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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| | | | | |
| ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2025
OR
| | | | | |
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission file number: 001-35636
ASGN Incorporated
(Exact name of registrant as specified in its charter)
| | | | | | | | | | | | | | | | | |
| Delaware | 95-4023433 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
| | | | | | | | | | | | | | | | | |
4400 Cox Road, Suite 110, Glen Allen, Virginia | 23060 |
(Address of Principal Executive Offices) | (Zip Code) |
(888) 482-8068
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | | | | | | | |
| Title of each class | | Trading Symbol | | Name of exchange on which registered |
| Common Stock | | ASGN | | NYSE |
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| | | | | | | | | | | | | | |
| Large accelerated filer | ☒ | | Accelerated filer | ☐ |
Non-accelerated filer | ☐ | | Smaller reporting company | ☐ |
| | | Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
☐ Yes ☒ No
At October 24, 2025, the total number of outstanding shares of the Common Stock of ASGN Incorporated (the "Company") ($0.01 par value) was 42.7 million.
ASGN INCORPORATED AND SUBSIDIARIES
INDEX
| | | | | |
PART I — FINANCIAL INFORMATION | |
| |
Item 1 — Condensed Consolidated Financial Statements (Unaudited) | 3 |
| |
Condensed Consolidated Balance Sheets | 3 |
| |
Condensed Consolidated Statements of Operations and Comprehensive Income | 4 |
| |
Condensed Consolidated Statements of Stockholders’ Equity | 5 |
| |
Condensed Consolidated Statements of Cash Flows | 6 |
| |
Notes to Condensed Consolidated Financial Statements | 7 |
| |
Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations | 13 |
| |
Item 3 — Quantitative and Qualitative Disclosures about Market Risks | 17 |
| |
Item 4 — Controls and Procedures | 17 |
| |
PART II — OTHER INFORMATION | |
| |
Item 1 — Legal Proceedings | 18 |
| |
Item 1A — Risk Factors | 18 |
| |
Item 2 — Unregistered Sales of Securities and Use of Proceeds | 18 |
| |
Item 3 — Defaults Upon Senior Securities | 18 |
| |
Item 4 — Mine Safety Disclosures | 18 |
| |
Item 5 — Other Information | 18 |
| |
Item 6 — Exhibits | 19 |
| |
Signatures | 20 |
| |
PART I — FINANCIAL INFORMATION
Item 1 — Condensed Consolidated Financial Statements (Unaudited)
ASGN INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(in millions, except share data)
| | | | | | | | | | | |
| September 30,
2025 | | December 31,
2024 |
| ASSETS | | | |
| Current assets: | | | |
| Cash and cash equivalents | $ | 126.5 | | | $ | 205.2 | |
| Accounts receivable, net | 710.4 | | | 650.8 | |
| | | |
| Other current assets | 81.5 | | | 61.7 | |
| Total current assets | 918.4 | | | 917.7 | |
| Property and equipment, net | 83.1 | | | 82.6 | |
| | | |
| Identifiable intangible assets, net | 470.6 | | | 439.8 | |
| Goodwill | 2,142.4 | | | 1,893.1 | |
| Other non-current assets | 85.8 | | | 95.8 | |
| Total assets | $ | 3,700.3 | | | $ | 3,429.0 | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | |
| Current liabilities: | | | |
| | | |
| Accrued payroll | $ | 249.4 | | | $ | 218.0 | |
| | | |
| | | |
| Other current liabilities | 212.9 | | | 149.1 | |
| Total current liabilities | 462.3 | | | 367.1 | |
| Long-term debt | 1,165.7 | | | 1,033.5 | |
| | | |
| Deferred income tax liabilities | 192.3 | | | 187.5 | |
| Other long-term liabilities | 46.9 | | | 64.2 | |
| Total liabilities | 1,867.2 | | | 1,652.3 | |
Commitments and contingencies (Note 7) | | | |
| Stockholders’ equity: | | | |
Preferred stock, $0.01 par value; 1.0 million shares authorized; no shares issued | — | | | — | |
Common stock, $0.01 par value; 75.0 million shares authorized; 43.1 million and 43.8 million shares outstanding at September 30, 2025 and December 31, 2024, respectively. | 0.4 | | | 0.4 | |
| Paid-in capital | 727.5 | | | 684.2 | |
| Retained earnings | 1,107.2 | | | 1,097.1 | |
| Accumulated other comprehensive loss | (2.0) | | | (5.0) | |
| Total stockholders’ equity | 1,833.1 | | | 1,776.7 | |
| Total liabilities and stockholders’ equity | $ | 3,700.3 | | | $ | 3,429.0 | |
See notes to condensed consolidated financial statements.
ASGN INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited)
(in millions, except per share data)
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended | | Nine Months Ended |
| September 30, | | September 30, |
| 2025 | | 2024 | | 2025 | | 2024 |
| Revenues | $ | 1,011.4 | | | $ | 1,031.0 | | | $ | 3,000.3 | | | $ | 3,114.7 | |
| Costs of services | 714.5 | | | 730.6 | | | 2,134.7 | | | 2,217.0 | |
| Gross profit | 296.9 | | | 300.4 | | | 865.6 | | | 897.7 | |
| Selling, general, and administrative expenses | 212.2 | | | 207.5 | | | 643.5 | | | 623.3 | |
| Amortization of intangible assets | 16.8 | | | 14.0 | | | 48.0 | | | 44.2 | |
| Operating income | 67.9 | | | 78.9 | | | 174.1 | | | 230.2 | |
| Interest expense, net | (17.4) | | | (16.0) | | | (51.0) | | | (49.4) | |
| Income before income taxes | 50.5 | | | 62.9 | | | 123.1 | | | 180.8 | |
| Provision for income taxes | 12.4 | | | 15.4 | | | 34.8 | | | 48.0 | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| Net income | $ | 38.1 | | | $ | 47.5 | | | $ | 88.3 | | | $ | 132.8 | |
| | | | | | | |
| Earnings per share: | | | | | | | |
| Basic | $ | 0.88 | | | $ | 1.07 | | | $ | 2.02 | | | $ | 2.93 | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| Diluted | $ | 0.87 | | | $ | 1.06 | | | $ | 2.01 | | | $ | 2.89 | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| Shares and share equivalents used to calculate earnings per share: | | | | | | | |
| Basic | 43.5 | | | 44.5 | | | 43.7 | | | 45.4 | |
| Diluted | 43.7 | | | 45.0 | | | 43.9 | | | 45.9 | |
| | | | | | | |
| Reconciliation of net income to comprehensive income: | | | | | | | |
| Net income | $ | 38.1 | | | $ | 47.5 | | | $ | 88.3 | | | $ | 132.8 | |
| Foreign currency translation adjustment | (0.4) | | | 0.2 | | | 3.0 | | | (2.1) | |
| Comprehensive income | $ | 37.7 | | | $ | 47.7 | | | $ | 91.3 | | | $ | 130.7 | |
See notes to condensed consolidated financial statements.
