NYSE:ASGN ASGN Q1 2024 Earnings Report $52.81 +0.71 (+1.36%) Closing price 03:59 PM EasternExtended Trading$52.66 -0.14 (-0.27%) As of 05:02 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast ASGN EPS ResultsActual EPS$1.16Consensus EPS $1.16Beat/MissMet ExpectationsOne Year Ago EPS$1.38ASGN Revenue ResultsActual Revenue$1.05 billionExpected Revenue$1.04 billionBeat/MissBeat by +$5.68 millionYoY Revenue Growth-7.10%ASGN Announcement DetailsQuarterQ1 2024Date4/24/2024TimeAfter Market ClosesConference Call DateWednesday, April 24, 2024Conference Call Time4:30PM ETUpcoming EarningsASGN's Q2 2025 earnings is scheduled for Wednesday, July 23, 2025, with a conference call scheduled at 4:30 PM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by ASGN Q1 2024 Earnings Call TranscriptProvided by QuartrApril 24, 2024 ShareLink copied to clipboard.There are 12 speakers on the call. Operator00:00:00Greetings. Welcome to the ASGN Incorporated First Quarter 2024 Earnings Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. I will now turn the conference over to your host, Kimberly Esterkin, Vice President of Investor Relations. Operator00:00:21You may begin. Speaker 100:00:24Good afternoon. Thank you for joining us today for ASGN's Q1 2024 conference call. With me are Ted Hanson, Chief Executive Officer Rand Blaser, President and Marie Perry, Chief Financial Officer. Before we get started, I would like to remind everyone that our commentary contains forward looking statements. Although we believe these statements are reasonable, they are subject to risks and uncertainties, and as such, our actual results could differ materially from those statements. Speaker 100:00:55Certain of these risks and uncertainties are described in today's press release and in our SEC filings. We do not assume any obligation to update statements made on this call. For your convenience, our prepared remarks and supplemental materials can be found in the Investor Relations section of our website at investors. Asgn.com. Please also note that on this call, we will be referencing certain non GAAP measures, such as adjusted EBITDA, adjusted net income and free cash flow. Speaker 100:01:28These non GAAP measures are intended to supplement the comparable GAAP measures. Reconciliations between GAAP and non GAAP measures are included in today's press release. I will now turn the call over to Ted Hanson, Chief Executive Officer. Speaker 200:01:43Thank you, Kim, and thank you for joining ASGN's Q1 2024 earnings call. ASGN achieved solid results for the Q1. Revenues of $1,050,000,000 and adjusted EBITDA of 108 point $3,000,000 were both near the top end of our guidance ranges. When we spoke last quarter, we expected our Commercial segment would see revenue trends in Q1 comparable to that of Q4, while our federal government segment would continue to achieve year over year top line growth. As evident from our segment results, which I'll review in detail shortly, market conditions were as we predicted. Speaker 200:02:28Our commercial clients continue to be cautious and acutely focused on where and when they will spend. Importantly, despite IT budgets being slow to be executed, our clients continue to leverage our high end consulting capabilities so our commercial consulting revenues increased both year over year and sequentially. On the government side of our business, revenues improved year over year and visibility began to build towards the end of the quarter with the passage of the appropriations bill in late March. While a release in federal spin will not happen automatically, the approval of the budget is a step in the right direction. Speaking of moving in the right direction, we continue to proactively shape and evolve our operations to position our business for continued growth. Speaker 200:03:19Our industry diverse large account portfolio not only serves us well in good times, but also in more difficult macro condition. Our federal government services provide countercyclical support to balance out our 5 diverse commercial industry verticals. We are also focusing on the right type of services that have higher value, higher margin IT consulting where projects and visibility are longer and client relationships are stickier, providing our business with enhanced stability across market cycles. A highlight of our quarterly results, IT consulting revenues comprised approximately 57% of Q1 twenty twenty four revenues as compared to roughly 50% in the prior year period. In addition, adjusted EBITDA benefits from higher commercial consulting margin. Speaker 200:04:13ASGN has made great strides in growing our IT consulting business and with a vast addressable market, there are many more opportunities for further growth. This growth will be driven in part by continuing to develop and foster the right customer relationships with the Fortune 1,000 and government clients. Our long standing trusted client relationships are what drove our progression into IT consulting and these clients will continue to pull us up the IT services pyramid. Importantly, as we await increased spending, we are making the right investments in our people, training and upscaling our teams in the latest technological developments, including key areas such as cybersecurity, data analytics, cloud and AI, all with our customers' needs in mind. Technology is shifting at a rapid pace and it is essential that we stay ahead of this change to remain competitive. Speaker 200:05:11We are also executing on the right strategic decisions when it comes to our capital allocation. While Marie will discuss our recent Term Loan B refinancing shortly, I am pleased to announce that just this week our Board of Directors approved a new 2 year $750,000,000 share repurchase authorization. This authorization is the largest in ASGN's history, reflecting our commitment to deliver value to our stockholders by using our solid free cash flow to buy back shares, while at the same time ensuring that we remain ready to execute on the right strategic acquisitions. With that as a background, let's turn to our segment performance, beginning with our largest segment by revenue Commercial. Our Commercial segment services large mid market accounts and Fortune 1,000 companies. Speaker 200:06:04Commercial segment revenues for the quarter declined by low double digits year over year. Revenues for this segment benefited from the growth in our consulting business, offset by continued softness in the more cyclical areas of our assignment business. Commercial consulting revenues increased 2% for the quarter compared to the year ago period and we were also up 3.2% sequentially. Commercial consulting bookings of approximately $323,200,000 translated to a book to bill of 1.2 times on a trailing 12 months basis. Bookings were again weighted towards renewals in the Q1. Speaker 200:06:46That said, even as IT budgets continue to be prioritized and managed, our customers are actively spending in the areas of cybersecurity, cloud and data analytics. Investments in cloud and data infrastructure are often considered a precursor to investments in the AI space and we are actively working with our clients to solidify their AI foundations. Turning to our vertical performance, all five commercial industry verticals declined year over year. That said, we saw year over year growth in 3 sub verticals including utilities, healthcare providers and telecom accounts. On a sequential basis, 2 verticals, TMT's Business and Government Services appear to be stabilizing on a same billable day adjusted basis. Speaker 200:07:37We also saw sequential growth in several sub verticals on a same billable day adjusted basis, including regional banks, telecom, media, healthcare payers, energy, consumer staples and aerospace and defense scale. While it's encouraging to see these sequential improvements, we have not yet seen an inflection point in IT spending. Nevertheless, our commercial consulting bookings remained solid and during the Q1 our teams won work across multiple service areas. Cybersecurity continues to be an area of growth for our commercial segment. And as discussed last quarter, collaboration with our federal government segment on cybersecurity services has only added to this strength. Speaker 200:08:22During the quarter, we won a contract delivering technical remediation and advisory services to a Fortune 500 insurance client. Our comprehensive governance, risk and compliance solution helped our client mature their security operations and become an improved governance and oversight focused organization. Beyond cybersecurity, our product and application services are resonating with clients that are looking for opportunities to scale and become more efficient. One way we've delivered efficiency to clients is via our world class near shore delivery center in Mexico. In the Q1, a global leader Our Mexico delivery center stepped in to offer a team of experts from developers to testers that have extensive experience working together in a much more convenient time zone for our clients. Speaker 200:09:23Our nearshore consultants are not only impressing our client base, but they are also enjoying the projects they're performing and their work environment. In fact, I'm very pleased to report that earlier this month, our commercial segment brand Apex Systems was recognized as one of the best places to work for women in Mexico for the 2nd year in a row. Providing an inclusive multicultural environment is core to ASCN's belief systems and corporate policies. And this award is a testament to our continued commitment to career development for all. Along the lines of career development, our growing data and AI practice is being supported by internal investments in talent, technology partnerships, intellectual property and training. Speaker 200:10:11We are proactively training our workforce in the U. S. And Mexico in the latest Gen AI technology. For 1 of the world's largest telecommunications providers, for example, our AI skill sets enabled us to win a 12 month consulting engagement supporting a Gen AI application development program. We are providing our client with scalable access to talent, technical leadership and large language model training. Speaker 200:10:40In another instance for an oil and gas company that ranks amongst the top 10 of the Fortune 500, we are leading an implementation of the Databricks Unity Catalog, a cloud based platform that offers a unified governance layer for enterprise data and AI. Our client has over 100 Databricks workspaces or deployments in the cloud and our project team is tasked with helping our client develop a governance structure related around the audit stability, security posture and cost allocation of these workspaces. Our team of consultants is currently collaborating with Databricks and our clients' internal IT team to build automation to onboard these Databricks workspaces with ease and repeatability. Our pipeline of data and AI work continues to grow and we look forward to supporting our clients as they focus on data preparation, developing use cases and ultimately implementing their own AI platforms. Now let's turn to our federal government segment, which provides mission critical solutions to the Department of Defense, the intelligence community and federal civilian agencies. Speaker 200:11:54Federal segment revenues for the Q1 were up solidly year over year. Contract backlog was $2,900,000,000 at the end of the Q1 or a coverage ratio of 2.2 times the segment's trailing 12 month revenues. New contract awards were approximately $197,300,000 translating to a book to bill of 0.9 times on a trailing 12 month basis. With the recent passage of the federal budget, awards previously deferred by the continuing resolution are beginning to work their way through the procurement system. We have been in pursuit of new awards throughout the budgeting process and now hope that with the recent appropriations bill, our proposals submitted and awaiting award will begin to convert at a higher velocity. Speaker 200:12:45The recently passed federal budget allocates funds to several key service areas in which our government teams have an established leadership presence, one of which is the area of cybersecurity. In the Q1, our federal government segment won $120,000,000 5 year recompete cybersecurity contract with the Department of Health and Human Services. Under this contract, our team will provide comprehensive advanced managed cybersecurity services, threat intelligence analytics and data forensics to the Centers for Medicare and Medicaid Services and their healthcare marketplace. The newly approved federal budget also allocates increased funds toward responsible AI applications. In addition to our growing AI presence on the commercial side of our business, our federal government segment remains recognized as one of the U. Speaker 200:13:39S. Government's leading AI contractors in both mission and enterprise IT. During the Q1, our National Security and Intelligence business received additional funding to support the DoD in developing, deploying and integrating its next gen AI capabilities. We also won a new contract to support AI enabled open source intelligence solutions for which our team will provide extensive training and program support. We continue to win contracts focused on digital transformation and emerging technology services. Speaker 200:14:16Leveraging more than 2 decades of experience as a leading Microsoft solutions partner in Azure, During the Q1, we expanded our contract dealing with the IRS to provide digital transformation services, IT operations, application management and engineering services. We also broadened our work with the Army's program executive office for simulation training and instrumentation. For this particular Army office, we provide full project lifecycle services ranging from project management, modeling and simulation to emerging technology integration and logistics support. With that, I will turn the call over to Marie to discuss the Q1 results and our Q2 2024 guidance. Speaker 300:15:05Thanks Ted. It's great to speak with everyone this afternoon. 