	Miss
Adjusted EBITDA ($MM)	$103–$107	$109.7	Beat
Adjusted EPS ($)	$1.18–$1.24	$1.28	Beat
GAAP Diluted EPS ($)	$0.88–$0.94	$0.95	Beat
Gross Margin %	28.4%–28.6%	29.0%	Beat
Effective Tax Rate %	28.0%	28.5% implied by guidance; actual provision $16.9M on pre-tax $59.3M	In line

Drivers: revenue miss tied to lower federal license revenues vs plan; margin beat from mix shift and commercial consulting expansion .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenues ($MM)	Q4 2024	$990–$1,010	Actual $985.0	Miss vs guidance
Adjusted EBITDA ($MM)	Q4 2024	$103–$107	Actual $109.7	Beat vs guidance
Adjusted EPS ($)	Q4 2024	$1.18–$1.24	Actual $1.28	Beat vs guidance
GAAP EPS ($)	Q4 2024	$0.88–$0.94	Actual $0.95	Beat vs guidance
Gross Margin %	Q4 2024	28.4%–28.6%	Actual 29.0%	Beat vs guidance
Revenues ($MM)	Q1 2025	—	$950–$970	New
SG&A ($MM)	Q1 2025	—	$204.7–$208.3	New
Gross Margin %	Q1 2025	—	28.5%–28.7%	New
GAAP EPS ($)	Q1 2025	—	$0.63–$0.69	New
Adjusted EBITDA ($MM)	Q1 2025	—	$91–$95	New
Adjusted EPS ($)	Q1 2025	—	$0.91–$0.97	New
Effective Tax Rate %	Q1 2025	—	28.0%	New

Management flagged typical ~100 bps margin headwind in Q1 from payroll tax reset and no TopBloc contribution in Q1 guidance; TopBloc expected ~$150M FY25 revenue and high-teens EBITDA margin post-close .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2024)	Previous Mentions (Q3 2024)	Current Period (Q4 2024)	Trend
AI/technology initiatives	Positioning for AI use cases; focus on cloud/data/cyber; consulting ~57% revenues	Multiple AI/data examples; federal AIML awards; consulting bookings solid (TTM 1.1x)	GenAI chatbot, GRC certifications, retail onboarding CoE; partnerships (AWS/Azure/ServiceNow); TopBloc adds ERP/Workday data footprint	Strengthening; more tangible pilots in commercial; ERP adds leverage
Macro demand/IT spending	Clients cautious; Q2 macro consistent with Q1	Stable demand; no meaningful accelerations; watching confidence/interest rates/election	Business confidence improving but IT spend not fully rebounded; commercial demand similar to Q3	Gradual, steady; inflection not yet
Federal segment	TTM book-to-bill 0.7x; year-over-year decline due to fewer licenses	Q3 book-to-bill 2.1x; backlog ~$3.1B (2.5x coverage); 100% recompete win rate	Q4 quarter book-to-bill 1.0x; TTM back to 1.1x; licenses weaker; backlog >$3.1B	Bookings normalized; license variability persists
Financial services vertical	Regional banks up sequentially; big banks flat	Big banks stabilizing; low teens mix	Early improvement in big banks on billable-day adjusted basis	Improving signals
Tariffs/regulatory	—	—	Mexican delivery center services not subject to tariffs historically; watching new admin/DOGE initiatives	Monitor policy; limited direct tariff risk

Management Commentary

“In the fourth quarter, commercial consulting revenues grew by 6 percent year-over-year… Growth in IT consulting revenues contributed to an expansion in our margins, with gross and Adjusted EBITDA margins exceeding our expectations for the quarter.” — CEO Ted Hanson .
“ASGN is poised for a dynamic start to 2025… positioning our solutions capabilities in key areas like AI, cybersecurity, and data… strategic actions position us well for anticipated demand.” — CEO Ted Hanson .
“TopBloc… a leading, high-growth tech-enabled Workday consultant… will be nicely accretive to growth and margins… ERP systems own the data set… to deploy AI effectively across an organization.” — CEO Ted Hanson (Q&A) .
“Gross margin… 29%, up 60 bps YoY… adjusted EBITDA margin… exceeded our guidance expectations… outperformance of our commercial and a higher mix of commercial revenues.” — CFO Marie Perry .

Q&A Highlights

Federal license shortfall: Management quantified ~$20–$30M lower-than-expected license revenues driving the revenue miss; licenses carry little margin and procurement can shift direct-to-vendor .
TopBloc strategy: Adds ERP/Workday capability, accretive to growth/margins; ~500 consultants; ~9 months of revenue consolidation in 2025 post-close; leverage to ~2.4x then delever with FCF .
Commercial demand outlook: Early signs of improving activity; bookings acceleration; watching financial services as a bellwether; assignment business stability but no structural shift away from staffing .
Guidance composition: Q1 margin seasonality (~100 bps); limited software licenses assumed; Q1 conditions similar to Q4 .
Tariff exposure: Mexican delivery center services historically not subject to tariffs; monitoring policy and talent access considerations .

Estimates Context

Wall Street (S&P Global) consensus for Q4 2024 was unavailable due to request limit constraints; comparisons to consensus cannot be provided at this time. We benchmarked results against management guidance instead, showing beats on adjusted EBITDA, adjusted/GAAP EPS, and gross margin, and a slight revenue miss .

Key Takeaways for Investors

Mix shift toward consulting continues to support margin resilience; commercial consulting up 6% YoY with bookings strength offers visibility even as broader IT spend lags .
The revenue miss was primarily a low-margin federal license shortfall, not core services demand; margin beats are more indicative of underlying health than the modest revenue miss .
TopBloc expands ASGN’s ERP/Workday footprint, enhancing data/AI relevance and potentially cross-selling across commercial and federal; expected ~$150M FY25 revenue and high-teens EBITDA margin .
Federal pipeline normalized (TTM book-to-bill 1.1x; backlog >$3.1B), but license variability and agency-specific procurement choices remain a watch item near term .
Early signs of improvement in big banks and TMT bolster medium-term commercial trajectory; assignment stabilization suggests a base from which consulting can lead the upturn .
Near-term setup: Q1 2025 guidance embeds typical seasonality and cautious market assumptions; expect margin dip from payroll reset and no TopBloc contribution pre-close .
Capital allocation remains balanced: active buybacks, disciplined leverage around 2.4x post-TopBloc, and focus on deleveraging with FCF before resuming repurchase cadence .

ASGN Inc (ASGN)·Q4 2024 Earnings Summary