ASGN INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited)
(in millions)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Common Stock | | Paid-in Capital | | Retained Earnings | | Other | | Total |
| | Shares | | Par Value | | | | |
| Three Months Ended September 30, 2025 | | | | | | | | | | | | |
Balance at June 30, 2025 | | 43.8 | | | $ | 0.4 | | | $ | 727.1 | | | $ | 1,100.9 | | | $ | (1.6) | | | $ | 1,826.8 | |
| Stock-based compensation expense | | — | | | — | | | 11.1 | | | — | | | — | | | 11.1 | |
| Issuances under equity plans | | 0.3 | | | — | | | 5.5 | | | — | | | — | | | 5.5 | |
| Tax withholding on restricted stock vesting | | — | | | — | | | (0.8) | | | — | | | — | | | (0.8) | |
| Stock repurchase and retirement of shares | | (1.0) | | | — | | | (15.4) | | | (31.8) | | | — | | | (47.2) | |
| | | | | | | | | | | | |
| Other | | — | | | — | | | — | | | — | | | (0.4) | | | (0.4) | |
| Net income | | — | | | — | | | — | | | 38.1 | | | — | | | 38.1 | |
Balance at September 30, 2025 | | 43.1 | | | $ | 0.4 | | | $ | 727.5 | | | $ | 1,107.2 | | | $ | (2.0) | | | $ | 1,833.1 | |
| | | | | | | | | | | | |
| Three Months Ended September 30, 2024 | | | | | | | | | | | | |
Balance at June 30, 2024 | | 45.1 | | | $ | 0.5 | | | $ | 687.2 | | | $ | 1,122.5 | | | $ | (2.3) | | | $ | 1,807.9 | |
| Stock-based compensation expense | | — | | | — | | | 9.9 | | | — | | | — | | | 9.9 | |
| Issuances under equity plans | | 0.1 | | | — | | | 7.7 | | | — | | | — | | | 7.7 | |
| Tax withholding on restricted stock vesting | | — | | | — | | | (3.7) | | | — | | | — | | | (3.7) | |
| Stock repurchase and retirement of shares | | (1.0) | | | — | | | (16.5) | | | (78.6) | | | — | | | (95.1) | |
| Other | | — | | | — | | | — | | | — | | | 0.2 | | | 0.2 | |
| Net income | | — | | | — | | | — | | | 47.5 | | | — | | | 47.5 | |
Balance at September 30, 2024 | | 44.2 | | | $ | 0.5 | | | $ | 684.6 | | | $ | 1,091.4 | | | $ | (2.1) | | | $ | 1,774.4 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | |
| | Common Stock | | Paid-in Capital | | Retained Earnings | | Other | | Total |
| | Shares | | Par Value | | | | |
| Nine Months Ended September 30, 2025 | | | | | | | | | | | | |
Balance at December 31, 2024 | | 43.8 | | | $ | 0.4 | | | $ | 684.2 | | | $ | 1,097.1 | | | $ | (5.0) | | | $ | 1,776.7 | |
| Stock-based compensation expense | | — | | | — | | | 36.8 | | | — | | | — | | | 36.8 | |
| Issuances under equity plans | | 0.5 | | | — | | | 14.2 | | | — | | | — | | | 14.2 | |
| Tax withholding on restricted stock vesting | | — | | | — | | | (7.8) | | | — | | | — | | | (7.8) | |
| Stock repurchase and retirement of shares | | (1.7) | | | — | | | (28.6) | | | (78.2) | | | — | | | (106.8) | |
| Acquisition (Note 4) | | 0.5 | | | — | | | 28.7 | | | — | | | — | | | 28.7 | |
| Other | | — | | | — | | | — | | | — | | | 3.0 | | | 3.0 | |
| Net income | | — | | | — | | | — | | | 88.3 | | | — | | | 88.3 | |
Balance at September 30, 2025 | | 43.1 | | | $ | 0.4 | | | $ | 727.5 | | | $ | 1,107.2 | | | $ | (2.0) | | | $ | 1,833.1 | |
| | | | | | | | | | | | |
| Nine Months Ended September 30, 2024 | | | | | | | | | | | | |
Balance at December 31, 2023 | | 46.7 | | | $ | 0.5 | | | $ | 696.0 | | | $ | 1,195.6 | | | $ | — | | | $ | 1,892.1 | |
| Stock-based compensation expense | | — | | | — | | | 32.6 | | | — | | | — | | | 32.6 | |
| Issuances under equity plans | | 0.5 | | | — | | | 17.2 | | | — | | | — | | | 17.2 | |
| Tax withholding on restricted stock vesting | | — | | | — | | | (13.7) | | | — | | | — | | | (13.7) | |
| Stock repurchase and retirement of shares | | (3.0) | | | — | | | (47.5) | | | (237.0) | | | — | | | (284.5) | |
| Other | | — | | | — | | | — | | | — | | | (2.1) | | | (2.1) | |
| Net income | | — | | | — | | | — | | | 132.8 | | | — | | | 132.8 | |
Balance at September 30, 2024 | | 44.2 | | | $ | 0.5 | | | $ | 684.6 | | | $ | 1,091.4 | | | $ | (2.1) | | | $ | 1,774.4 | |
See notes to condensed consolidated financial statements.
ASGN INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(in millions)
| | | | | | | | | | | |
| Nine Months Ended |
| September 30, |
| 2025 | | 2024 |
| Cash Flows from Operating Activities | | | |
| Net income | $ | 88.3 | | | $ | 132.8 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | |
| | | |
| Amortization and depreciation | 83.6 | | | 72.4 | |
| Stock-based compensation | 36.8 | | | 32.6 | |
| | | |
| Other | 9.2 | | | 7.2 | |
| Changes in operating assets and liabilities: | | | |
| Accounts receivable | (38.5) | | | 52.6 | |
| Prepaid expenses and income taxes | (0.8) | | | 0.6 | |
| Accounts payable | 11.6 | | | (7.2) | |
| Accrued payroll | 27.2 | | | 0.9 | |
| Income taxes payable | 27.2 | | | 17.2 | |
| Other | (19.0) | | | (9.3) | |
| Net cash provided by operating activities | 225.6 | | | 299.8 | |
| Cash Flows from Investing Activities | | | |
| Cash paid for property and equipment | (31.2) | | | (24.0) | |
| Cash paid for acquisitions, net of cash acquired | (306.1) | | | — | |
| | | |
| Net cash used in investing activities | (337.3) | | | (24.0) | |
| Cash Flows from Financing Activities | | | |
| Proceeds from long-term debt | 365.0 | | | — | |
| Principal payments of long-term debt | (230.4) | | | (3.8) | |
| | | |
| Proceeds from employee stock purchase plan | 14.2 | | | 17.2 | |
| Repurchase of common stock | (105.9) | | | (283.3) | |
| Payment of employment taxes related to release of restricted stock awards | (7.8) | | | (13.7) | |
| Other | (3.3) | | | — | |
| | | |
| | | |
| Net cash provided by (used in) financing activities | 31.8 | | | (283.6) | |
| Effect of exchange rate changes on cash and cash equivalents | 1.2 | | | (1.5) | |
| Net Decrease in Cash and Cash Equivalents | (78.7) | | | (9.3) | |
| | | |
| Cash and Cash Equivalents at Beginning of Year | 205.2 | | | 175.9 | |
| Cash and Cash Equivalents at End of Period | $ | 126.5 | | | $ | 166.6 | |
| | | |
| | | | | | | | | | | |
| Supplemental Disclosure of Cash Flow Information | | | |
Cash paid for — | | | |
| Income taxes | $ | 6.6 | | | $ | 22.8 | |
| Interest | $ | 44.3 | | | $ | 41.4 | |
| Operating leases | $ | 18.5 | | | $ | 17.6 | |
Noncash transactions — | | | |
| | | |
| | | |
| | | |
| Operating lease right of use assets obtained in exchange for operating lease liabilities | $ | 14.7 | | | $ | 13.6 | |
| | | |
| | | |
See notes to condensed consolidated financial statements.