1st quarter revenues of $1,050,000,000 were near the top end of our guidance range and reflects growth in our commercial consulting and federal government business. Revenues from the commercial segment were $731,500,000 down 12.1% compared to the prior year. Revenues from commercial consulting, the largest of our high margin revenue streams totaled $277,000,000 up 2% year over year and up 3.2% sequentially. Speaker 300:15:43Revenues from our federal government segment were 300 and $17,500,000 up 7% year over year. Turning to margins. Gross margin for the Q1 of 2024 was 28.2%, down 70 basis points from the Q1 of last year due to a higher mix of revenues from our federal government segment, which have a lower gross margin than commercial segment revenues. Gross margin for the commercial segment was 32%, up 50 basis points year over year due to growth in our commercial consulting revenues. Gross margin for the federal government segment was 19.7%, down 190 basis points year over year, primarily due to contract mix as well as a higher volume of firm fixed price projects that were ramping up in the prior year creating a difficult comp. Speaker 300:16:42SG and A expense for the quarter was $210,200,000 or 20 percent of revenues compared to $224,100,000 or 19.9 percent of revenues in the prior year. SG and A expense also included $1,200,000 in acquisition, integration and strategic planning expenses that were not included in our guidance estimates. As expected, interest expense increased year over year related to rising interest rates and our refinancing this past August. Going forward, however, we will see a reduction in our interest expense. In mid March, we successfully refinanced our Term Loan B. Speaker 300:17:24This refinancing closed on March 13 and was the 1st high yield repricing of the year to price at SOFR plus 175 basis points, a 50 basis point reduction from our prior rate spread. As a result of this repricing for the full year 2024, we anticipate cash interest savings of $1,100,000 net of transaction fees, followed by cash interest savings of approximately $2,500,000 per year thereafter. For the quarter, net income was $38,100,000 Adjusted EBITDA was $108,300,000 and adjusted EBITDA margin was 10.3%. Our adjusted EBITDA margin reflects the payroll tax reset, which occurs at the beginning of every calendar year and has an approximate 100 basis point downward impact as we move from the 4th to the 1st quarter. At quarter end, cash and cash equivalents were $158,400,000 and we had full availability under our $500,000,000 senior secured revolver and our net leverage ratio was 1.77 times. Speaker 300:18:38Turning to our cash flow statement. Free cash flow for the quarter was $62,500,000 We deployed $79,700,000 in cash to repurchase approximately 800,000 shares at an average price of $96.63 per share. Also as Ted noted earlier, this week our Board of Directors approved a new 2 year $750,000,000 share repurchase plan, replacing and upsizing the prior $500,000,000 optimization. We believe this increase in the size of our share repurchase program indicates our confidence and our continued ability to generate free cash flow. With solid free cash flow generation and full availability under our revolver, We have ample dry powder to make strategic acquisitions when the M and A market improves. Speaker 300:19:28In the meantime, we expect to continue to repurchase ASGN shares given their attractive valuation. Turning to guidance. Our financial estimates for the Q2 of 2024 are set in our earnings release and supplemental materials. These estimates are based on current market conditions. Our estimates assume 63 point 5 billable days in the 2nd quarter, which is 0.25 billable days more than the year ago period and 0 point 7 5 billable days more than Q1 of 2024. Speaker 300:20:03We expect market conditions and demand for IT services in the Q2 to be similar to that of the first. In the commercial segment, we anticipate revenues will remain steady to Q1, while the federal government segment revenues will be relatively consistent year over year. With this background, we are estimating revenues at $1,035,000,000 to $1,055,000,000 for the 2nd quarter. We are estimating net income of 44 $700,000 to $48,300,000 and adjusted EBITDA of $114,000,000 to $119,000,000 and adjusted EBITDA margin of 11% to 11.3%. Thank you. Speaker 300:20:48I'll now turn the call back to Ted for some closing remarks. Speaker 200:20:52Thanks, Marie. As is clear from today's discussion, our clients remain cautious with their IT spend as they look for more certainty in their business performance against a challenging macro backdrop. Nevertheless, we continue to proactively shape our operating model to be resilient in the current market as well as be ready for when IT spend accelerates. To ensure our service offerings and capabilities match the evolving needs of our clients in our industries, it's essential that we maintain a solid foundation of client support. With that in mind, I'm grateful to our entire team for your hard work and commitment over the past quarter. Speaker 200:21:36Your efforts are deeply appreciated. I'm honored to be part of such a talented and client focused team. Sourcing exceptional IT talent on a just in time basis is one of the many ways in which ASGN differentiates itself in place. Our differentiated recruiting model that relies on contingent labor onshore and nearshore provides a scalable, flexible solution that sets ASGN apart from traditional consulting companies that rely on a permanent bench. Leveraging a contingent labor force enables us to tailor our offering and provide our clients across 6 diverse industry verticals with the exact skill sets, pricing and industry based talent they need, whether for a short term data review project or a longer term platform integration. Speaker 200:22:31A pivotal aspect of our model is that our contingent labor force flexes with revenue, acting as a stabilizer for gross margin if and when revenue soften. This along with our variable SG and A cost structure allows us to deliver solid margins and cash flow. As is evident from our go to market strategy I just described, ASGN has the right building blocks in place. That said, as Marie discussed, we do not anticipate the seasonal uptick we have historically seen in our revenues in the Q2 due in large part to the lack of ramp in IT spend and budget releases that we typically see during the Q1. Nevertheless, our IT consulting pipeline is growing, bookings remain solid and the projects we are winning are longer in duration and more consultative. Speaker 200:23:27We have weathered many economic cycles throughout our company's history And I'm confident that when IT spend begins to accelerate, our teams will be at the forefront to lead our clients to their next phases of technological innovation, productivity and growth. Thank you again for joining our Q1 2024 call. Operator, please open the call to questions. Operator00:23:53Thank you. At this time, we will be conducting a question and answer session. And our first question comes from the line of Trevor Romeo with William Blair. Please proceed with your question. Speaker 400:24:32Hi, good afternoon. Thanks so much for taking the questions. First one, I was kind of just wondering if you could maybe speak to demand trends throughout the quarter. I guess it seems like last quarter the message was maybe a good degree of stability. I think as you said, you typically see a revenue uptick in Q2. Speaker 400:24:49That doesn't sound like that's likely at this point. So I was just kind of wondering if you could comment on how demand and client conversations have evolved the past few months and how that informs your outlook going forward? Speaker 200:25:02Yes, Trevor, thanks for the question. In commercial, I would say it just remains steady. We kind of hear from the Q3 into the 4th and now the 4th into the first adjusted for billing days and seasonality have just really seen what I'll say just a steady trend. No real change in client tone or conversations. And here in the 1st 3 weeks of the Q2 more the same. Speaker 200:25:33So it's a little out of the norm, if you will. There is typically some seasonality here where when you move out of the first and into the second, your volumes are ramping up, but we don't see that right now. We just see a steadiness. On the federal side, we had a really solid growth quarter in the Q1. I think that we're hopefully here now going to see our procurement officials begin to take an action on some of these things that we have as submitted waiting awards. Speaker 200:26:06And so while bookings were a little muted in the Q1, we're hoping the pace of that will pick up here in the second and into the third. Speaker 400:26:18Okay. Thank you, Ted. That's helpful. And then just one on AI demand. Was just wondering for some of the foundational cloud and data work you've been starting for clients, kind of trying to prep for AI, Have those projects evolved or changed in any way as they've moved along? Speaker 400:26:35I guess, have any of your clients moved closer toward the use case stage there? Just trying to get a sense of how that demand trend could continue to drive new business for ASGN through the next several quarters. Speaker 200:26:46Yes. Ray, do you want to take that one? Speaker 500:26:49Yes. I'll start. And Trevor, I like the way you worded the question because you have it exactly right. 