ASGN (ASGN) 30 Jul 202020 Q2 Earnings call transcript

Greetings and welcome to the ASGN Incorporated Second Quarter 2020 Earnings Call. [Operator Instructions]. Please note, this conference is being recorded. I will now turn the conference over to your host, Kimberly Esterkin, Investor Relations.

You may begin.

operator. you, Thank thank Second and joining today us Good XXXX you Conference ASGN's Quarter Call. for afternoon, for With me President are Rand Ted Officer. Hanson, President and of Ed Chief Systems; and Blazer, Chief Apex George ECS; Wilson, of Pierce, Financial President Executive Officer;

I get to like contains started, our remind statements. Before that commentary would we everyone forward-looking

uncertainties uncertainties, materially believe our and actual such, obligation these they described from on Although these made as statements. are are we of are this subject assume update to press in could differ today's and reasonable, statements to those Certain call. statements We any risks release and SEC our in results do risks and not filings.

the of free the our supplemental cash Chief non-GAAP measures. release. Please remarks to These are Officer. the and investors.asgn.com. adjusted convenience, non-GAAP will Reconciliations this today's found also measures materials and note Hanson, your that in President to Ted flow. over Executive as we such and turn prepared net certain measures website Relations now referencing our income in are comparable I will between be on at be For press included GAAP EBITDA, section call GAAP adjusted call, measures, can the non-GAAP and supplement intended Investor

thank second quarter. Thank Second Quarter joining in the demonstrated and for you, XXXX Kimberly, business ASGN's you resiliency Earnings Call. solid ASGN's

including over clients agencies, of us defense the positioned end service federal the provided serve and of IT client offerings XX% high to our and scale, base, XXX large well stability Our government COVID-XX. as challenges as and Fortune civilian and key despite well diverse

the $XXX.X million, the year. For prior revenues down X.X% totaled from quarter,

or XX.X%. XX.X% million quarter includes of accounted for $XXX.X margin business, $XXX.X of $XXX.X a for million revenues; and our consolidated accounted our ECS for our segments, while or EBITDA the Oxford Adjusted totaled represented Apex and which solid business, government million of revenues. commercial segment, consolidated Our XX.X% second

provide scenarios guidance the quarter, EBITDA our not illustrative came ahead X.X% formal did in provided. points XXX margins for higher adjusted second higher. we were results Although we the of well Revenues of basis the midpoint and

the expectations. continued Declines through market, commercial for the government strong perform in of and our a of have the April business business stable half the quarter, weeks the commercial and through flattened our the the challenging half be of weeks revenue above cadence first first second Looking X while continued at remained quarter, second proved during X to third quarter. remained the in to

our quarter of Strength throughout XX% X.X% year-over-year. strength the driven Systems, revenues. which resilient largely government was the prior performance the ECS only roughly which Systems by Apex of of second together XX.X% the remained Our was comprise business and industry-leading in Apex year; segment, QX. up over and declined ECS consolidated

current only is to continued of typically recovery. we downturn, also in least, continues quarter, large not solutions strategic in capabilities. As our market strength increase economic and for not the evolve model. ECS to of our the to marketplace, have and see so, undertaken increased initiatives IT-centric, Through I IT Last We've verticals. last also segment, the stability strengthen the exposure share a Each more has business for portfolio. that industry the during much emphasized federal but more benefit have future but become from developments government commercial and camp in strategic than we've ASGN expanded to ASGN positioned doing significant we sector high-end volatility insulated these our the

In terms activity, of of our remains bidding business pipeline solid. new

related their deepen forward agility our initiatives their and and learning, to and web the demand. get increasingly development, needed in transformation data machine our to as project an strategic intelligence, to cloud push are management, business' time accelerating cybersecurity decrease Services are market. artificial engagement, to witnessing digital We experience trend analytics, customer toward clients increase products

are Our complex. also more clients' IT becoming much challenges

We of from are and modernization competitors. steady clients. more to with with a expertise the finding years awarding that a continuing for X behind modernization, end cloud agencies having demand government, customers the cybersecurity the ranges our including IT in the for markets, information process and along government services. work federal increased is held remains the nature IT ASGN our flow. critical market differentiate to characteristics Government the with with contracting of sets federal to to transition important cloud, with managed sophisticated X desire commercial Like and multidisciplinary The firms capabilities creating skill is bids remains to IT strong only of broad government to by cloud. adoption, the commercial The mission sensitive portion migrated ASGN's about

for workforce flow market portion internal given ever consultants to labor our staff, a pipeline and to open structure fortunate to business remote cost teleworking in most shifted which Along We ASGN base, is of to solid of and small Importantly, remotely, provide still business. also safety on-site mid-March. stability billable XX% have our with largest, central the remote work conditions, flexible protocol. work. with the are available our robust of free is continue continue the to clients diverse required And cash skilled contingent as our our today. as to the over XXX% forces one our client

