ASGN (ASGN) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenues were $968.3 million, down 7.7% year-over-year, with declines in both Commercial and Federal segments, but gross margin improved to 28.4% from 28.2% year-over-year.

• Net income was $20.9 million ($0.48 per diluted share), down from $38.1 million ($0.81 per share) in Q1 2024, and adjusted EBITDA was $93.6 million (9.7% margin), down from $108.3 million (10.3%).

• IT consulting revenues grew to 61% of total revenues, up from 56.7% a year ago.

• The TopBloc acquisition for $340 million closed in March 2025, exceeding initial expectations for bookings, revenue, and adjusted EBITDA.

• Clients remain cautious on IT spending due to macro uncertainty, but demand for AI, data, and cybersecurity solutions is strong.

Financial highlights

• Commercial segment revenues were $672.2 million, down 8.1% year-over-year; Federal Government segment revenues were $296.1 million, down 6.7%.

• Gross profit was $275.4 million, with gross margin at 28.4%, up 20 bps year-over-year.

• Free cash flow was $6.6 million, down sharply from $62.5 million in Q1 2024, due to increased DSO and timing issues.

• Cash and equivalents at quarter-end were $107 million; working capital was $508.1 million.

• Stockholders’ equity increased slightly to $1,793.3 million.

Outlook and guidance

• Q2 2025 revenue guidance is $985 million–$1.015 billion, with net income expected between $29.3 million–$34.3 million and adjusted EBITDA $101 million–$108 million (margin 10.3%–10.6%).

• Adjusted EPS forecast for Q2 is $1.03–$1.14; gross margin projected at 29.0%–29.3%.

• Guidance assumes less than 2% DoD impact, no further market deterioration, and a widened revenue range due to macro uncertainty.

• Management expects cash, operating cash flows, and credit facility availability to be sufficient for obligations and capital needs for the next 12 months and beyond.