1st of all, a lot of work going on in the cloud structures and the data side of the business that continues. Those are among our highest solutions in terms of consulting and even in staffing that we place. Speaker 500:27:10The use case side of it is in discussion mode, contemplation, if you will, but not yet, I think taking off. And I think that's just a question of them setting their governance policies, they're setting their data sets appropriately. They must they do have a mind of use cases and eventually because they're prepping the data in a way that would support that. So I think there's progress, but it's slow and I'd say slow and steady, but nothing robust. We definitely, I think, had more AI engagements in the Q1. Speaker 500:27:47There was one of those engagements featured in Ted's script that he read to you a short while ago and one of our telecommunications clients. So that was a nice thing to see, but it's not of the scale that it would certainly outreach any of the work we're doing in cloud, data or cybersecurity, those areas. Speaker 400:28:09Okay. Thank you very much. Operator00:28:13Thank you. Our next question comes from the line of Surinder Thind with Jefferies. Please proceed with your question. Speaker 600:28:21Thank you. For the first question, can you maybe provide some color around the commercial consulting revenue growth that was quarter over quarter? Were there a few large projects that kind of that you started in the quarter because it looks like in the subsequent quarter that things are going to be relatively stable. So just trying to understand the trends within the commercial consulting segments? Speaker 200:28:47Well, look, Surinder, if you go back, I think you're seeing consistent bookings right in that unit. And while we're booking at 1.2, which would lead you to some growth rate, we're also seeing elongation of those projects. So there's a slower burn of those bookings. We also mentioned that it's more heavily weighted to renewals than it is to new work. And so I think clients continue on with mission critical things that they were working on. Speaker 200:29:20And so that's why we see extensions of this work. But I think back to the original part of your question, was there any one big thing or 2 big things that got started here that were difference maker? Speaker 600:29:35Got it. And then I guess maybe some additional color on the sub segments within the commercial the contingent labor part of the business, maybe specifically like the assignment business versus Creative Circle and perm placement? Speaker 200:29:52And specifically, how are they doing beyond the assignment revenue Speaker 600:30:05if there's things that maybe have started to maybe stabilize relative to last quarter, just any additional color that you can provide that it can help us understand where we are in the cycle? Speaker 200:30:16Yes. I would say that they're stabilizing quarter to quarter here. I don't think that's totally new, but I think it continues. The if you look at the foreign metrics for the business, they're not telling you there's some inflection here for a slope up, but performance week to week, month to month and throughout the Q1 and into the first piece of the second just tells you that that assignment part of the business is steady as well. Speaker 700:30:47Thank you. Operator00:30:50Thank you. Our next question comes from the line of Jeff Silber with BMO Capital Markets. Please proceed with your question. Speaker 700:30:58Hey, thanks a lot. Just Ryan on for Jeff. I was curious as we move throughout the year, aside from just the automatic stabilizers, what levers do you have to pull in of the margin defense? And how does that really relate with the negative mix element of the federal government strength in coming quarters? Speaker 200:31:19Well, good question. I think on the last piece of that, you're going to continue as long as we're growing in federal and not growing in commercial, you're going to see the effect of business mix play out. If you think about levers to the first part of your question that we have to pull, look, I mean, our business model is mostly a variable cost model. So more than 80% of our SG and A is in compensation, incentives, commissions, bonuses, those type of things. So not only are we not dealing with a big bench on the gross margin side and as revenues move, the cost of goods there, cost of sales is moving and resetting itself. Speaker 200:32:13We're also seeing lower incentives and natural attrition And those will continue to be the levers that play out here if we see something different. For now, things are kind of stable. So I would say we're letting attrition work. We're backfilling it in certain areas where we see demand. Other areas that don't have demand, we may not be replacing those resources and it just continues to be a week to week thing that we monitor. Speaker 700:32:48Got it. Thank you. And just a follow-up. It seems like some of the larger IT service providers have started to be a leg down and a little bit more weakness over the last couple of months. It seems like your consulting business is relatively stable. Speaker 700:33:05Is there anything you would like to call out on kind of that divergence there between the 2? Speaker 200:33:11Well, look on the as it relates to our offering versus theirs, we are I think you've heard me say many times before, a real productive way for clients to continue to get really critical projects and initiatives done and to keep their spend at a lower rate than maybe some of the big traditional consulting firms. So I think you're seeing that play out here. Now I will tell you, I think, all the there's a lead lag here, while the assignment business was the first and the fastest to fall during the quarters in 2023 until it counts on stability in the latter part of 'twenty three, you've seen consulting trail that, not just for us, but for the peer group as well. And I think that's natural. We would have told we would say we did say to expect that. Speaker 200:34:13So I'd go back and just say, we have a very capable, high end solution for the client in these areas that are most critical and important to them. We come at a very productive price point in order to get these things done. And so they're pulling our lever, if you will, in order to stay with it. And I think that's what you can see playing out in the numbers. Speaker 500:34:40Ted, is it worth mentioning also, Ryan, that we're not over weighted in any one industry. So sometimes other consulting businesses are heavily weighted in 1 or 2 industries. We're pretty much spread across the 6 industries we talked to you about and I thought that helps us as well. There are certain industries that still aren't up in spending in the IT area. And while we're affected by that as well as some of the others, they may be more weighted in those industries. Speaker 700:35:13Understood. Thank you very much. Operator00:35:17Thank you. Our next question comes from the line of Kevin McVeigh with UBS. Please proceed with your question. Speaker 800:35:24Great. Thanks so much and congratulations on the buyback. I wonder, could you give us a sense in oats over 2 years, any sense of the sequencing on the buyback? And if I heard the comments earlier, it sounds like maybe the M and A market isn't as appealing as you thought. Any thoughts around that? Speaker 800:35:43I guess just again, sequencing of the buyback. And then is it I think it replaced $750,000,000 So can you help us or rather replaced $500,000,000 So what was the net step up? So I guess what was it in the $750,000,000 it is today? So I guess there's Speaker 900:35:58a couple of questions in that. Speaker 300:36:16Sorry about that. I'll start over. Speaker 700:36:20My apologies. Speaker 400:36:22Not at all. Speaker 300:36:23So, I mean to your point, the original authorization was $500,000,000 and we are replacing that with the $750,000,000 $750,000,000 it's for a 2 year period. But what was your question really, Mark? Speaker 200:36:39We burned it down with about 177,000,000 dollars And so the $750,000,000 replaces that. Yes. It's about $577,000,000 Speaker 300:36:49Yes. And our intention is always to have at least a year, if not more of authorization on the books. And so typically, you would see us at this time increase it. To your point, we actually did increase it higher than what we typically would do. Speaker 800:37:05Terrific. That's helpful. And then just in terms of the lack of normal seasonal uptick, is that did you expect that going into the year or is that something new? And is that the macro or is that a function of just anything that kind of drove that? Speaker 200:37:24And you're saying the uptick, Kevin, in what? Speaker 800:37:29So you said, Ted, if I heard you right, normally you'd see some seasonal uptick in the Q2 and that hasn't surfaced yet. Is that the macro or is there anything else driving that right now? Speaker 200:37:40No, I think it's a macro, Kevin. I mean, look, you know this, when you come across the holidays, you kind of reset as naturally as projects end and things get restarted. You start out in the 1st couple of weeks of January at a lower level of volumes and maybe you finished that before the holidays in December. And you spent January kind of recouping that volume through the end of the quarter. And by the time you get to the Q2, you're kind of moving on to surpass where you were and grow higher. Speaker 200:38:12I think what you're seeing here is just the steadiness and not that normal seasonal trend because the client is not back to any acceleration in IT spending. I mean, my take in Rand's is that they have budgets to spend, but they're holding them very tight and close. They're trying to gain confidence in their own business performance and where interest rates are headed and what does that mean for their business and the outlook here as we go. So this is all a macro issue. Certainly, the underpinnings for spending more on IT are there. Speaker 200:38:52Everybody's at the start line ready to go. And I think we're just a little bit of a waiting game here as we watch those things in the macro play out. Speaker 900:39:00That's very helpful. Speaker 800:39:01And then just one more if I could. Any sense of can you dimensionalize how much of the work's been Gen AI related, whether it's through bookings or what percentage Speaker 900:39:09of the revenue? I know it's Speaker 800:39:15Very Speaker 200:39:17Very little. I think we're you see conversation activity. We see some bookings of small projects to get started in conversations or look at data or think about where does it need to be in the cloud, those kind of things. But the while there's some a lot of conversation going on around that stuff, Kevin, there's no real material spend going. We have bookings around that. Speaker 200:39:43It's growing very fast, but it's a very small number. And I think that the real push on that is yet to come, which is a good thing. I mean, I think this is not a false promise. This is just everybody getting kind of teed up and ready to go. Speaker 800:40:02Super helpful. Thank you. Operator00:40:07Thank you. Next question comes from the line of Heather Baughski with Bank of America. Please proceed with your question. Speaker 1000:40:14Hi, thank you very much. I'm just curious, especially on the back of the question about buybacks. As you kind of think of use of cash near term and also for the midterm, how are you thinking about your M and A strategy, especially given that some of the challenges in the environment that are still out there? What does your pipeline look like? And where would you want to kind of fill in your portfolio? Speaker 200:40:43Yes. Well, look, Heather, I mean, we still believe M and A is the highest to best return on capital when we deploy it the way we do. Strategic tuck ins that bring capabilities into our business that are very important to our clients that we can pull across this account portfolio is really the name of the game. There are certain areas where we can organically build capability and we're doing that. There are other places where we're better off making an acquisition. Speaker 200:41:15Our acquisition of Glidefast in the ServiceNow area to become a premier North American partner is a great example of that. And I think when we go through that exercise, we have a lot of confidence by the time we get to the decision point because we have really good insights into what our clients are thinking about, what's in their pipeline in terms of work to get done. And so we can, if you will, work backwards from that. And we measure and know that we have certain opportunities that we could immediately begin to sell. So that is the premise. Speaker 200:41:51That remains the premise. And it will remain important as we go forward. I think we're in a moment here where especially in the commercial market, we're just not seeing many of any real quality assets come to market and it's for all kinds of reasons. There's a pause here in IT spending to a large degree. I think these companies are able to hang on here for a little while longer. Speaker 200:42:24They're not willing to reset their expectations down in terms of valuation, with maybe where market valuations are. It's not just one thing. It's a combination of all those things, if you will. So in the meantime, as Marie mentioned, resetting our share repurchase authorization. And we sized it like we normally do. Speaker 200:42:46We looked out 2 years. It's about 2 years' worth of free cash flow. And right now, our head is to while there's not any meaningful M and A opportunities to continue to dedicate quarterly free cash flow to repurchases because this is a very attractive valuation point. And so Speaker 900:43:08more Speaker 200:43:08of the same, if you will, from where we've been in the last few quarters. Speaker 1000:43:13Thank you. That's really helpful. Thanks very much. Operator00:43:18Thank you. Our next question comes from the line of Tobey Sommer with Chua Securities. Please proceed with your question. Speaker 900:43:26Thanks. If you look at forecasting the business, for example, your guidance or so forth, is it easier or harder than it was 3 or 6 months ago? And maybe could you comment across the business segments in that regard? Speaker 200:43:46Well, look, Tobey, I guess I wouldn't say it's any more difficult. I'm kind of looking around the room here than it was 3 or 6 months ago. If you go back years ago, several years ago, when we didn't have as large a footprint in consulting, I would say it was a little more difficult to forecast because on the IT staffing side of the