ASGN INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. General
Basis of Presentation — The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and the rules of the Securities and Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations. The December 31, 2024 balance sheet was derived from audited financial statements. The financial statements include adjustments consisting of normal recurring items, which, in the opinion of management, are necessary for a fair presentation of the financial position of ASGN Incorporated and its subsidiaries ("ASGN" or the "Company") and its results of operations for the interim dates and periods set forth herein. The results for any of the interim periods are not necessarily indicative of the results to be expected for the full year or any other period. This Quarterly Report on Form 10-Q should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 ("2024 10-K").
2. Accounting Standards Update ("ASU")
In July 2025, the Financial Accounting Standards Board ("FASB") issued ASU No. 2025-05, Financial Instruments Credit Losses (Topic 326), which aims to simplify the measurement of credit losses for current accounts receivable and current contract assets arising from transactions under Topic 606, Revenue from Contracts with Customers. This amendment introduces a practical expedient allowing entities to assume that current conditions as of the balance sheet date remain unchanged for the asset's remaining life when estimating expected credit losses. This update is effective for annual periods beginning after December 15, 2025, with early adoption permitted. The Company is in the process of evaluating the adoption of the standard update.
In September 2025, the FASB issued ASU No. 2025-06, Internal-Use Software (Subtopic 350-40), to modernize accounting for software costs by removing outdated guidance and better reflect current development practices. The amendment removes all references to prescriptive and sequential software development stages (e.g., preliminary, application development, post-implementation) and allows for capitalization of software costs once management approves funding and completion is likely. This update is effective for annual periods beginning after December 15, 2027, with early adoption permitted. The Company is in the process of evaluating the impact the standard will have on its consolidated financial statements.
3. Balance Sheet Details
The table below presents selected balance sheet account balances (in millions):
| | | | | | | | | | | | | | |
| | September 30,
2025 | | December 31,
2024 |
| Other current assets: | | | | |
| Prepaid expenses and income taxes | | $ | 46.8 | | | $ | 44.6 | |
| Other | | 34.7 | | | 17.1 | |
| | $ | 81.5 | | | $ | 61.7 | |
| | | | |
| Other non-current assets: | | | | |
| Operating lease right-of-use assets | | $ | 61.9 | | | $ | 61.9 | |
| Other | | 23.9 | | | 33.9 | |
| | $ | 85.8 | | | $ | 95.8 | |
| | | | |
| Other current liabilities: | | | | |
| Accounts payable | | $ | 38.2 | | | $ | 27.2 | |
| Operating lease liabilities | | 20.7 | | | 19.5 |
| Contract liabilities | | 30.0 | | | 17.6 |
| Income taxes payable | | 29.3 | | | 1.6 |
| Other | | 94.7 | | | 83.2 |
| | $ | 212.9 | | | $ | 149.1 | |
| | | | |
| Other long-term liabilities: | | | | |
| Operating lease liabilities | | $ | 45.1 | | | $ | 46.9 | |
| Other | | 1.8 | | | 17.3 | |
| | $ | 46.9 | | | $ | 64.2 | |
| | | | |
| | | | |
During the second quarter of 2025, the Company terminated its deferred compensation plan (“DCP”). The final distribution of all participant account assets will occur in June 2026. As of September 30, 2025, the plan assets and liabilities were $18.8 million and were included in other current assets and other current liabilities on the condensed consolidated balance sheet. As of December 31, 2024, the plan assets and liabilities were $17.8 million, of which $1.7 million was included in other current assets and other current liabilities, and the remaining $16.1 million was included in other non-current assets and other long-term liabilities on the condensed consolidated balance sheet.
4. Acquisition
On March 4, 2025, the Company acquired TopBloc, LLC (“TopBloc”), a leading, tech-enabled Workday consultancy, for $340.0 million, consisting of 90 percent cash and 10 percent equity. TopBloc is part of the Commercial Segment and its results of operations are included in the consolidated results of the Company from the date of its acquisition. The purchase accounting for this acquisition remains incomplete with respect to the provisional fair value of assets acquired and liabilities assumed, as management continues to gather and evaluate information about circumstances that existed as of the acquisition date. Measurement period adjustments will be recognized prospectively within 12 months from the date of acquisition. The preliminary fair value of the identifiable intangible assets and goodwill related to this acquisition is as follows (in millions):
| | | | | | | | | | | | | | |
| | Estimated Useful Life in Years | | |
| | | | |
| Customer relationships | | 7 | | $ | 42.1 | |
| Internally-developed software | | 3 | | 4.4 | |
| | | | |
| Trademarks | | Indefinite | | 32.4 | |
| | | | $ | 78.9 | |
| | | | |
| Goodwill | | | | $ | 247.9 | |
__________
Approximately $217.4 million of the goodwill for the TopBloc acquisition is deductible for income taxes.
5. Goodwill and Identifiable Intangible Assets
Goodwill by reportable segment is as follows (in millions):
| | | | | | | | | | | | | | | | | | | |
| Commercial | | Federal Government | | | | Total |
Balance as of December 31, 2023 | $ | 1,075.8 | | | $ | 818.3 | | | | | $ | 1,894.1 | |
| | | | | | | |
| Translation adjustment | (1.0) | | | — | | | | | (1.0) | |
Balance as of December 31, 2024 | 1,074.8 | | | 818.3 | | | | | 1,893.1 | |
| Acquisition of TopBloc | 247.9 | | | — | | | | | 247.9 | |
| | | | | | | |
| Translation adjustment | 1.4 | | | — | | | | | 1.4 | |
| | | | | | | |
| | | | | | | |
Balance at September 30, 2025 | $ | 1,324.1 | | | $ | 818.3 | | | | | $ | 2,142.4 | |
Acquired identifiable intangible assets consisted of the following (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | September 30, 2025 | | December 31, 2024 | | |
| Estimated Useful Life in Years | | Gross Carrying Amount | | Accumulated Amortization | | Net Carrying Amount | | Gross Carrying Amount | | Accumulated Amortization | | Net Carrying Amount | | |
| Subject to amortization: | | | | | | | | | | | | | | | |
| Customer and contractual relationships | 6 - 13 | | $ | 447.4 | | | $ | 289.5 | | | $ | 157.9 | | | $ | 405.3 | | | $ | 245.0 | | | $ | 160.3 | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Non-compete agreements | 3 - 7 | | 21.4 | | | 17.4 | | | 4.0 | | | 21.4 | | | 14.7 | | | 6.7 | | | |
| Internally-developed software | 3 | | 4.4 | | | 0.9 | | | 3.5 | | | — | | | — | | | — | | | |
| | | 473.2 | | | 307.8 | | | 165.4 | | | 426.7 | | | 259.7 | | | 167.0 | | | |
| Not subject to amortization: | | | | | | | | | | | | | | | |
| Trademarks | | | 305.2 | | | — | | | 305.2 | | | 272.8 | | | — | | | 272.8 | | | |
| | | $ | 778.4 | | | $ | 307.8 | | | $ | 470.6 | | | $ | 699.5 | | | $ | 259.7 | | | $ | 439.8 | | | |
Estimated future amortization expense is as follows (in millions):
| | | | | |
| Remainder of 2025 | $ | 16.8 | |
| 2026 | 54.5 | |
| 2027 | 40.4 | |
| 2028 | 23.1 | |
| 2029 | 17.0 | |
| Thereafter | 13.6 | |
| $ | 165.4 | |
6. Long-Term Debt
Long-term debt consisted of the following (in millions):
| | | | | | | | | | | | | | | |
| September 30,
2025 | | December 31,
2024 | | | | |
| Senior Secured Credit Facility: | | | | | | | |
$500 million revolving credit facility, due 2028 | $ | 39.0 | | | $ | — | | | | | |
| Term loan A, due 2028 | 99.4 | | | — | | | | | |
| Term loan B, due 2030 | 490.0 | | | 493.8 | | | | | |
| Unsecured Senior Notes, due 2028 | 550.0 | | | 550.0 | | | | | |
| 1,178.4 | | | 1,043.8 | | | | | |
| Unamortized deferred loan costs | (4.6) | | | (5.3) | | | | | |
| Principal payments due in the next 12 months | (8.1) | | | (5.0) | | | | | |
| Long-term debt | $ | 1,165.7 | | | $ | 1,033.5 | | | | | |
__________
The Company is required to make quarterly minimum principal payments until maturity as follows: (i) for term loan A, payments totaling $2.5 million for the first year and $5.0 million annually thereafter, and (ii) for term loan B, payments totaling $5.0 million annually. These payments are reflected in other current liabilities on the accompanying condensed consolidated balance sheets. Considering the annual required principal payments for the term loans, the balances due at maturity will be $90.0 million for term loan A and $466.3 million for term loan B.