Our In of XXX.X% flow, year-over-year. million cash free is we cash flow $XXX.X free our quarter, liquidity our generated and the strong second up in capacity. generation borrowing source underpins principal

$XXX.X We had sheet on cash also XX. the balance June in million as of

always capital strategic a borrowings outstandings to of end, full million has debt structure of part facility under our have Nevertheless, we quarter revolving been moderate As $XXX of balanced that our supports availability no amount acquisitions. credit ability and facility. under and our had make

remain growth Our long-term acquisition pipeline active, an important of acquisitions part and strategy. is our

significant on capital sense our most the half includes depending or have we which for what we our across With resources markets. generate our second to Apex at of expect Creative commercial M&A the the the business Systems repurchases, performance the time. on borrowing deploy and we background, hand, cash our and segment, on to clients segment With quarter. makes what the let's largest capacity, in multiple year that for Circle, have talk stock end services as strategic about Apex, second

the quarter segment revenue second year-over-year. of million, the For $XXX.X of XXXX, generated down X.X%

during As scale I noted Digital-related only saw year-over-year. Creative quarter. earlier, Circle however, with decline X.X% double-digit deepest placement held and Apex permanent ad, Systems the declined event services. declines, up the placements, amongst

and Creative held without Circle's improve, appeared steady In quarter. level June, Fortunately, revenue weekly Circle declines. Systems' both Apex Systems to while revenues to Creative revenues started mid-second Apex further

the provided. media how a included are of note. view vertical. housekeeping technology, the in in Systems' our industry quarter, services. the quick of classifying health the revenue TMT industry Apex aerospace and compared a to verticals we telecom X second we Beginning as consolidated quarter, offer business. care X part vertical; in speaking for verticals the These previously better Before Telecom trends verticals business indication Life is to and now industry and is internally or is Sciences now and government categorized defense into

information which the our supplemental found website. our on earnings been these quarter, has in Additional verticals investor be posted second presentation for on can

Two significantly accounts across declined year-over-year, see second quarter. of declined lower The due in including acceleration Systems' remaining mix Top for consumer Services quarter. industrial Contract margins for year-over-year, Care, verticals TMT hospitality achieved accounts and Industrials cost June. variable In Now retail for double the business of and and some margins space, anticipated, low down digits. each in and gross Gross though of were single-digit steady. segment the the Creative segment retail, growth XX.X%, did while Apex slightly transportation, including Apex held rates year-over-year permanent the down these flat margins low as margins airlines, QX, out the ago, from energy, highlighting revenue back Systems, for Business Circle. were verticals, the and Consumer to Financial the resiliency the and Government EBITDA verticals structure. for placement Apex the X Health a vertical and performance branch saw growth segment Apex primarily X its of quarter. in to were year EBITDA increased industry Services, the during all while

Consulting Oxford million the X.X% and for to we consulting also business. the Importantly, through continue up year-over-year. grow combined $XX.X Apex totaled work quarter, second segments commercial our

the the single rate for strongest was being June with digits, quarter, consulting the throughout in quarter Although the revenue month bookings growth increased month. each

our continued year-over-year. pipeline consulting rates to at Additionally, work of increase the double-digit for quarter

We expect an clients of that will important remain value our provide high-end source we forward. going consulting our offering

that share SaaS cloud, the analytics, market or consulting by new more and processes next-gen finding being garnered are positioned particular. in technologies data firms are around applications for We

to the new existing offerings. Apex our consulting teams are clients to provided versed added and solutions continued the that we've Throughout in sought segment quarter, So ensure clients. these well

I As remain in previously, demand. digitization noted high projects

updated account, user the approach invoicing and client their and of for our For integration platform, features e-commerce and of business map in XXX payment a we types of road the Fortune their our cloud. we services improving which part services These streamlining are experience support digital online example, to moving systems.

cost-effective this both capabilities use by nearshore we Development work Mexican of for Our very project as resources and capitalizing Center. was the onshore our on

our current our with their on capabilities. about QX mentioned we clients market are as a of result call, discussions having I more As reshoring conditions,

or outsourcing Our Development comes of when be and newfound not Oxford Center alternative U.S. offshore many great to Apex traditional a provides near-shore feasible clients challenges. with Mexican may