business that kind of comes in shorter increments, volumes could kind of quickly move up and down on you. But in consulting, when you win a booking in commercial and you're going to work it over the next 12 to 18 months, you have really good certainty in that. And in federal, you have really good certainty when you win things that you're going to be working at for the next 5 years. Speaker 200:44:35So I think over the long haul, forecasting in the business has improved. We've gotten better visibility and transparency. We have more confidence in the bookings that are in our backlog. And so that's played itself out. I would say in the last 2 or 3 quarters, hasn't been too much change. Speaker 200:44:54I mean, we've gotten a little more in one area than we expected or a little less in commercial. And federal has played out about like we thought. And really the only variable there, sometimes we get a few million more in maybe licenses that are part of our solution that we expected 1 quarter and it came in another. But that's just incremental stuff around the edges, if you will. Speaker 900:45:23Makes sense. Thanks. With respect to the commercial IT consultant, what is the mix of full time versus flexible labor stand today? And how does that compare to 1 or 2 reference points from the past maybe and let us know where you sit today because one of the strategies of the company is to lean more heavily on Flexible and I'd like to know where you are. Speaker 200:45:52Yes. So we've pretty consistently seen and said that of the projects that we're working within our commercial consulting about 80% to 85% of it is contingent IT labor from our IT staffing capabilities. And about 15 to 20 at any one time is subject matter expertise with industry experience that we have in house plus our near shore delivery center in Guadalajara, Mexico. Speaker 900:46:30And I wanted to follow-up on the capital allocation question and share repurchase. Is this downturn this lethargic IT spending environment doesn't last too much longer, meaning more than 4 or 5 quarters more. How do you go through the analysis of kind of husbanding a little cash to have more dry powder to make acquisitions of consequence when the market is more fertile? And I guess your announced share repurchase is not a commitment to repurchase that stock and you could kind of slow it down if the environment improves and you see those opportunities. Can you speak to that a little? Speaker 200:47:16Yes. I think that last part is the key, Tobey. I mean, we've got when we see the pipeline still with M and tackle what we're doing on a share repurchase standpoint. And also if you've noticed, we've although we desire to spend a quarter of free cash flow except in the last quarter, we've had a hard time kind of getting there, if you will, just because we're purchasing in a very programmatic way. So we've been building some cash on the balance sheet. Speaker 200:47:48The last piece here is we've got plenty of room for leverage in order to bulk up and do a, what I'll say, a much more sizable acquisition. We've got great support from our banking partners. And I think if you look at our net leverage, which is now about 177, we have many times in the past levered up to about 3.8 times total debt to EBITDA in order to get an acquisition done. And so that leaves you with about 2 turns beyond where we are now. And that's really without even counting their EBITDA that they might contribute. Speaker 200:48:32So I think we've got the firepower here to do anything that we feel we need to do. And we would like to do acquisitions that still fit the same pattern that we've been doing in terms of capabilities that we can pull across our current account portfolio. But if it were a little bit larger scale, that would be a good thing. Speaker 900:48:56Thank you very much, Tim. Operator00:49:00Thank you. Our next question comes from the line of Marc Marcon with Baird. Please proceed with your question. Speaker 1100:49:08Hey, good afternoon and thanks for taking my questions. So Pat and Rand, I'm kind of curious when you talk to your clients and we're hearing the same consistent message across the space about the budgets are there, but they're still waiting. It probably varies by client and by specific elements. But are you getting a sense for exactly what they're waiting for? Is it something that's specific to their company? Speaker 1100:49:45And just feeling like a level of confidence that they're going to make their budget forecasts? Is it something from a macro perspective in terms of interest rates? Is there a concern that, hey, we haven't had a recession yet, but we've got an inverted yield curve, so perhaps that could occur. I'm just wondering what the trigger would be that would lead to some improvement with regards to the confidence to spend? Speaker 200:50:15Randy, do you want to try that one? And I'll jump in. Speaker 500:50:18Yes, Mark, let me start. First of all, very senior clients, we typically avoid the conversation because they're not going to say anything anyway. But when you get down in the trenches to the technical managers who are assigned responsibility for these projects, we do hear a lot of our clients saying we're going to open up and they'll lay out a date, in the Q3 or at the end of the year or this is important, we're going to move on this, but we're going to chunk it up a little bit and kind of go slow, which we've said in the past. So at the technical manager, the execution level, there is a sense of in that population of that there is a day coming when they're going to have more latitude. But it's there's no reason given for why that is. Speaker 500:51:10I mean, look, we know what we have booked. We know what the projects that are in play or how they're playing out, if you will, even if they're stretching out or slowing down. We do know, what their IT initiatives are that they want to get done, that they have stacked up in their budget once money gets released. And this is federal or commercial, okay. What we don't know is that the federal procurement officials are very slow at getting money out. Speaker 500:51:41Not sure why. Is that something coming from high reposition money for aid to save or reposition money for aid to foreign countries, don't know. On the commercial side, you can go through the same thing. What that buyer behavior, that trigger, don't know what comes down, but we do get a sense that they're coming, okay. It's coming. Speaker 500:52:13So Ted, anything you want to add to that? Speaker 200:52:16Yes. I would just as one of those people who's watching this and moderating our own IT spend, Mark, I would say all three matter, right? I mean, I think as we have ambition to invest harder in our own IT, We're certainly going at the most critical things, but we're worried about where the economy may be going for all the reasons that you just said. We're worried about our own bottom line and that we do a good job of finding a balance here in terms of continuing to invest versus performing at a level we would expect to on the bottom line. And so I think all three of the things that you said matter. Speaker 1100:53:02Okay. I appreciate the color. And then one thing that was really interesting was the discussion around the Databricks project that you had for a large oil and gas company. Can you talk a little bit about like what sort of premium pricing you're able to get? How attractive are those? Speaker 1100:53:23We're obviously hearing a lot about those sorts of things just starting up. I'm wondering how big that could that sort of practice could end up becoming? Speaker 200:53:32Yes. Do you want to talk about our data practice, Ran? Speaker 500:53:36What would you say? Yes. Mark, I think look, if you look at our things we've talked about over the past year, we've made a hefty play with ServiceNow with Databricks, Databricks Technology, Snowflake, certainly the cloud providers, both Microsoft and Amazon and Google. So it's and Salesforce. So we're watching those technologies. Speaker 500:54:02They seem to be the hottest technologies. We want to be in position to support them in certain industries where money is flowing or maybe it's by necessity like healthcare. We reported that our healthcare business is doing fine quarter after quarter after quarter. Well, some of that is they need the technology. These are technologies that play in their world and part of it is because the baby boomers are aging, right, and putting a greater demand on our healthcare system. Speaker 500:54:31So I mean, you can see certain things unfolding. It's interesting that we see telecommunications and we know what they're going through between the cable fight and streaming services and how they're positioning for greater volume. There's work there. There's work in which the streaming services to be in a position to pick up at huge volumes with certain pricing. And Ted and I have even commented that technology and telecommunications sort of let us into this problem over a year ago and now they seem to be Mark, I Mark, I guess I'm just trying to give you some sense of what we're watching same as everybody else. Speaker 500:55:24And these technologies we know are critically important to the whole data structure and to the mapping of data to potential use cases in AI, which is the game. That's the game right now. Speaker 1100:55:41Great. And then you did mention earlier in the discussion that consulting kind of follows some of the trends that you see on the assignment side. Obviously, assignment is still tough. You wouldn't expect consulting to I mean, given the momentum that you have there, the way that you're reconfiguring things, your relationships, you wouldn't anticipate that consulting would actually end up declining at some point this year, would you? Speaker 200:56:14Well, look, Mark, we're growing low single digits. Could that vary in a quarter to flat or slightly negative? I wouldn't promise that it couldn't, but our bookings trend does not tell us that it's going to really have significant year over year declines. And so I think you have to rely on that book and we do rely on that bookings number because that gives us really good visibility into that work that's going to be completed over the next 12 to 18 months. Could a client could something happen in the world where they really kind of don't just slow it down, but they really slow it down and then ramp it back up? Speaker 200:56:58Well, sure. But there's no indication of that right now. Speaker 1100:57:02Great. I just wanted to make sure nobody misinterpreted. Speaker 500:57:06Hey, Ted and Mark. Is it worth mentioning, Ted has said many times in the past year, year and a half. The first to go is term placement. The second to go are discretionary spend around things like creative, HR, that sort of thing. The next to go would be IT staffing. Speaker 500:57:23The last thing to go would be IT consulting. Well, if you think about what's going to happen as we start seeing the world come out of it, you're probably going to see the reverse of that. You'll start seeing IT consulting going up, then all the work in related staffing, then ultimately to the discretionary areas and to perm placement. I mean, if you believe that's the way it unfolds going down, it presumably reverses that when we're going back up. So that's another evidence besides bookings, Ted mentioned, that gives us confidence in the consulting side. Speaker 1100:57:59That's great. Thank you. Operator00:58:03Thank you. And we have reached the end of the question and answer session. I'll now turn the call back over to Ted Hanson for closing remarks. Speaker 200:58:10Great. Well, I want to thank everyone for being here this evening for our quarter 1 earnings release and conversation. We look forward to speaking with you soon about quarter 2. Have a great evening. Operator00:58:23And this concludes today's conference and you may disconnect your line at this time. Thank you for your participation.