Senior Secured Credit Facility — In July 2025, the Company amended its senior secured credit facility (the "facility”). The amendment provided an incremental term loan facility ("term loan A") in an aggregate principal amount of $100.0 million. Term loan A bears interest, at the Company's election, at (i) the secured overnight financing rate ("SOFR") plus 1.50 to 2.50 percent, or (ii) the bank's base rate plus 0.50 to 1.50 percent. Borrowings under the $490.0 million term loan B bear interest, at the Company's election, at (i) SOFR plus 1.75 percent, or (ii) the bank’s base rate plus 0.75 percent. Borrowings under the $500.0 million revolving credit facility (the "revolver") bear interest, at the Company's election, at (i) SOFR plus a 10 basis points adjustment plus 2.00 to 3.00 percent, or (ii) the bank’s base rate plus 1.00 to 2.00 percent, depending on leverage levels. A commitment fee of 0.30 to 0.45 percent is payable on the undrawn portion of the revolver. The facility is subject to various restrictive covenants, including a maximum ratio of senior secured debt to trailing-twelve-months of lender-defined consolidated EBITDA of 3.75 to 1, which was 1.45 to 1 at September 30, 2025. The facility is secured by substantially all of the Company's assets and at September 30, 2025, the Company was in compliance with its debt covenants.
Unsecured Senior Notes — The Company has $550.0 million of unsecured senior notes, due in 2028, which bear interest at 4.625 percent payable semiannually in arrears on May 15 and November 15. These notes are unsecured obligations and are subordinate to the senior secured credit facility. These notes also contain certain customary limitations, including the Company's ability to incur additional indebtedness, engage in mergers and acquisitions, transfer or sell assets, and make certain distributions.
7. Commitments and Contingencies
The Company is involved in various legal proceedings, claims and litigation arising in the ordinary course of business, and collective class and Private Attorneys General Act ("PAGA") actions alleging violations of wage and hour laws. The Company does not believe that the disposition of matters that are pending or asserted will have a material effect on its condensed consolidated financial statements.
8. Income Taxes
For interim reporting periods, the Company’s provision for income taxes is calculated using its annualized estimated effective tax rate for the year. This rate is based on its estimated full-year income and the related income tax expense for each jurisdiction in which the Company operates. The effective tax rate can be affected by changes in the geographical mix, permanent differences, and the estimate of full year pre-tax accounting income. This rate is adjusted for the effects of discrete items occurring in the period.
On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA"), which includes a broad range of tax reform provisions, was signed into law in the United States. The Company does not expect the OBBBA to materially affect its estimated effective tax rate.
9. Earnings per Share
The following is a reconciliation of the number of shares and share equivalents used to calculate basic and diluted earnings per share (in millions, except per share data).
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended | | Nine Months Ended | | |
| September 30, | | September 30, | | |
| 2025 | | 2024 | | 2025 | | 2024 | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| Net income | $ | 38.1 | | | $ | 47.5 | | | $ | 88.3 | | | $ | 132.8 | | | | | |
| | | | | | | | | | | |
Weighted-average number of common shares outstanding - basic | 43.5 | | | 44.5 | | | 43.7 | | | 45.4 | | | | | |
| Dilutive effect of common share equivalents | 0.2 | | | 0.5 | | | 0.2 | | | 0.5 | | | | | |
Weighted-average number of common shares and share equivalents outstanding - diluted | 43.7 | | | 45.0 | | | 43.9 | | | 45.9 | | | | | |
| | | | | | | | | | | |
| Basic earnings per share | $ | 0.88 | | | $ | 1.07 | | | $ | 2.02 | | | $ | 2.93 | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| Diluted earnings per share | $ | 0.87 | | | $ | 1.06 | | | $ | 2.01 | | | $ | 2.89 | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
10. Segment Reporting
ASGN provides information technology ("IT") services and solutions across the commercial and government sectors. ASGN operates through two segments, Commercial and Federal Government. The Commercial Segment, which is the largest segment, provides consulting, creative digital marketing, and permanent placement services primarily to Fortune 1000 and large mid-market companies. The Federal Government Segment provides advanced IT solutions in data and AI, cybersecurity, and enterprise transformation to the following four customer types: (i) Defense and Intelligence, (ii) National Security, (iii) Federal Civilian, and (iv) other clients. Virtually all of the Company's revenues are generated in the United States.
