ASGN NYSE: EFOR, operating under the Everforth brand, reported third-quarter 2026 revenue and adjusted EBITDA above the high end of its guidance range, citing demand for artificial intelligence, cloud modernization, cybersecurity and enterprise platform services.
Revenue totaled $1.03 billion in the quarter, while adjusted EBITDA was $106.3 million and adjusted EBITDA margin was 10.3%. Net income was $23.1 million. Chief Executive Officer Ted Hanson said commercial and federal operations both contributed to the revenue outperformance.
Commercial revenue rose 1.2% year over year to $719.9 million, while federal government revenue increased 3.8% to $311.5 million. Commercial consulting recorded a trailing 12-month book-to-bill ratio of 1.1x, while federal bookings totaled $584.4 million during the quarter, representing a quarterly book-to-bill ratio of 1.9x.
Federal contract backlog was approximately $2.9 billion at quarter-end, or 2.5 times trailing 12-month revenue, Hanson said. The backlog included work involving AI and data, cybersecurity, cloud services and mission modernization.
AI and cybersecurity demand
Hanson said customers are increasingly moving beyond AI experimentation and toward broader deployment, creating demand for data integration, governance, security, operating-process changes and implementation support. He said the company’s partnerships with Workday, Salesforce, ServiceNow and other technology providers position Everforth to deploy AI-enabled capabilities in enterprise environments.
The company said its security and risk bookings were up more than 40% year to date compared with the first nine months of 2025, while its security and risk pipeline increased by the mid-teens since the end of the third quarter.
President Shiv Iyer said Everforth is working across the AI technology stack, including data-center infrastructure, applications and robotics. The company recently secured a multiyear data-center contract with a hyperscaler and assembled an engineering team within weeks, he said. Its work with hyperscalers also includes helping install, commission and bring robotic systems into production across North America and Europe.
In government markets, Iyer said national security drove federal growth, supported by cybersecurity contracts with the Department of Homeland Security and the Cybersecurity and Infrastructure Security Agency. The company also cited technology infrastructure work for the Department of Veterans Affairs and managed cybersecurity services for the Centers for Medicare and Medicaid Services.
Commercial performance and customer activity
Sequential commercial growth was led by the technology, media and telecommunications and business-services verticals, which each increased by high single digits from the second quarter. TMT benefited from double-digit growth in software and interactive work involving frontier AI labs and hyperscalers, while business services expanded through aerospace, defense and professional-services engagements.
Year over year, TMT revenue grew in the mid-teens and business-services revenue increased by high single digits. The company also reported high-teens growth among utilities customers, high-single-digit growth in insurance accounts and low-double-digit growth in diversified financial services.
Everforth highlighted several customer engagements, including a three-year Workday Gold-tier support contract with a domestic airline and a Salesforce professional-services co-delivery project for a global food and snacking company. It is also consolidating four operating segments into one ERP environment for a U.S. food producer.
Management said average commercial consulting deal size has increased over the past three quarters. Iyer said bookings were strong across Workday, core consulting, AI data-center build-out, cybersecurity, application modernization and application engineering. He added that technology partners are influencing an increasing share of bookings, reaching the high-40% to 50% range among the company’s top consulting partners.
Margins, debt reduction and outlook
Third-quarter gross margin was 28.3%, including a 31.9% commercial gross margin and a 19.8% federal gross margin. Selling, general and administrative expense was $217.7 million, including $8.3 million in acquisition, integration and strategic-planning costs.
Chief Financial Officer Marie Perry said the company repaid $52.8 million of debt during the quarter, including $43.8 million toward term loans and its revolver, plus $9 million in open-market repurchases of senior unsecured notes. Cash and equivalents totaled $147.5 million, and net leverage was 3.1 times at quarter-end. The company continues to target net leverage of 2.5 times or below.
Free cash flow was $46.5 million, or about 44% of adjusted EBITDA. The company continues to target full-year free-cash-flow conversion of 60% to 65% of adjusted EBITDA, excluding one-time strategic costs.
For the fourth quarter, Everforth projected revenue of $965 million to $995 million, net income of $19.7 million to $25.5 million, adjusted EBITDA of $93 million to $103 million, and adjusted EBITDA margin of 9.6% to 10.4%. The outlook assumes 61 billable days, three fewer than in the third quarter, and includes $6 million to $7.5 million in strategic-planning expenses.
Management reiterated a three-year objective to reach adjusted EBITDA margin of 12.5% or higher by the end of 2028, supported by growth, gross-margin expansion and planned structural cost savings. Hanson said the company expects $80 million in transformative cost savings under its strategic plan.
About ASGN (NYSE:EFOR)
ASGN Incorporated is a provider of information technology and professional services to commercial and government organizations. The company helps clients address digital transformation, cloud modernization, cybersecurity, data and analytics, application development, and other technology needs.
ASGN delivers these services through consulting, project-based solutions, and professional staffing. Its government segment provides technology, engineering, and mission-support services to U.S. federal agencies, while its commercial segment serves businesses across industries including healthcare, financial services, communications, and manufacturing.
The company traces its origins to 1985, when it was established as On Assignment, and expanded its government-services capabilities through the acquisition of ECS Federal in 2018.
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