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallASGN Q1 202400:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Quarterly report(10-Q) ASGN Earnings HeadlinesASGN First Quarter 2025 Earnings: EPS Misses ExpectationsMay 3 at 8:27 PM | finance.yahoo.comEarnings Miss: ASGN Incorporated Missed EPS By 26% And Analysts Are Revising Their ForecastsApril 28, 2025 | uk.finance.yahoo.comGold Hits New Highs as Global Markets SpiralWhen Trump took office in 2017, gold was just $1,100 an ounce. By the time he left, it had soared to $1,839. Now… as new tariffs take effect, gold is breaking records again. You've hopefully already seen this in action… but gold is surpassing $3,000 per ounce for the first time EVER.May 6, 2025 | Premier Gold Co (Ad)ASGN's (ASGN) Hold Rating Reiterated at Canaccord Genuity GroupApril 28, 2025 | americanbankingnews.comCanaccord cuts ASGN stock rating to hold, slashes targetApril 26, 2025 | uk.investing.comASGN downgraded to Hold from Buy at CanaccordApril 26, 2025 | markets.businessinsider.comSee More ASGN Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like ASGN? Sign up for Earnings360's daily newsletter to receive timely earnings updates on ASGN and other key companies, straight to your email. Email Address About ASGNASGN (NYSE:ASGN) engages in the provision of information technology (IT) services and solutions in the technology, digital, and creative fields for commercial and government sectors in the United States, Canada, and Europe. It operates through two segments: Commercial and Federal Government. The Commercial Segment provides consulting, creative digital marketing, and permanent placement services primarily to enterprise clients. This segment also offers workforce mobilization, modern enterprise, and digital innovation IT consulting services; and cloud, data and analytics, and digital transformation solutions. The Federal Government Segment provides mission-critical solutions to the department of defense, intelligence communities, and federal civilian agencies. This segment offers cloud, cybersecurity, artificial intelligence, machine learning, application and IT modernization, and science and engineering solutions. The company was formerly known as On Assignment, Inc. and changed its name to ASGN Incorporated in April 2018. 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There are 12 speakers on the call. Operator00:00:00Greetings. Welcome to the ASGN Incorporated First Quarter 2024 Earnings Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. I will now turn the conference over to your host, Kimberly Esterkin, Vice President of Investor Relations. Operator00:00:21You may begin. Speaker 100:00:24Good afternoon. Thank you for joining us today for ASGN's Q1 2024 conference call. With me are Ted Hanson, Chief Executive Officer Rand Blaser, President and Marie Perry, Chief Financial Officer. Before we get started, I would like to remind everyone that our commentary contains forward looking statements. Although we believe these statements are reasonable, they are subject to risks and uncertainties, and as such, our actual results could differ materially from those statements. Speaker 100:00:55Certain of these risks and uncertainties are described in today's press release and in our SEC filings. We do not assume any obligation to update statements made on this call. For your convenience, our prepared remarks and supplemental materials can be found in the Investor Relations section of our website at investors. Asgn.com. Please also note that on this call, we will be referencing certain non GAAP measures, such as adjusted EBITDA, adjusted net income and free cash flow. Speaker 100:01:28These non GAAP measures are intended to supplement the comparable GAAP measures. Reconciliations between GAAP and non GAAP measures are included in today's press release. I will now turn the call over to Ted Hanson, Chief Executive Officer. Speaker 200:01:43Thank you, Kim, and thank you for joining ASGN's Q1 2024 earnings call. ASGN achieved solid results for the Q1. Revenues of $1,050,000,000 and adjusted EBITDA of 108 point $3,000,000 were both near the top end of our guidance ranges. When we spoke last quarter, we expected our Commercial segment would see revenue trends in Q1 comparable to that of Q4, while our federal government segment would continue to achieve year over year top line growth. As evident from our segment results, which I'll review in detail shortly, market conditions were as we predicted. Speaker 200:02:28Our commercial clients continue to be cautious and acutely focused on where and when they will spend. Importantly, despite IT budgets being slow to be executed, our clients continue to leverage our high end consulting capabilities so our commercial consulting revenues increased both year over year and sequentially. On the government side of our business, revenues improved year over year and visibility began to build towards the end of the quarter with the passage of the appropriations bill in late March. While a release in federal spin will not happen automatically, the approval of the budget is a step in the right direction. Speaking of moving in the right direction, we continue to proactively shape and evolve our operations to position our business for continued growth. Speaker 200:03:19Our industry diverse large account portfolio not only serves us well in good times, but also in more difficult macro condition. Our federal government services provide countercyclical support to balance out our 5 diverse commercial industry verticals. We are also focusing on the right type of services that have higher value, higher margin IT consulting where projects and visibility are longer and client relationships are stickier, providing our business with enhanced stability across market cycles. A highlight of our quarterly results, IT consulting revenues comprised approximately 57% of Q1 twenty twenty four revenues as compared to roughly 50% in the prior year period. In addition, adjusted EBITDA benefits from higher commercial consulting margin. Speaker 200:04:13ASGN has made great strides in growing our IT consulting business and with a vast addressable market, there are many more opportunities for further growth. This growth will be driven in part by continuing to develop and foster the right customer relationships with the Fortune 1,000 and government clients. Our long standing trusted client relationships are what drove our progression into IT consulting and these clients will continue to pull us up the IT services pyramid. Importantly, as we await increased spending, we are making the right investments in our people, training and upscaling our teams in the latest technological developments, including key areas such as cybersecurity, data analytics, cloud and AI, all with our customers' needs in mind. Technology is shifting at a rapid pace and it is essential that we stay ahead of this change to remain competitive. Speaker 200:05:11We are also executing on the right strategic decisions when it comes to our capital allocation. While Marie will discuss our recent Term Loan B refinancing shortly, I am pleased to announce that just this week our Board of Directors approved a new 2 year $750,000,000 share repurchase authorization. This authorization is the largest in ASGN's history, reflecting our commitment to deliver value to our stockholders by using our solid free cash flow to buy back shares, while at the same time ensuring that we remain ready to execute on the right strategic acquisitions. With that as a background, let's turn to our segment performance, beginning with our largest segment by revenue Commercial. Our Commercial segment services large mid market accounts and Fortune 1,000 companies. Speaker 200:06:04Commercial segment revenues for the quarter declined by low double digits year over year. Revenues for this segment benefited from the growth in our consulting business, offset by continued softness in the more cyclical areas of our assignment business. Commercial consulting revenues increased 2% for the quarter compared to the year ago period and we were also up 3.2% sequentially. Commercial consulting bookings of approximately $323,200,000 translated to a book to bill of 1.2 times on a trailing 12 months basis. Bookings were again weighted towards renewals in the Q1. Speaker 200:06:46That said, even as IT budgets continue to be prioritized and managed, our customers are actively spending in the areas of cybersecurity, cloud and data analytics. Investments in cloud and data infrastructure are often considered a precursor to investments in the AI space and we are actively working with our clients to solidify their AI foundations. Turning to our vertical performance, all five commercial industry verticals declined year over year. That said, we saw year over year growth in 3 sub verticals including utilities, healthcare providers and telecom accounts. On a sequential basis, 2 verticals, TMT's Business and Government Services appear to be stabilizing on a same billable day adjusted basis. Speaker 200:07:37We also saw sequential growth in several sub verticals on a same billable day adjusted basis, including regional banks, telecom, media, healthcare payers, energy, consumer staples and aerospace and defense scale. While it's encouraging to see these sequential improvements, we have not yet seen an inflection point in IT spending. Nevertheless, our commercial consulting bookings remained solid and during the Q1 our teams won work across multiple service areas. Cybersecurity continues to be an area of growth for our commercial segment. And as discussed last quarter, collaboration with our federal government segment on cybersecurity services has only added to this strength. Speaker 200:08:22During the quarter, we won a contract delivering technical remediation and advisory services to a Fortune 500 insurance client. Our comprehensive governance, risk and compliance solution helped our client mature their security operations and become an improved governance and oversight focused organization. Beyond cybersecurity, our product and application services are resonating with clients that are looking for opportunities to scale and become more efficient. One way we've delivered efficiency to clients is via our world class near shore delivery center in Mexico. In the Q1, a global leader Our Mexico delivery center stepped in to offer a team of experts from developers to testers that have extensive experience working together in a much more convenient time zone for our clients. Speaker 200:09:23Our nearshore consultants are not only impressing our client base, but they are also enjoying the projects they're performing and their work environment. In fact, I'm very pleased to report that earlier this month, our commercial segment brand Apex Systems was recognized as one of the best places to work for women in Mexico for the 2nd year in a row. Providing an inclusive multicultural environment is core to ASCN's belief systems and corporate policies. And this award is a testament to our continued commitment to career development for all. Along the lines of career development, our growing data and AI practice is being supported by internal investments in talent, technology partnerships, intellectual property and training. Speaker 200:10:11We are proactively training our workforce in the U. S. And Mexico in the latest Gen AI technology. For 1 of the world's largest telecommunications providers, for example, our AI skill sets enabled us to win a 12 month consulting engagement supporting a Gen AI application development program. We are providing our client with scalable access to talent, technical leadership and large language model training. Speaker 200:10:40In another instance for an oil and gas company that ranks amongst the top 10 of the Fortune 500, we are leading an implementation of the Databricks Unity Catalog, a cloud based platform that offers a unified governance layer for enterprise data and AI. Our client has over 100 Databricks workspaces or deployments in the cloud and our project team is tasked with helping our client develop a governance structure related around the audit stability, security posture and cost allocation of these workspaces. Our team of consultants is currently collaborating with Databricks and our clients' internal IT team to build automation to onboard these Databricks workspaces with ease and repeatability. Our pipeline of data and AI work continues to grow and we look forward to supporting our clients as they focus on data preparation, developing use cases and ultimately implementing their own AI platforms. Now let's turn to our federal government segment, which provides mission critical solutions to the Department of Defense, the intelligence community and federal civilian agencies. Speaker 200:11:54Federal segment revenues for the Q1 were up solidly year over year. Contract backlog was $2,900,000,000 at the end of the Q1 or a coverage ratio of 2.2 times the segment's trailing 12 month revenues. New contract awards were approximately $197,300,000 translating to a book to bill of 0.9 times on a trailing 12 month basis. With the recent passage of the federal budget, awards previously deferred by the continuing resolution are beginning to work their way through the procurement system. We have been in pursuit of new awards throughout the budgeting process and now hope that with the recent appropriations bill, our proposals submitted and awaiting award will begin to convert