The Company's chief executive officer ("CEO") is the chief operating decision maker and he reviews segment revenues, gross profit and operating income for each segment. He also considers forecast-to-actual variances on a monthly basis for these financial measures when making decisions about allocating resources to the segments and uses these segment financial measures in the annual budget process. Segment information is as follows (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, 2025 | | Nine Months Ended September 30, 2025 |
| | Commercial | | Federal Government | | Total | | Commercial | | Federal Government | | Total |
| Revenues | | | | | | | | | | | | |
| Consulting | | $ | 334.9 | | | $ | 300.1 | | | $ | 635.0 | | | $ | 950.7 | | | $ | 908.7 | | | $ | 1,859.4 | |
| Assignment | | 376.4 | | | — | | | 376.4 | | | 1,140.9 | | | — | | | 1,140.9 | |
| | 711.3 | | | 300.1 | | | 1,011.4 | | | 2,091.6 | | | 908.7 | | | 3,000.3 | |
| Costs of services | | 475.4 | | | 239.1 | | | 714.5 | | | 1,404.6 | | | 730.1 | | | 2,134.7 | |
| Gross profit | | 235.9 | | | 61.0 | | | 296.9 | | | 687.0 | | | 178.6 | | | 865.6 | |
| Segment depreciation and other amortization | | 10.2 | | | 1.4 | | | 11.6 | | | 28.2 | | | 4.4 | | | 32.6 | |
| Other segment expenses | | 147.3 | | | 27.9 | | | 175.2 | | | 442.6 | | | 86.2 | | | 528.8 | |
| Segment SG&A expenses | | 157.5 | | | 29.3 | | | 186.8 | | | 470.8 | | | 90.6 | | | 561.4 | |
| Amortization of intangible assets | | 10.5 | | | 6.3 | | | 16.8 | | | 28.8 | | | 19.2 | | | 48.0 | |
| Segment operating income | | 67.9 | | | 25.4 | | | 93.3 | | | 187.4 | | | 68.8 | | | 256.2 | |
| Corporate SG&A expenses | | | | | | 25.4 | | | | | | | 82.1 | |
| Operating income | | | | | | 67.9 | | | | | | | 174.1 | |
| Interest expense, net | | | | | | 17.4 | | | | | | | 51.0 | |
| Income before taxes | | | | | | 50.5 | | | | | | | 123.1 | |
| Provision for income taxes | | | | | | 12.4 | | | | | | | 34.8 | |
| Net income | | | | | | $ | 38.1 | | | | | | | $ | 88.3 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, 2024 | | Nine Months Ended September 30, 2024 |
| | Commercial | | Federal Government | | Total | | Commercial | | Federal Government | | Total |
| Revenues | | | | | | | | | | | | |
| Consulting | | $ | 285.0 | | | $ | 312.2 | | | $ | 597.2 | | | $ | 843.5 | | | $ | 938.7 | | | $ | 1,782.2 | |
| Assignment | | 433.8 | | | — | | | 433.8 | | | 1,332.5 | | | — | | | 1,332.5 | |
| | 718.8 | | | 312.2 | | | 1,031.0 | | | 2,176.0 | | | 938.7 | | | 3,114.7 | |
| Costs of services | | 483.0 | | | 247.6 | | | 730.6 | | | 1,469.1 | | | 747.9 | | | 2,217.0 | |
| Gross profit | | 235.8 | | | 64.6 | | | 300.4 | | | 706.9 | | | 190.8 | | | 897.7 | |
| Segment depreciation and other amortization | | 7.4 | | | 1.2 | | | 8.6 | | | 21.9 | | | 3.7 | | | 25.6 | |
| Other segment expenses | | 148.5 | | | 31.4 | | | 179.9 | | | 446.2 | | | 92.6 | | | 538.8 | |
| Segment SG&A expenses | | 155.9 | | | 32.6 | | | 188.5 | | | 468.1 | | | 96.3 | | | 564.4 | |
| Amortization of intangible assets | | 6.6 | | | 7.4 | | | 14.0 | | | 22.0 | | | 22.2 | | | 44.2 | |
| Segment operating income | | 73.3 | | | 24.6 | | | 97.9 | | | 216.8 | | | 72.3 | | | 289.1 | |
| Corporate SG&A expenses | | | | | | 19.0 | | | | | | | 58.9 | |
| Operating income | | | | | | 78.9 | | | | | | | 230.2 | |
| Interest expense, net | | | | | | 16.0 | | | | | | | 49.4 | |
| Income before taxes | | | | | | 62.9 | | | | | | | 180.8 | |
| Provision for income taxes | | | | | | 15.4 | | | | | | | 48.0 | |
| Net income | | | | | | $ | 47.5 | | | | | | | $ | 132.8 | |
__________
Costs of services include an immaterial amount of depreciation expense.
Other segment expenses include compensation-related expenses, rent, marketing, and other general and administrative expenses.
Corporate SG&A expenses include compensation-related expenses, stock-based compensation, depreciation, acquisition, integration and strategic planning expenses, and public company expenses.
Substantially all of the revenues from the Commercial Segment are generated from time and materials ("T&M") contracts. Federal Government Segment revenues by contract type are as follows (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended |
| | September 30, | | September 30, |
| | 2025 | | 2024 | | 2025 | | 2024 |
| Firm-fixed-price | | $ | 84.2 | | | $ | 92.6 | | | $ | 260.2 | | | $ | 273.8 | |
| T&M | | 117.0 | | | 128.0 | | | 371.2 | | | 395.4 | |
| Cost reimbursable | | 98.9 | | | 91.6 | | | 277.3 | | | 269.5 | |
| | $ | 300.1 | | | $ | 312.2 | | | $ | 908.7 | | | $ | 938.7 | |
Federal Government Segment revenues by customer type are as follows (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended | | |
| | September 30, | | September 30, | | |
| | 2025 | | 2024 | | 2025 | | 2024 | | | | |
| Department of Defense and Intelligence Agencies | | $ | 130.7 | | | $ | 141.5 | | | $ | 395.8 | | | $ | 433.2 | | | | | |
| National Security | | 80.7 | | | 72.1 | | | 242.1 | | | 209.7 | | | | | |
| Federal Civilian | | 57.1 | | | 67.2 | | | 176.9 | | | 202.8 | | | | | |
| Other | | 31.6 | | | 31.4 | | | 93.9 | | | 93.0 | | | | | |
| | $ | 300.1 | | | $ | 312.2 | | | $ | 908.7 | | | $ | 938.7 | | | | | |
__________
Federal Government Segment revenues by customer type for the three and nine months ended September 30, 2024 have been recast to conform to the current period presentation.
11. Fair Value Measurements
Recurring Fair Value Measurements — The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and accrued payroll approximate their fair value based on their short-term nature.
Nonrecurring Fair Value Measurements — Certain assets, such as goodwill and trademarks, are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances, such as, when there is evidence of impairment. There were no fair value adjustments for non-financial assets or liabilities during the nine months ended September 30, 2025.
The carrying amount of long-term debt recorded in the Company’s accompanying condensed consolidated balance sheet at September 30, 2025 was $1.2 billion (see Note 6. Long-Term Debt) and its fair value was slightly less than the carrying value. The fair value for the term loan B and senior notes was determined using quoted prices in active markets for identical liabilities (Level 1 inputs) and the fair value for the term loan A was determined using quotes prices in active markets for similar liabilities (Level 2 inputs). The carrying value of the revolving credit facility approximates its fair value.
Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations
The information in this discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Such statements are based upon current expectations, as well as management's beliefs and assumptions, and involve a high degree of risk and uncertainty. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Statements that include the words "believes," "anticipates," "plans," "expects," "intends," and similar expressions that convey uncertainty of future events or outcomes are forward-looking statements. Our actual results could differ materially from those discussed or suggested in the forward-looking statements herein. Factors that could cause or contribute to such differences include those described in Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2024 ("2024 10-K"). In addition, as a result of these and other factors, our past financial performance should not be relied on as an indication of future performance. All forward-looking statements in this document are based on information available to us as of the filing date of this Quarterly Report on Form 10-Q and we assume no obligation to update any forward-looking statements or the reasons why our actual results may differ.
OVERVIEW
ASGN provides IT services and solutions across the commercial and government sectors. ASGN operates through two segments, Commercial and Federal Government. The Commercial Segment, which is the largest segment, provides consulting, creative digital marketing, and permanent placement services primarily to Fortune 1000 and large mid-market companies. The Federal Government Segment provides advanced IT solutions in data and AI, cybersecurity, and enterprise transformation to the following four customer types: (i) Defense and Intelligence, (ii) National Security, (iii) Federal Civilian, and (iv) other clients. Virtually all of the Company's revenues are generated in the United States.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2025 COMPARED WITH THE THREE MONTHS ENDED SEPTEMBER 30, 2024
Revenues
Revenues for the quarter were $1.0 billion, down 1.9 percent year-over-year. The table below shows our revenues by segment for the three months ended September 30, 2025 and 2024 (in millions).
