ASGN Incorporated

Greetings and welcome to the ASGN Incorporated Second Quarter 2025 Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. It is now my pleasure to introduce your host, Kimberly Estakin, Vice President of Investor Relations. Thank you. You may begin.

Good afternoon. Thank you for joining us today for ASGM's second quarter 2025 conference call. With me are Ted Hansen, Chief Executive Officer, Shiv Iyer, 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. Certain 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. These 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 Hansen, Chief Executive Officer.

Thank you, Kim, and thank you for joining ASTN's second quarter 2025 earnings call. ASGN reported solid results for the second quarter. Revenues of $1.02 billion were above the high end of our guidance range, while adjusted EBITDA margin of 10.6% was at the top end of our expectations for the quarter. RIT consulting revenues continue to grow, reaching approximately 63% of revenues for the second quarter, up from 57% in the year-ago period. Macroeconomic uncertainty remains, impacting discretionary spending. Still, clients are focused on staying competitive, driving demand for cloud and data solutions to modernize legacy systems and capitalize on AI. According to ISG Index's second quarter 2025 call, the demand for AI is overcoming macroeconomic distractions, with companies actively investing in generative and agentic AI, deploying cost savings from other areas of their operations. We are experiencing this trend in our commercial consulting bookings, where we are seeing continued demand in data, AI, and digital engineering, including custom application and development. Commercial consulting bookings for the quarter total $417.5 million, translating to a book-to-bill of 1.2 times on a trailing 12-month basis. While bookings remain weighted toward renewals, We are increasingly winning larger, more complex, multi-capability deals as we advance our commercial practice areas and technology partnerships. Our technology partnership with Workday is progressing very well, and TopLock, which continues to perform above our expectations, contributed to growth of our commercial consulting bookings for this second quarter. In our federal business, new contract awards totaled $72 million for the second quarter, or a book-to-bill of 1.1 times on a trailing 12-month basis. Contract awards were challenged as anticipated, reflecting a slowness in award velocity and the impact of DOGE on procurement and approval processes. New federal contract backlog was over $2.9 billion at quarter end and or a coverage ratio of 2.4 times the federal segment's trailing 12-month revenues. Despite lower federal quarterly bookings, our core solution capabilities in AI, cybersecurity, and digital modernization remain well aligned with the administration's efficiency cost savings priorities. In addition, the recently passed One Big Beautiful Bill represents one of the largest single-year increases in U.S. defense spending in modern history, Much of this funding focuses on our primary competencies, including AI and automation, cloud migration, secure communications, and threat intelligence platforms. Ultimately, a constant among this ongoing transformation is a critical need for skilled IT professionals. Case in point, ISG estimates that in the next year, 60% of enterprises plan to expand their IT resources to accelerate the capture of AI benefits. ASGN's distinctive model, which delivers a broad spectrum of skill sets just in time on a contingent basis, continues to set us apart and will enable us to serve as an excellent partner to enterprises and public agencies seeking to achieve their IT modernization goals. We are uniquely positioned to identify the right skill sets for our clients, and with an industry-led focus, we deeply understand the nuances of each sector's IT needs. With that, let me turn the call over to our President, Shiv Iyer, to discuss our industry and solution performance in the second quarter.