at a higher velocity. Speaker 200:12:45The recently passed federal budget allocates funds to several key service areas in which our government teams have an established leadership presence, one of which is the area of cybersecurity. In the Q1, our federal government segment won $120,000,000 5 year recompete cybersecurity contract with the Department of Health and Human Services. Under this contract, our team will provide comprehensive advanced managed cybersecurity services, threat intelligence analytics and data forensics to the Centers for Medicare and Medicaid Services and their healthcare marketplace. The newly approved federal budget also allocates increased funds toward responsible AI applications. In addition to our growing AI presence on the commercial side of our business, our federal government segment remains recognized as one of the U. Speaker 200:13:39S. Government's leading AI contractors in both mission and enterprise IT. During the Q1, our National Security and Intelligence business received additional funding to support the DoD in developing, deploying and integrating its next gen AI capabilities. We also won a new contract to support AI enabled open source intelligence solutions for which our team will provide extensive training and program support. We continue to win contracts focused on digital transformation and emerging technology services. Speaker 200:14:16Leveraging more than 2 decades of experience as a leading Microsoft solutions partner in Azure, During the Q1, we expanded our contract dealing with the IRS to provide digital transformation services, IT operations, application management and engineering services. We also broadened our work with the Army's program executive office for simulation training and instrumentation. For this particular Army office, we provide full project lifecycle services ranging from project management, modeling and simulation to emerging technology integration and logistics support. With that, I will turn the call over to Marie to discuss the Q1 results and our Q2 2024 guidance. Speaker 300:15:05Thanks Ted. It's great to speak with everyone this afternoon. 1st quarter revenues of $1,050,000,000 were near the top end of our guidance range and reflects growth in our commercial consulting and federal government business. Revenues from the commercial segment were $731,500,000 down 12.1% compared to the prior year. Revenues from commercial consulting, the largest of our high margin revenue streams totaled $277,000,000 up 2% year over year and up 3.2% sequentially. Speaker 300:15:43Revenues from our federal government segment were 300 and $17,500,000 up 7% year over year. Turning to margins. Gross margin for the Q1 of 2024 was 28.2%, down 70 basis points from the Q1 of last year due to a higher mix of revenues from our federal government segment, which have a lower gross margin than commercial segment revenues. Gross margin for the commercial segment was 32%, up 50 basis points year over year due to growth in our commercial consulting revenues. Gross margin for the federal government segment was 19.7%, down 190 basis points year over year, primarily due to contract mix as well as a higher volume of firm fixed price projects that were ramping up in the prior year creating a difficult comp. Speaker 300:16:42SG and A expense for the quarter was $210,200,000 or 20 percent of revenues compared to $224,100,000 or 19.9 percent of revenues in the prior year. SG and A expense also included $1,200,000 in acquisition, integration and strategic planning expenses that were not included in our guidance estimates. As expected, interest expense increased year over year related to rising interest rates and our refinancing this past August. Going forward, however, we will see a reduction in our interest expense. In mid March, we successfully refinanced our Term Loan B. Speaker 300:17:24This refinancing closed on March 13 and was the 1st high yield repricing of the year to price at SOFR plus 175 basis points, a 50 basis point reduction from our prior rate spread. As a result of this repricing for the full year 2024, we anticipate cash interest savings of $1,100,000 net of transaction fees, followed by cash interest savings of approximately $2,500,000 per year thereafter. For the quarter, net income was $38,100,000 Adjusted EBITDA was $108,300,000 and adjusted EBITDA margin was 10.3%. Our adjusted EBITDA margin reflects the payroll tax reset, which occurs at the beginning of every calendar year and has an approximate 100 basis point downward impact as we move from the 4th to the 1st quarter. At quarter end, cash and cash equivalents were $158,400,000 and we had full availability under our $500,000,000 senior secured revolver and our net leverage ratio was 1.77 times. Speaker 300:18:38Turning to our cash flow statement. Free cash flow for the quarter was $62,500,000 We deployed $79,700,000 in cash to repurchase approximately 800,000 shares at an average price of $96.63 per share. Also as Ted noted earlier, this week our Board of Directors approved a new 2 year $750,000,000 share repurchase plan, replacing and upsizing the prior $500,000,000 optimization. We believe this increase in the size of our share repurchase program indicates our confidence and our continued ability to generate free cash flow. With solid free cash flow generation and full availability under our revolver, We have ample dry powder to make strategic acquisitions when the M and A market improves. Speaker 300:19:28In the meantime, we expect to continue to repurchase ASGN shares given their attractive valuation. Turning to guidance. Our financial estimates for the Q2 of 2024 are set in our earnings release and supplemental materials. These estimates are based on current market conditions. Our estimates assume 63 point 5 billable days in the 2nd quarter, which is 0.25 billable days more than the year ago period and 0 point 7 5 billable days more than Q1 of 2024. Speaker 300:20:03We expect market conditions and demand for IT services in the Q2 to be similar to that of the first. In the commercial segment, we anticipate revenues will remain steady to Q1, while the federal government segment revenues will be relatively consistent year over year. With this background, we are estimating revenues at $1,035,000,000 to $1,055,000,000 for the 2nd quarter. We are estimating net income of 44 $700,000 to $48,300,000 and adjusted EBITDA of $114,000,000 to $119,000,000 and adjusted EBITDA margin of 11% to 11.3%. Thank you. Speaker 300:20:48I'll now turn the call back to Ted for some closing remarks. Speaker 200:20:52Thanks, Marie. As is clear from today's discussion, our clients remain cautious with their IT spend as they look for more certainty in their business performance against a challenging macro backdrop. Nevertheless, we continue to proactively shape our operating model to be resilient in the current market as well as be ready for when IT spend accelerates. To ensure our service offerings and capabilities match the evolving needs of our clients in our industries, it's essential that we maintain a solid foundation of client support. With that in mind, I'm grateful to our entire team for your hard work and commitment over the past quarter. Speaker 200:21:36Your efforts are deeply appreciated. I'm honored to be part of such a talented and client focused team. Sourcing exceptional IT talent on a just in time basis is one of the many ways in which ASGN differentiates itself in place. Our differentiated recruiting model that relies on contingent labor onshore and nearshore provides a scalable, flexible solution that sets ASGN apart from traditional consulting companies that rely on a permanent bench. Leveraging a contingent labor force enables us to tailor our offering and provide our clients across 6 diverse industry verticals with the exact skill sets, pricing and industry based talent they need, whether for a short term data review project or a longer term platform integration. Speaker 200:22:31A pivotal aspect of our model is that our contingent labor force flexes with revenue, acting as a stabilizer for gross margin if and when revenue soften. This along with our variable SG and A cost structure allows us to deliver solid margins and cash flow. As is evident from our go to market strategy I just described, ASGN has the right building blocks in place. That said, as Marie discussed, we do not anticipate the seasonal uptick we have historically seen in our revenues in the Q2 due in large part to the lack of ramp in IT spend and budget releases that we typically see during the Q1. Nevertheless, our IT consulting pipeline is growing, bookings remain solid and the projects we are winning are longer in duration and more consultative. Speaker 200:23:27We have weathered many economic cycles throughout our company's history And I'm confident that when IT spend begins to accelerate, our teams will be at the forefront to lead our clients to their next phases of technological innovation, productivity and growth. Thank you again for joining our Q1 2024 call. Operator, please open the call to questions. Operator00:23:53Thank you. At this time, we will be conducting a question and answer session. And our first question comes from the line of Trevor Romeo with William Blair. Please proceed with your question. Speaker 400:24:32Hi, good afternoon. Thanks so much for taking the questions. First one, I was kind of just wondering if you could maybe speak to demand trends throughout the quarter. I guess it seems like last quarter the message was maybe a good degree of stability. I think as you said, you typically see a revenue uptick in Q2. Speaker 400:24:49That doesn't sound like that's likely at this point. So I was just kind of wondering if you could comment on how demand and client conversations have evolved the past few months and how that informs your outlook going forward? Speaker 200:25:02Yes, Trevor, thanks for the question. In commercial, I would say it just remains steady. We kind of hear from the Q3 into the 4th and now the 4th into the first adjusted for billing days and seasonality have just really seen what I'll say just a steady trend. No real change in client tone or conversations. And here in the 1st 3 weeks of the Q2 more the same. Speaker 200:25:33So it's a little out of the norm, if you will. There is typically some seasonality here where when you move out of the first and into the second, your volumes are ramping up, but we don't see that right now. We just see a steadiness. On the federal side, we had a really solid growth quarter in the Q1. I think that we're hopefully here now going to see our procurement officials begin to take an action on some of these things that we have as submitted waiting awards. Speaker 200:26:06And so while bookings were a little muted in the Q1, we're hoping the pace of that will pick up here in the second and into the third. Speaker 400:26:18Okay. Thank you, Ted. That's helpful. And then just one on AI demand. Was just wondering for some of the foundational cloud and data work you've been starting for clients, kind of trying to prep for AI, Have those projects evolved or changed in any way as they've moved along? Speaker 400:26:35I guess, have any of your clients moved closer toward the use case stage there? Just trying to get a sense of how that demand trend could continue to drive new business for ASGN through the next several quarters. Speaker 200:26:46Yes. Ray, do you want to take that one? Speaker 500:26:49Yes. I'll start. And Trevor, I like the way you worded the question because you have it exactly right. 