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | % of Total | | |
| | 2025 | | 2024 | | | | Change | | | | 2025 | | 2024 | | | | Change | | |
| | | | | | | | | | | | | | | | | | | | |
| Commercial | | | | | | | | | | | | | | | | | | | | |
| Consulting | | $ | 334.9 | | | $ | 285.0 | | | | | 17.5 | % | | | | 33.1 | % | | 27.6 | % | | | | 5.5 | % | | |
| Assignment | | 376.4 | | | 433.8 | | | | | (13.2 | %) | | | | 37.2 | % | | 42.1 | % | | | | (4.9 | %) | | |
| | 711.3 | | | 718.8 | | | | | (1.0 | %) | | | | 70.3 | % | | 69.7 | % | | | | 0.6 | % | | |
| Federal Government | | 300.1 | | 312.2 | | | | | (3.9 | %) | | | | 29.7 | % | | 30.3 | % | | | | (0.6 | %) | | |
| Consolidated | | $ | 1,011.4 | | | $ | 1,031.0 | | | | | (1.9 | %) | | | | 100.0 | % | | 100.0 | % | | | | | | |
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| | | | | | | | | | | | | | | | | | | | |
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Commercial Segment revenues (70.3 percent of total revenues) were down 1.0 percent year-over-year and are categorized in five industries: (i) Consumer and Industrial, (ii) Financial Services, (iii) Technology, Media, and Telecom ("TMT"), (iv) Healthcare, and (v) Business Services. Consumer and Industrial was up mid-teens, Healthcare was up high single digits, and the remaining three industries declined. Federal Government Segment revenues (29.7 percent of total revenues) were down 3.9 percent year-over-year. Federal Government Segment revenues are categorized into four customer types: (i) Defense and Intelligence, (ii) National Security, (iii) Civilian, and (iv) other clients. Federal Civilian and Defense and Intelligence both declined year-over-year, while National Security was up.
Total IT consulting revenues were $635.0 million (62.8 percent of total revenues), up 6.3 percent year-over-year. Commercial Segment consulting revenues were $334.9 million, up 17.5 percent year-over-year. Federal Government Segment revenues, which are all consulting revenues, were $300.1 million, down 3.9 percent year-over-year as stated above. Assignment revenues, which totaled $376.4 million (37.2 percent of total revenues), were down 13.2 percent year-over-year, reflecting continued softness in the portions of the Commercial Segment business that are more sensitive to changes in macroeconomic cycles.
Gross Profit and Gross Margin
The table below shows gross profit and gross margin by segment for the three months ended September 30, 2025 and 2024 (in millions).
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Gross Profit | | | | Gross Margin | | |
| | 2025 | | 2024 | | | | Change | | | | 2025 | | 2024 | | | | Change | | |
| | | | | | | | | | | | | | | | | | | | |
| Commercial | | $ | 235.9 | | | $ | 235.8 | | | | | — | % | | | | 33.2 | % | | 32.8 | % | | | | 0.4 | % | | |
| Federal Government | | 61.0 | | | 64.6 | | | | | (5.6 | %) | | | | 20.3 | % | | 20.7 | % | | | | (0.4 | %) | | |
| Consolidated | | $ | 296.9 | | | $ | 300.4 | | | | | (1.2 | %) | | | | 29.4 | % | | 29.1 | % | | | | 0.3 | % | | |
Gross profit is comprised of revenues, less costs of services, which consist primarily of compensation for our contract professionals, other direct costs, and reimbursable out-of-pocket expenses.
Consolidated gross profit declined 1.2 percent year-over-year on a revenue decline of 1.9 percent. Gross margin for the third quarter of 2025 was 29.4 percent, an expansion of 30 basis points compared with the third quarter of 2024. Gross margin for the Commercial Segment was up 40 basis points, reflecting a higher mix of consulting revenues. Gross margin for the Federal Government Segment was down 40 basis points, due to the loss of certain higher margin contracts as a result of initiatives associated with the U.S. Department of Government Efficiency.
Selling, General, and Administrative Expenses
Selling, general, and administrative ("SG&A") expenses consist primarily of compensation expense for our field operations and corporate staff, information systems, rent, public company expenses, and other general and administrative expenses. SG&A expenses were $212.2 million, compared with $207.5 million in the third quarter of 2024. SG&A expenses in the third quarter of 2025 included $4.2 million in acquisition, integration, and strategic planning expenses.
Amortization of Intangible Assets
Amortization of intangible assets was $16.8 million, compared with $14.0 million in the third quarter of 2024. The increase relates to the effects of the TopBloc acquisition, partially offset by older intangibles that have reached the end of their useful lives.
Interest Expense, Net
Interest expense, net, which consists primarily of cash-based interest expense, amortization, adjustments to deferred loan costs, and interest income, was $17.4 million, up from $16.0 million in the third quarter of 2024. The increase was due to higher outstanding borrowings. The weighted-average outstanding borrowings and cash-based interest rates in the third quarter of 2025 and 2024 were $1.22 billion and 5.7 percent, and $1.05 billion and 6.0 percent, respectively.
Provision for Income Taxes
The provision for income taxes was $12.4 million, down from $15.4 million in the third quarter of 2024 due to lower income before income taxes. The effective tax rate was 24.6 percent, up from 24.5 percent in the third quarter of 2024.
Net Income
Net income was $38.1 million, down from $47.5 million in the third quarter of 2024.
RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 COMPARED WITH THE NINE MONTHS ENDED SEPTEMBER 30, 2024
Revenues
Revenues for the first nine months of the year were $3.0 billion, down 3.7 percent year-over-year. The table below shows our revenues by segment for the nine months ended September 30, 2025 and 2024 (in millions).
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | % of Total | | |
| | 2025 | | 2024 | | | | Change | | | | 2025 | | 2024 | | | | Change | | |
| | | | | | | | | | | | | | | | | | | | |
| Commercial | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| Consulting | | $ | 950.7 | | | $ | 843.5 | | | | | 12.7 | % | | | | 31.7 | % | | 27.1 | % | | | | 4.6 | % | | |
| Assignment | | 1,140.9 | | | 1,332.5 | | | | | (14.4 | %) | | | | 38.0 | % | | 42.8 | % | | | | (4.8 | %) | | |
| | 2,091.6 | | | 2,176.0 | | | | | (3.9 | %) | | | | 69.7 | % | | 69.9 | % | | | | (0.2 | %) | | |
| Federal Government | | 908.7 | | | 938.7 | | | | | (3.2 | %) | | | | 30.3 | % | | 30.1 | % | | | | 0.2 | % | | |
| Consolidated | | $ | 3,000.3 | | | $ | 3,114.7 | | | | | (3.7 | %) | | | | 100.0 | % | | 100.0 | % | | | | | | |
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Commercial Segment revenues (69.7 percent of total revenues) were down 3.9 percent year-over-year. Consumer and Industrial revenues were up low double digits, while the remaining four commercial industries declined year-over-year. Federal Government Segment revenues (30.3 percent of total revenues) were down 3.2 percent year-over-year. Federal Civilian and Defense and Intelligence revenues both declined, while National Security revenues were up.
