ASGN Incorporated

Greetings and welcome to the ASGN Incorporated Third Quarter 2025 Earnest 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 Estigan of Investor Relations. Thank you. You may begin.

Good afternoon. Thank you for joining us today for ASGN's Third 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 ASGN's third quarter 2025 earnings call. ASGN delivered solid performance in the third quarter, with revenues reaching $1.01 billion in an adjusted EBITDA margin of 11.1%, both at the high end of our guidance ranges. Our IT consulting business continues to be a key growth driver, representing approximately 63% of total revenues in the third quarter, up from 58% in the same period last year. Commercial consulting bookings totaled $324 million, translating to a book-to-bill of 1.2 times on a trailing 12-month basis. While bookings remain weighted towards renewals, we are seeing the volume of new wins grow as we take on more complex multi-capability engagements and assessment projects. In our federal segment, new contract awards totaled $461 million for the third quarter, or a booked bill of one times on a trailing 12-month basis, and 1.5 times for the quarter. As anticipated, bookings increased in the third quarter, coinciding with the end of the government fiscal year. Federal contract backlog was approximately $3.1 billion at quarter end, or a coverage ratio of 2.6 times the segment's trailing 12-month revenues. Although IT spending levels remain steady quarter to quarter, our commercial and government clients continue to acknowledge the importance of executing their key initiatives despite macroeconomic conditions. Strong quarterly bookings reflect the demand across our client base, and ongoing investment in AI highlights a significant commitment to digital advancement. Reflecting upon this ongoing trend, ISG highlighted on their third quarter 2025 index call that AI spending is not merely a passing fad, but a fundamental replatforming of enterprise technology. We are witnessing this firsthand as we deploy a growing number of AI use cases on behalf of our client base and are witnessing an increasing volume of data and cloud initiatives blowing through our pipeline as clients prepare for their next phases of digital and AI growth. That said, even with this continued drive towards AI, the path to enterprise-wide AI adoption is not without its challenges. Organizational readiness and operational governance remain hurdles as companies work to streamline and integrate these new technologies into their stats. In addition, many commercial enterprises and government agencies lack the skills and engineering talent needed to successfully deploy AIs. This reality is driving greater reliance on IT service partners like ASGN that can offer the breadth and depth of capabilities needed. On the topic of specialized skill sets, we are actively tracking the potential changes to the H-1BB's application process and believe that any changes to the process will be an incremental positive to ASGN. To further illustrate the demand for our expertise, I'd like to turn the call over to our president, Shiv Iyer.