1st of all, a lot of work going on in the cloud structures and the data side of the business that continues. Those are among our highest solutions in terms of consulting and even in staffing that we place. Speaker 500:27:10The use case side of it is in discussion mode, contemplation, if you will, but not yet, I think taking off. And I think that's just a question of them setting their governance policies, they're setting their data sets appropriately. They must they do have a mind of use cases and eventually because they're prepping the data in a way that would support that. So I think there's progress, but it's slow and I'd say slow and steady, but nothing robust. We definitely, I think, had more AI engagements in the Q1. Speaker 500:27:47There was one of those engagements featured in Ted's script that he read to you a short while ago and one of our telecommunications clients. So that was a nice thing to see, but it's not of the scale that it would certainly outreach any of the work we're doing in cloud, data or cybersecurity, those areas. Speaker 400:28:09Okay. Thank you very much. Operator00:28:13Thank you. Our next question comes from the line of Surinder Thind with Jefferies. Please proceed with your question. Speaker 600:28:21Thank you. For the first question, can you maybe provide some color around the commercial consulting revenue growth that was quarter over quarter? Were there a few large projects that kind of that you started in the quarter because it looks like in the subsequent quarter that things are going to be relatively stable. So just trying to understand the trends within the commercial consulting segments? Speaker 200:28:47Well, look, Surinder, if you go back, I think you're seeing consistent bookings right in that unit. And while we're booking at 1.2, which would lead you to some growth rate, we're also seeing elongation of those projects. So there's a slower burn of those bookings. We also mentioned that it's more heavily weighted to renewals than it is to new work. And so I think clients continue on with mission critical things that they were working on. Speaker 200:29:20And so that's why we see extensions of this work. But I think back to the original part of your question, was there any one big thing or 2 big things that got started here that were difference maker? Speaker 600:29:35Got it. And then I guess maybe some additional color on the sub segments within the commercial the contingent labor part of the business, maybe specifically like the assignment business versus Creative Circle and perm placement? Speaker 200:29:52And specifically, how are they doing beyond the assignment revenue Speaker 600:30:05if there's things that maybe have started to maybe stabilize relative to last quarter, just any additional color that you can provide that it can help us understand where we are in the cycle? Speaker 200:30:16Yes. I would say that they're stabilizing quarter to quarter here. I don't think that's totally new, but I think it continues. The if you look at the foreign metrics for the business, they're not telling you there's some inflection here for a slope up, but performance week to week, month to month and throughout the Q1 and into the first piece of the second just tells you that that assignment part of the business is steady as well. Speaker 700:30:47Thank you. Operator00:30:50Thank you. Our next question comes from the line of Jeff Silber with BMO Capital Markets. Please proceed with your question. Speaker 700:30:58Hey, thanks a lot. Just Ryan on for Jeff. I was curious as we move throughout the year, aside from just the automatic stabilizers, what levers do you have to pull in of the margin defense? And how does that really relate with the negative mix element of the federal government strength in coming quarters? Speaker 200:31:19Well, good question. I think on the last piece of that, you're going to continue as long as we're growing in federal and not growing in commercial, you're going to see the effect of business mix play out. If you think about levers to the first part of your question that we have to pull, look, I mean, our business model is mostly a variable cost model. So more than 80% of our SG and A is in compensation, incentives, commissions, bonuses, those type of things. So not only are we not dealing with a big bench on the gross margin side and as revenues move, the cost of goods there, cost of sales is moving and resetting itself. Speaker 200:32:13We're also seeing lower incentives and natural attrition And those will continue to be the levers that play out here if we see something different. For now, things are kind of stable. So I would say we're letting attrition work. We're backfilling it in certain areas where we see demand. Other areas that don't have demand, we may not be replacing those resources and it just continues to be a week to week thing that we monitor. Speaker 700:32:48Got it. Thank you. And just a follow-up. It seems like some of the larger IT service providers have started to be a leg down and a little bit more weakness over the last couple of months. It seems like your consulting business is relatively stable. Speaker 700:33:05Is there anything you would like to call out on kind of that divergence there between the 2? Speaker 200:33:11Well, look on the as it relates to our offering versus theirs, we are I think you've heard me say many times before, a real productive way for clients to continue to get really critical projects and initiatives done and to keep their spend at a lower rate than maybe some of the big traditional consulting firms. So I think you're seeing that play out here. Now I will tell you, I think, all the there's a lead lag here, while the assignment business was the first and the fastest to fall during the quarters in 2023 until it counts on stability in the latter part of 'twenty three, you've seen consulting trail that, not just for us, but for the peer group as well. And I think that's natural. We would have told we would say we did say to expect that. Speaker 200:34:13So I'd go back and just say, we have a very capable, high end solution for the client in these areas that are most critical and important to them. We come at a very productive price point in order to get these things done. And so they're pulling our lever, if you will, in order to stay with it. And I think that's what you can see playing out in the numbers. Speaker 500:34:40Ted, is it worth mentioning also, Ryan, that we're not over weighted in any one industry. So sometimes other consulting businesses are heavily weighted in 1 or 2 industries. We're pretty much spread across the 6 industries we talked to you about and I thought that helps us as well. There are certain industries that still aren't up in spending in the IT area. And while we're affected by that as well as some of the others, they may be more weighted in those industries. Speaker 700:35:13Understood. Thank you very much. Operator00:35:17Thank you. Our next question comes from the line of Kevin McVeigh with UBS. Please proceed with your question. Speaker 800:35:24Great. Thanks so much and congratulations on the buyback. I wonder, could you give us a sense in oats over 2 years, any sense of the sequencing on the buyback? And if I heard the comments earlier, it sounds like maybe the M and A market isn't as appealing as you thought. Any thoughts around that? Speaker 800:35:43I guess just again, sequencing of the buyback. And then is it I think it replaced $750,000,000 So can you help us or rather replaced $500,000,000 So what was the net step up? So I guess what was it in the $750,000,000 it is today? So I guess there's Speaker 900:35:58a couple of questions in that. Speaker 300:36:16Sorry about that. I'll start over. Speaker 700:36:20My apologies. Speaker 400:36:22Not at all. Speaker 300:36:23So, I mean to your point, the original authorization was $500,000,000 and we are replacing that with the $750,000,000 $750,000,000 it's for a 2 year period. But what was your question really, Mark? Speaker 200:36:39We burned it down with about 177,000,000 dollars And so the $750,000,000 replaces that. Yes. It's about $577,000,000 Speaker 300:36:49Yes. And our intention is always to have at least a year, if not more of authorization on the books. And so typically, you would see us at this time increase it. To your point, we actually did increase it higher than what we typically would do. Speaker 800:37:05Terrific. That's helpful. And then just in terms of the lack of normal seasonal uptick, is that did you expect that going into the year or is that something new? And is that the macro or is that a function of just anything that kind of drove that? Speaker 200:37:24And you're saying the uptick, Kevin, in what? Speaker 800:37:29So you said, Ted, if I heard you right, normally you'd see some seasonal uptick in the Q2 and that hasn't surfaced yet. Is that the macro or is there anything else driving that right now? Speaker 200:37:40No, I think it's a macro, Kevin. I mean, look, you know this, when you come across the holidays, you kind of reset as naturally as projects end and things get restarted. You start out in the 1st couple of weeks of January at a lower level of volumes and maybe you finished that before the holidays in December. And you spent January kind of recouping that volume through the end of the quarter. And by the time you get to the Q2, you're kind of moving on to surpass where you were and grow higher. Speaker 200:38:12I think what you're seeing here is just the steadiness and not that normal seasonal trend because the client is not back to any acceleration in IT spending. I mean, my take in Rand's is that they have budgets to spend, but they're holding them very tight and close. They're trying to gain confidence in their own business performance and where interest rates are headed and what does that mean for their business and the outlook here as we go. So this is all a macro issue. Certainly, the underpinnings for spending more on IT are there. Speaker 200:38:52Everybody's at the start line ready to go. And I think we're just a little bit of a waiting game here as we watch those things in the macro play out. Speaker 900:39:00That's very helpful. Speaker 800:39:01And then just one more if I could. Any sense of can you dimensionalize how much of the work's been Gen AI related, whether it's through bookings or what percentage Speaker 900:39:09of the revenue? I know it's Speaker 800:39:15Very Speaker 200:39:17Very little. I think we're you see conversation activity. We see some bookings of small projects to get started in conversations or look at data or think about where does it need to be in the cloud, those kind of things. But the while there's some a lot of conversation going on around that stuff, Kevin, there's no real material spend going. We have bookings around that. Speaker 200:39:43It's growing very fast, but it's a very small number. And I think that the real push on that is yet to come, which is a good thing. I mean, I think this is not a false promise. This is just everybody getting kind of teed up and ready to go. Speaker 800:40:02Super helpful. Thank you. Operator00:40:07Thank you. Next question comes from the line of Heather Baughski with Bank of America. Please proceed with your question. Speaker 1000:40:14Hi, thank you very much. I'm just curious, especially on the back of the question about buybacks. As you kind of think of use of cash near term and also for the midterm, how are you thinking about your M and A strategy, especially given that some of the challenges in the environment that are still out there? What does your pipeline look like? And where would you want to kind of fill in your portfolio? Speaker 200:40:43Yes. Well, look, Heather, I mean, we still believe M and A is the highest to best return on capital when we deploy it the way we do. Strategic tuck ins that bring capabilities into our business that are very important to our clients that we can pull across this account portfolio is really the name of the game. There are certain areas where we can organically build capability and we're doing that. There are other places where we're better off making an acquisition. Speaker 200:41:15Our acquisition of Glidefast in the ServiceNow area to become a premier North American partner is a great example of that. And I think when we go through that exercise, we have a lot of confidence by the time we get to the decision point because we have really good insights into what our clients are thinking about, what's in their pipeline in terms of work to get done. And so we can, if you will, work backwards from that. And we measure and know that we have certain opportunities that we could immediately begin to sell. So that is the premise. Speaker 200:41:51That remains the premise. And it will remain important as we go forward. I think we're in a moment here where especially in the commercial market, we're just not seeing many of any real quality assets come to market and it's for all kinds of reasons. There's a pause here in IT spending to a large degree. I think these companies are able to hang on here for a little while longer. Speaker 200:42:24They're not willing to reset their expectations down in terms of valuation, with maybe where market valuations are. It's not just one thing. It's a combination of all those things, if you will. So in the meantime, as Marie mentioned, resetting our share repurchase authorization. And we sized it like we normally do. Speaker 200:42:46We looked out 2 years. It's about 2 years' worth of free cash flow. And right now, our head is to while there's not any meaningful M and A opportunities to continue to dedicate quarterly free cash flow to repurchases because this is a very attractive valuation point. And so Speaker 900:43:08more Speaker 200:43:08of the same, if you will, from where we've been in the last few quarters. Speaker 1000:43:13Thank you. That's really