Total IT consulting services revenues were $1.9 billion (62.0 percent of total revenues), up 4.3 percent year-over-year. Commercial Segment consulting revenues were $950.7 million, up 12.7 percent year-over-year. Federal Government Segment revenues, which are all consulting revenues, were $908.7 million, down 3.2 percent year-over-year as stated above. Assignment revenues, which totaled $1.1 billion (38.0 percent of total revenues), were down 14.4 percent year-over-year, reflecting continued softness in the portions of the Commercial Segment business that are more sensitive to changes in macroeconomic cycles.
Gross Profit and Gross Margin
The table below shows gross profit and gross margin by segment for the nine months ended September 30, 2025 and 2024 (in millions).
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| | Gross Profit | | | | Gross Margin | | |
| | 2025 | | 2024 | | | | Change | | | | 2025 | | 2024 | | | | Change | | |
| | | | | | | | | | | | | | | | | | | | |
| Commercial | | $ | 687.0 | | | $ | 706.9 | | | | | (2.8 | %) | | | | 32.8 | % | | 32.5 | % | | | | 0.3 | % | | |
| Federal Government | | 178.6 | | | 190.8 | | | | | (6.4 | %) | | | | 19.7 | % | | 20.3 | % | | | | (0.6 | %) | | |
| Consolidated | | $ | 865.6 | | | $ | 897.7 | | | | | (3.6 | %) | | | | 28.9 | % | | 28.8 | % | | | | 0.1 | % | | |
Consolidated gross profit declined 3.6 percent year-over-year on a revenue decline of 3.7 percent. Gross margin was 28.9 percent, an expansion of 10 basis points from the first nine months of 2024. Gross margin for the Commercial Segment was up 30 basis points, reflecting a higher mix of consulting revenues. Gross margin for the Federal Government Segment was down 60 basis points, primarily due to a higher volume of revenues from low-margin software licenses, the loss of certain higher margin contracts as a result of initiatives associated with the U.S. Department of Government Efficiency, and higher rates of fringe benefits.
Selling, General, and Administrative Expenses
SG&A expenses were $643.5 million, up from $623.3 million in the first nine months of 2024. SG&A expenses in the first nine months of 2025 included $15.8 million in acquisition, integration, and strategic planning expenses, inclusive of $5.2 million in charges related to strategic workforce optimization initiatives. Additionally, in 2025, there was a $4.4 million write-off charge related to previously capitalized costs for software enhancements that will no longer be placed into service.
Amortization of Intangible Assets
Amortization of intangible assets was $48.0 million, compared with $44.2 million in the first nine months of 2024. The increase relates to the effects of the TopBloc acquisition, partially offset by older intangibles that have reached the end of their useful lives.
Interest Expense, Net
Interest expense, net was $51.0 million, up from $49.4 million in the first nine months of 2024. Excluding $1.5 million of costs from the prior year period that related to the March 2024 amendment to the senior secured credit facility, the weighted-average outstanding borrowings and cash-based interest rates in the first nine months of 2025 and 2024 were $1.21 billion and 5.6 percent, and $1.05 billion and 6.1 percent, respectively.
Provision for Income Taxes
The provision for income taxes was $34.8 million, down from $48.0 million in the first nine months of 2024 due to lower income before income taxes. The effective tax rate was 28.3 percent, up from 26.5 percent in the first nine months of 2024. The increase in the effective tax rate relates to shortfalls on stock-based compensation.
Net Income
Net income was $88.3 million, down from $132.8 million in the first nine months of 2024.
Commercial Segment - Consulting Metrics
Commercial consulting bookings are the value of new contracts entered into during a specified period, including adjustments for the effects of changes in contract scope and contract terminations ("Bookings"). The underlying contracts are terminable by the client on short notice with little or no termination penalties. Measuring Bookings involves the use of estimates and judgments and there are no independent standards or requirements governing the calculation of bookings. Information regarding Bookings is not comparable to, nor should it be substituted for, an analysis of reported revenues. The book-to-bill ratio for our commercial consulting revenues is the ratio of Bookings to commercial consulting revenues for a specified period.
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| | Three Months Ended | | | | Trailing-Twelve-Months Ended |
| | September 30, | | | | September 30, |
(Dollars in millions) | | 2025 | | 2024 | | | | | | 2025 | | 2024 |
| Bookings | | $ | 324.0 | | | $ | 282.5 | | | | | | | $ | 1,426.6 | | | $ | 1,244.8 | |
| Book-to-Bill Ratio | | 1.0 to 1 | | 1.0 to 1 | | | | | | 1.2 to 1 | | 1.1 to 1 |
Federal Government Segment Metrics
Contract backlog for our Federal Government Segment represents the estimated amount of future revenues to be recognized under awarded contracts, including task orders and options, at a point in time ("Contract Backlog"). These estimates are subject to change and may be affected by the execution of new contracts, the extension or early termination of existing contracts, the non-renewal or completion of current contracts, and adjustments to estimates for previously included contracts. There is no assurance our contract backlog will result in future revenues. The timing of the execution of new contracts and other changes are affected by the funding cycles of the government and can vary from quarter to quarter. New contract awards are the estimated amount of future revenues to be recognized under contracts awarded during a specified period, including adjustments to estimates for contracts awarded in previous periods (“New Contract Awards”). Information regarding New Contract Awards is not comparable to, nor should it be substituted for, an analysis of reported revenues. Due to variability, New Contract Awards are presented on a trailing-twelve-months (“TTM”) basis. The book-to-bill ratio for our Federal Government Segment is the ratio of New Contract Awards to revenues for a specified period. Contract backlog coverage ratio is calculated as total Contract Backlog divided by TTM revenues.
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| TTM Ended September 30, |
| (Dollars in millions) | 2025 | | 2024 |
| New Contract Awards | $ | 1,158.6 | | | $ | 1,114.3 | |
| Book-to-Bill Ratio | 1.0 to 1 | | 0.9 to 1 |
| | | | | | | | | | | | | | | | | | | | |
| (Dollars in millions) | | September 30,
2025 | | December 31,
2024 | | September 30,
2024 |
| Funded Contract Backlog | | $ | 609.8 | | | $ | 529.0 | | | $ | 612.2 | |
| Negotiated Unfunded Contract Backlog | | 2,476.7 | | | 2,589.6 | | | 2,516.3 | |
| Contract Backlog | | $ | 3,086.5 | | | $ | 3,118.6 | | | $ | 3,128.5 | |
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| Contract Backlog Coverage Ratio | | 2.6 to 1 | | 2.5 to 1 | | 2.5 to 1 |
Liquidity and Capital Resources
Our working capital, which is current assets less current liabilities, at September 30, 2025, was $456.1 million, and our cash and cash equivalents were $126.5 million. Our cash flows from operating activities have been our primary source of liquidity and have been sufficient to meet our working capital and capital expenditure needs. At September 30, 2025, we had approximately $460.0 million available under the $500.0 million revolving credit facility. We believe that our cash and cash equivalents on hand, expected operating cash flows, and availability under our revolving credit facility will be sufficient to fulfill our obligations, working capital requirements, and capital expenditures for the next 12 months and beyond.
Net cash provided by operating activities was $225.6 million for the first nine months of 2025, compared with $299.8 million in the same period of 2024. Net cash provided by operating activities before changes in operating assets and liabilities was $217.9 million, compared with $245.0 million in the same period of 2024. Changes in operating assets and liabilities provided net cash of $7.7 million for the first nine months of 2025, compared with $54.8 million in the same period of 2024. This year-over-year change primarily related to an increase in accounts receivable days sales outstanding in the first nine months of 2025.
