ASGN (ASGN) The 44th Annual William Blair Growth Stock Conference summary

Company overview and strategic direction

• Generates $4.5 billion in revenue and $500 million in EBITDA, serving both commercial and federal government sectors.

• Transitioned from IT staffing to a more consultative model, now with 60% of revenues from consulting services.

• Focuses on large enterprise accounts, serving 70% of the Fortune 1000 and over 300 of the Fortune 500.

• Expanded into federal government in 2018, providing high-end IT solutions including cybersecurity, AI, and cloud.

• Nearshore delivery capabilities in Mexico have grown tenfold since 2019, enhancing service flexibility.

Business model and financial structure

• Operates with a variable cost structure, leveraging a contingent workforce to align costs with revenues.

• SG&A costs are 80% compensation-related and highly variable, allowing for cost flexibility during revenue fluctuations.

• Targets 60%-65% EBITDA-to-free cash flow conversion, with over $400 million in trailing twelve-month free cash flow.

• Capital allocation prioritizes M&A, but current focus is on share repurchases due to market conditions.

• Maintains modest leverage (1.7x), with $1 billion in debt and a $500 million unused revolver.

Market opportunity and client strategy

• Addressable commercial IT consulting market exceeds $300 billion, with federal government IT at $180 billion.

• Two-thirds of existing clients have yet to adopt consulting services, representing significant growth potential.

• Industry-focused go-to-market strategy leverages deep sector expertise to expand within current accounts.

• Long-term margin targets are set to rise as consulting mix increases, with new targets to be announced soon.