helpful. Thanks very much. Operator00:43:18Thank you. Our next question comes from the line of Tobey Sommer with Chua Securities. Please proceed with your question. Speaker 900:43:26Thanks. If you look at forecasting the business, for example, your guidance or so forth, is it easier or harder than it was 3 or 6 months ago? And maybe could you comment across the business segments in that regard? Speaker 200:43:46Well, look, Tobey, I guess I wouldn't say it's any more difficult. I'm kind of looking around the room here than it was 3 or 6 months ago. If you go back years ago, several years ago, when we didn't have as large a footprint in consulting, I would say it was a little more difficult to forecast because on the IT staffing side of the business that kind of comes in shorter increments, volumes could kind of quickly move up and down on you. But in consulting, when you win a booking in commercial and you're going to work it over the next 12 to 18 months, you have really good certainty in that. And in federal, you have really good certainty when you win things that you're going to be working at for the next 5 years. Speaker 200:44:35So I think over the long haul, forecasting in the business has improved. We've gotten better visibility and transparency. We have more confidence in the bookings that are in our backlog. And so that's played itself out. I would say in the last 2 or 3 quarters, hasn't been too much change. Speaker 200:44:54I mean, we've gotten a little more in one area than we expected or a little less in commercial. And federal has played out about like we thought. And really the only variable there, sometimes we get a few million more in maybe licenses that are part of our solution that we expected 1 quarter and it came in another. But that's just incremental stuff around the edges, if you will. Speaker 900:45:23Makes sense. Thanks. With respect to the commercial IT consultant, what is the mix of full time versus flexible labor stand today? And how does that compare to 1 or 2 reference points from the past maybe and let us know where you sit today because one of the strategies of the company is to lean more heavily on Flexible and I'd like to know where you are. Speaker 200:45:52Yes. So we've pretty consistently seen and said that of the projects that we're working within our commercial consulting about 80% to 85% of it is contingent IT labor from our IT staffing capabilities. And about 15 to 20 at any one time is subject matter expertise with industry experience that we have in house plus our near shore delivery center in Guadalajara, Mexico. Speaker 900:46:30And I wanted to follow-up on the capital allocation question and share repurchase. Is this downturn this lethargic IT spending environment doesn't last too much longer, meaning more than 4 or 5 quarters more. How do you go through the analysis of kind of husbanding a little cash to have more dry powder to make acquisitions of consequence when the market is more fertile? And I guess your announced share repurchase is not a commitment to repurchase that stock and you could kind of slow it down if the environment improves and you see those opportunities. Can you speak to that a little? Speaker 200:47:16Yes. I think that last part is the key, Tobey. I mean, we've got when we see the pipeline still with M and tackle what we're doing on a share repurchase standpoint. And also if you've noticed, we've although we desire to spend a quarter of free cash flow except in the last quarter, we've had a hard time kind of getting there, if you will, just because we're purchasing in a very programmatic way. So we've been building some cash on the balance sheet. Speaker 200:47:48The last piece here is we've got plenty of room for leverage in order to bulk up and do a, what I'll say, a much more sizable acquisition. We've got great support from our banking partners. And I think if you look at our net leverage, which is now about 177, we have many times in the past levered up to about 3.8 times total debt to EBITDA in order to get an acquisition done. And so that leaves you with about 2 turns beyond where we are now. And that's really without even counting their EBITDA that they might contribute. Speaker 200:48:32So I think we've got the firepower here to do anything that we feel we need to do. And we would like to do acquisitions that still fit the same pattern that we've been doing in terms of capabilities that we can pull across our current account portfolio. But if it were a little bit larger scale, that would be a good thing. Speaker 900:48:56Thank you very much, Tim. Operator00:49:00Thank you. Our next question comes from the line of Marc Marcon with Baird. Please proceed with your question. Speaker 1100:49:08Hey, good afternoon and thanks for taking my questions. So Pat and Rand, I'm kind of curious when you talk to your clients and we're hearing the same consistent message across the space about the budgets are there, but they're still waiting. It probably varies by client and by specific elements. But are you getting a sense for exactly what they're waiting for? Is it something that's specific to their company? Speaker 1100:49:45And just feeling like a level of confidence that they're going to make their budget forecasts? Is it something from a macro perspective in terms of interest rates? Is there a concern that, hey, we haven't had a recession yet, but we've got an inverted yield curve, so perhaps that could occur. I'm just wondering what the trigger would be that would lead to some improvement with regards to the confidence to spend? Speaker 200:50:15Randy, do you want to try that one? And I'll jump in. Speaker 500:50:18Yes, Mark, let me start. First of all, very senior clients, we typically avoid the conversation because they're not going to say anything anyway. But when you get down in the trenches to the technical managers who are assigned responsibility for these projects, we do hear a lot of our clients saying we're going to open up and they'll lay out a date, in the Q3 or at the end of the year or this is important, we're going to move on this, but we're going to chunk it up a little bit and kind of go slow, which we've said in the past. So at the technical manager, the execution level, there is a sense of in that population of that there is a day coming when they're going to have more latitude. But it's there's no reason given for why that is. Speaker 500:51:10I mean, look, we know what we have booked. We know what the projects that are in play or how they're playing out, if you will, even if they're stretching out or slowing down. We do know, what their IT initiatives are that they want to get done, that they have stacked up in their budget once money gets released. And this is federal or commercial, okay. What we don't know is that the federal procurement officials are very slow at getting money out. Speaker 500:51:41Not sure why. Is that something coming from high reposition money for aid to save or reposition money for aid to foreign countries, don't know. On the commercial side, you can go through the same thing. What that buyer behavior, that trigger, don't know what comes down, but we do get a sense that they're coming, okay. It's coming. Speaker 500:52:13So Ted, anything you want to add to that? Speaker 200:52:16Yes. I would just as one of those people who's watching this and moderating our own IT spend, Mark, I would say all three matter, right? I mean, I think as we have ambition to invest harder in our own IT, We're certainly going at the most critical things, but we're worried about where the economy may be going for all the reasons that you just said. We're worried about our own bottom line and that we do a good job of finding a balance here in terms of continuing to invest versus performing at a level we would expect to on the bottom line. And so I think all three of the things that you said matter. Speaker 1100:53:02Okay. I appreciate the color. And then one thing that was really interesting was the discussion around the Databricks project that you had for a large oil and gas company. Can you talk a little bit about like what sort of premium pricing you're able to get? How attractive are those? Speaker 1100:53:23We're obviously hearing a lot about those sorts of things just starting up. I'm wondering how big that could that sort of practice could end up becoming? Speaker 200:53:32Yes. Do you want to talk about our data practice, Ran? Speaker 500:53:36What would you say? Yes. Mark, I think look, if you look at our things we've talked about over the past year, we've made a hefty play with ServiceNow with Databricks, Databricks Technology, Snowflake, certainly the cloud providers, both Microsoft and Amazon and Google. So it's and Salesforce. So we're watching those technologies. Speaker 500:54:02They seem to be the hottest technologies. We want to be in position to support them in certain industries where money is flowing or maybe it's by necessity like healthcare. We reported that our healthcare business is doing fine quarter after quarter after quarter. Well, some of that is they need the technology. These are technologies that play in their world and part of it is because the baby boomers are aging, right, and putting a greater demand on our healthcare system. Speaker 500:54:31So I mean, you can see certain things unfolding. It's interesting that we see telecommunications and we know what they're going through between the cable fight and streaming services and how they're positioning for greater volume. There's work there. There's work in which the streaming services to be in a position to pick up at huge volumes with certain pricing. And Ted and I have even commented that technology and telecommunications sort of let us into this problem over a year ago and now they seem to be Mark, I Mark, I guess I'm just trying to give you some sense of what we're watching same as everybody else. Speaker 500:55:24And these technologies we know are critically important to the whole data structure and to the mapping of data to potential use cases in AI, which is the game. That's the game right now. Speaker 1100:55:41Great. And then you did mention earlier in the discussion that consulting kind of follows some of the trends that you see on the assignment side. Obviously, assignment is still tough. You wouldn't expect consulting to I mean, given the momentum that you have there, the way that you're reconfiguring things, your relationships, you wouldn't anticipate that consulting would actually end up declining at some point this year, would you? Speaker 200:56:14Well, look, Mark, we're growing low single digits. Could that vary in a quarter to flat or slightly negative? I wouldn't promise that it couldn't, but our bookings trend does not tell us that it's going to really have significant year over year declines. And so I think you have to rely on that book and we do rely on that bookings number because that gives us really good visibility into that work that's going to be completed over the next 12 to 18 months. Could a client could something happen in the world where they really kind of don't just slow it down, but they really slow it down and then ramp it back up? Speaker 200:56:58Well, sure. But there's no indication of that right now. Speaker 1100:57:02Great. I just wanted to make sure nobody misinterpreted. Speaker 500:57:06Hey, Ted and Mark. Is it worth mentioning, Ted has said many times in the past year, year and a half. The first to go is term placement. The second to go are discretionary spend around things like creative, HR, that sort of thing. The next to go would be IT staffing. Speaker 500:57:23The last thing to go would be IT consulting. Well, if you think about what's going to happen as we start seeing the world come out of it, you're probably going to see the reverse of that. You'll start seeing IT consulting going up, then all the work in related staffing, then ultimately to the discretionary areas and to perm placement. I mean, if you believe that's the way it unfolds going down, it presumably reverses that when we're going back up. So that's another evidence besides bookings, Ted mentioned, that gives us confidence in the consulting side. Speaker 1100:57:59That's great. Thank you. Operator00:58:03Thank you. And we have reached the end of the question and answer session. I'll now turn the call back over to Ted Hanson for closing remarks. Speaker 200:58:10Great. Well, I want to thank everyone for being here this evening for our quarter 1 earnings release and conversation. We look forward to speaking with you soon about quarter 2. Have a great evening. Operator00:58:23And this concludes today's conference and you may disconnect your line at this time. Thank you for your participation.Read morePowered by