Net cash used in investing activities for the first nine months of 2025 was $337.3 million, comprised of $306.1 million used to acquire TopBloc and $31.2 million used for capital expenditures. Net cash used in investing activities for the first nine months of 2024 was $24.0 million and related to capital expenditures.
Net cash provided by financing activities was $31.8 million for the first nine months of 2025 and included net borrowings under the senior secured credit facility totaling $134.6 million, offset by $105.9 million used to repurchase the Company's common stock. Net cash used in financing activities in the first nine months of the prior year was $283.6 million and included $283.3 million used to repurchase the Company's common stock.
For details on the (i) senior secured credit facility, comprised of a revolving credit facility, term loan A, and term loan B, and (ii) unsecured senior notes, see Note 6. Long-Term Debt in Part I, Item 1 in this Quarterly Report on Form 10-Q.
Commitments and Contingencies — There have been no material changes to our contractual cash obligations from those described in our 2024 10-K.
Recent Accounting Pronouncements
All ASUs that are applicable, and not yet adopted, are disclosed in the Company's Annual Report on Form 10-K and in Note 2. Accounting Standards Update in the notes to the condensed consolidated financial statements in Part I, Item 1 in this Quarterly Report on Form 10-Q.
Critical Accounting Policies
There were no material changes to our critical accounting policies and estimates during the third quarter of 2025 compared with those disclosed in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our 2024 10-K.
Item 3 — Quantitative and Qualitative Disclosures about Market Risks
With respect to our quantitative and qualitative disclosures about interest rates risks, there have been no material changes to the information included in our 2024 10-K. Our exposure to interest rate risk is associated with our debt instruments. See Note 6. Long-Term Debt in Part I, Item 1 in this Quarterly Report on Form 10-Q for a further description of our debt instruments. A hypothetical 100 basis-point change in interest rates on variable-rate debt would have resulted in an interest expense fluctuation of approximately $6.3 million based on $628.4 million of debt outstanding for any 12-month period. We have not entered into any market risk sensitive instruments for trading purposes.
Item 4 — Controls and Procedures
As of the end of the period covered by this report, our management carried out an evaluation, under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act). Based on this evaluation, our Principal Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures are effective as of the end of the period covered by this report. The term "disclosure controls and procedures" means controls and other procedures of the Company that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms. "Disclosure controls and procedures" include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company's management, including its Principal Executive Officer and Principal Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
There were no changes in our internal controls over financial reporting that occurred during the three months ended September 30, 2025 that have materially affected, or are reasonably likely to affect, our internal control over financial reporting.
PART II — OTHER INFORMATION
Item 1 — Legal Proceedings
We are involved in various legal proceedings, investigations, claims, and litigation arising in the ordinary course of business, and collective class and PAGA actions alleging violations of wage and hour laws. However, based on the facts currently available, we do not believe that the disposition of matters that are pending or asserted will have a material effect on our financial position, results of operations or cash flows.
Item 1A — Risk Factors
There have been no material changes to the risk factors previously described in our 2024 10-K.
Item 2 — Unregistered Sales of Securities and Use of Proceeds
On April 24, 2024, the Company announced that the Company's Board had approved a new stock repurchase program under which the Company may repurchase $750.0 million of its common stock over the following two years. Under terms of the program, purchases can be made in the open market or under a Rule 10b5-1 trading plan. The stock repurchase program does not obligate the Company to acquire any particular amount of the Company's stock and may be suspended at any time at the Company's discretion.
The Company's repurchases of its common stock during the three months ended September 30, 2025 are shown in the table below, and the approximate dollar value of shares that may be purchased under the program as of September 30, 2025, are shown in the table below.
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| Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plan | Approximate Dollar Value of Shares That May Yet be Purchased Under
the Plan
(in millions) |
| July 1 - 31, 2025 | 93,962 | | | $ | 53.21 | | 93,962 | | | $ | 464.6 | |
| August 1 - 31, 2025 | 406,897 | | | $ | 51.61 | | 406,897 | | | $ | 443.6 | |
| September 1 - 30, 2025 | 414,055 | | | $ | 50.69 | | 414,055 | | | $ | 422.6 | |
| Total | 914,914 | | | $ | 51.36 | | 914,914 | | | $ | 422.6 | |
During the three months ended September 30, 2025 and in connection with our stock-based compensation plans, 16,052 shares of our common stock with an aggregate value of $0.8 million were tendered by employees for payment of applicable statutory tax withholding. These shares are excluded from the table above.
Item 3 — Defaults Upon Senior Securities
None.
Item 4 — Mine Safety Disclosures
None.
Item 5 — Other Information
(c) During the three months ended September 30, 2025, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
Item 6 — Exhibits
INDEX TO EXHIBITS
| | | | | | | | |
| Number | | Description |
| 3.1 | | Amended and Restated Certificate of Incorporation of On Assignment, Inc., effective June 23, 2014 (incorporated by reference from Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the SEC on June 25, 2014) |
| 3.2 | | Certificate of Amendment of Amended and Restated Certificate of Incorporation of On Assignment, Inc. effective April 2, 2018 (incorporated by reference from Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the SEC on March 16, 2018) |
| 3.3 | | Sixth Amended and Restated Bylaws of ASGN Incorporated, effective September 18, 2025 (incorporated by reference from Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the SEC on September 22, 2025)
|
| 4.1 | | Specimen Common Stock Certificate (incorporated by reference from an exhibit to the Company's Registration Statement on Form S-1 (File No. 33-50646) declared effective on September 21, 1992) (P) |
| 10.1 | | Second Amendment to Third Amended and Restated Credit Agreement, dated as of July 31, 2025, by and among ASGN Incorporated, as the borrower, Wells Fargo Bank, National Association, as administrative agent, and the lenders named therein (incorporated by reference from Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on July 31, 2025) |
| 19.1* | | ASGN Incorporated Insider Trading Policy, effective September 17, 2025 |
| 31.1* | | Certification of Theodore S. Hanson, Chief Executive Officer, pursuant to Rule 13a-14(a) or 15d-14(a) |
| 31.2* | | Certification of Marie L. Perry, Chief Financial Officer, pursuant to Rule 13a-14(a) or 15d-14(a) |
| 32.1* | | Certification of Theodore S. Hanson, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350 |
| 32.2* | | Certification of Marie L. Perry, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350 |
| 101 | | The following material from this Quarterly Report on Form 10-Q of ASGN Incorporated, Part I, Item 1 of this Form 10-Q formatted in Inline XBRL (Extensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets; (ii) Condensed Consolidated Statements of Operations and Comprehensive Income; (iii) Condensed Consolidated Statement of Stockholders’ Equity; (iv) Condensed Consolidated Statements of Cash Flows; and (v) related notes to these financial statements. |
| 104 | | Cover page interactive data file (formatted in Inline XBRL and contained in Exhibit 101) |
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| * | | Filed herewith. |
| (P) | | This exhibit was originally filed in paper format. Accordingly, a hyperlink has not been provided. |
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SIGNATURES
Pursuant to the requirements of the Exchange Act, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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| ASGN Incorporated |
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| October 29, 2025 | By: | /s/ Marie L. Perry |
| | Marie L. Perry |
| | Executive Vice President and Chief Financial Officer |
| | (Principal Financial Officer and Duly Authorized Officer) |
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| October 29, 2025 | By: | /s/ Rose L. Cunningham |
| | Rose L. Cunningham |
| | Vice President, Chief Accounting Officer and Controller |
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