ASGN’s second quarter results were well received by the market, with revenue surpassing Wall Street expectations despite a modest year-over-year decline. Management attributed this performance to continued momentum in IT consulting, particularly in data, cloud, and AI-driven projects, which now account for a larger share of overall business. CEO Ted Hanson highlighted that commercial consulting bookings, especially in verticals like consumer and industrial, remain robust due to clients prioritizing technology modernization. Hanson noted, “Our IT consulting revenues continue to grow, reaching approximately 63% of revenues for the second quarter.”
Is now the time to buy ASGN? Find out in our full research report (it’s free).
ASGN (ASGN) Q2 CY2025 Highlights:
- Revenue: $1.02 billion vs analyst estimates of $996.6 million (1.4% year-on-year decline, 2.4% beat)
- EPS (GAAP): $0.67 vs analyst expectations of $0.70 (5.4% miss)
- Adjusted EBITDA: $108.5 million vs analyst estimates of $104.1 million (10.6% margin, 4.2% beat)
- Revenue Guidance for Q3 CY2025 is $1.00 billion at the midpoint, roughly in line with what analysts were expecting
- EPS (GAAP) guidance for the full year is $0.86 at the midpoint, missing analyst estimates by 69.5%
- EBITDA guidance for Q3 CY2025 is $111 million at the midpoint, above analyst estimates of $106.8 million
- Operating Margin: 5.8%, down from 7.8% in the same quarter last year
- Market Capitalization: $2.35 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions ASGN’s Q2 Earnings Call
- Tobey O'Brien Sommer (Truist Securities) asked about TopBloc’s performance and its revenue contribution; CEO Ted Hanson confirmed TopBloc is tracking slightly ahead of expectations on both revenue and bookings, and within the anticipated margin range.
- Tobey O'Brien Sommer (Truist Securities) also inquired about the impact of AI on the cyclical Creative Circle business. President Shiv Iyer clarified that the current softness is due to macroeconomic factors, not AI disruption, and the business remains stable quarter-to-quarter.
- Jeffrey Marc Silber (BMO Capital Markets) probed on the DOGE impact in the federal segment. CFO Marie Perry reiterated that the effect was in line with expectations and projected to remain below 2% of total revenues in the next quarter.
- Surinder Singh Thind (Jefferies) questioned the cost and strategic focus of ASGN’s AI investments. Hanson and Iyer explained that AI and IP development are core to the business model and not diluting margins, with costs justified by returns and client demand.
- Jason Daniel Haas (Wells Fargo) asked about the drivers behind the strength in consumer and industrial verticals. Iyer attributed gains to sector-specific solutions in cloud, data, and AI, as well as successful partnerships with technology providers.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be closely tracking (1) the pace of federal contract awards and whether defense spending translates to realized revenue growth; (2) commercial consulting momentum, especially in high-growth verticals like AI and cloud transformation; and (3) stabilization or recovery in the cyclical staffing business. Progress on proprietary AI tool adoption and the outcomes of the upcoming Investor Day will also be key signposts.
ASGN currently trades at $53.54, up from $50.02 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free).
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