Homeland remains we business basis, are trailing customer be employees ECS' simply the quarter. the due segment was backlog usual, book-to-bill a the a contracts, increased pipeline Key in a or provides significant mission-critical from On which customers architecture the solutions, second new to for growth of services the put X.Xx. federal large awarded changes higher for a by healthy cloud was XX.X% quarter, working of of development as the services not the new XXXX anticipated with applications; Less an up a the site. book-to-bill demand and under to Defense, migration architecture in the have awarded in solutions Blackstone design, million, during result specialized QX reengineering COVID-XX, Consistent the another with push of along did million professionals in achieved of government year-over-year, the progressed opportunities of in by presented of no new X and services; part ECS' would the business see segment ECS and government industry-leading material quarter modeling, and stability to or second second quarter. for business achieve government, high-end seen and XXXX, XX-month backlog request now Department of ECS continued any of other for within exception Security, continued to for the first of engineering services, reported and the Federal, Let's for of for revenue X.X:X machine in ECS, contract as the X.X:X Business Defense, up agencies. new intelligence Department expertise. civilian intelligence or policy government recompete, $XXX.X acquisitions X/X learn back on space turn first revenues and was in and including machine agencies extended. which contribution the of proposal than with federal and work coverage ratio of acquired and teleworking. ECS The volume a in from driven we $XXX.X contract high X robust, of ECS learning expansion of business X% with quarter. included number QX slowdown sector. of Department X contracts our cloud some by the Though a artificial for in data

providers sixth ECS contracts vertical part quarter, second market elite group service an addition Web the consecutive named year won year. providers In row XXX was among to the of top Managed in recognized Services Service as first a for Amazon the the managed and second of in for

segment permanent an through over $XXX.X to Oxford. comprised XX.X% engineering last for CyberCoders million consulting permanent sciences includes basis The talent reduction for Oxford life placement XXXX, offers health segment, our clients, revenues reported in This division. Turning quarter placement our consolidated revenues. now second a XX% net the commercial, and talent care, as IT, services, on-demand as year-over-year. of which on down of of X.X% decline only well

enough our capabilities. have third long-term economy, for economy. U.S. the quarterly impact continue we Pierce, reinstate quarter. that now in we are guidance Ed believe enter our of seeing, visibility quarter currently it the will the staggered our along is expectations I will we on CFO, with we of growth that remain speak the based to shortly. confident the reopening the ASGN's pandemic XXXX, As third to trends COVID-XX Nevertheless, to clear

IT We right industry, are in right the at the services time.

client of commercial and the a clients. sector large by have stability and base large work government bolstered We diverse

combined our to model, CFO, contract call I'd cost to said, now guidance our structure, provides Our our quarter in With flexible like Pierce, to Ed? third deployment stability quarter that with business. and further Ed second to the discuss a over turn further detail. performance

down accounted afternoon, better awards down the guidance in expectations ECS. down XX.X% Good everyone. for and X.X%. QX. were Revenues the commercial which in Federal was driven intelligence, the than XX.X%. than new the second largest better learning our its in for our our were was high quarter Revenues Revenues year-over-year is our divisions. are our total X.X% and financial year-over-year. other margins, in artificial high quarter. total only the potential ECS, than cash Apex outcomes in for revenues, contract the our our for lower contribution in solutions, illustrative with at and Permanent flows quarter from and expectations, were machine our XX.X%, XX.X% ECS much were we were essentially XX.X% revenues expected accounted divisions down revenues, quarter placement ECS. divisions, accounted Blackstone from from -- Ted. of things, provided commercial that were Systems, the aggregate profit, from from we growth to among gross Thanks, for generally revenues which than line operating profitability second of revenues largest decline of Gross of acquired the for internal growth total other gross lieu permanent outlined that cash which margin Revenues, Revenues division, were revenue up the XXX% for scenarios of financial by, division, margin in Revenues placement and for and the higher internal XX.X% due

margin government Although slightly lower contractors, services ECS' EBITDA consolidated is its lower gross margin than and compares favorably margin. with our other only

improvement XX end, was gross for contract of for XX.X% approximately points revenues, placement, XX.X% requirements XX.X%, cash profit, excludes as facility. there under quarter were commercial year. with The down decline the equivalents was and were a accounts Our CARES divisions. gross credit basis and divisions were margin of for and lower margin, growth lower-than-expected lower contract and was in of our reduction favorable SG&A lower XXX from and from, At expense $XXX.X variance basis gross million, of primarily a year-over-year margin in for taxes million incentive XX of up compensation XX.X% ECS capital resulted payment EBITDA from interest operating expenses receivable which to million, This gross borrowings points in in for FICA in a were those of QX was same a outstanding incentives the mainly of EBITDA our expenses. of our last was working quarter or $XXX million. illustrative margin. the Net and commensurate Act. the and profit. deferral totaled adjusted related X.X provided revenues basis for margin was margin XX%, points gross Adjusted higher-than-expected year-over-year. the basis $XX.X permanent or entertainment; $XXX.X million revenues our flows and SG&A million, days commercial on income improvement Cash lower $XXX.X the above expenses quarter, travel flows benefited contract quarter or XXX the the approximately in $XXX.X activities the midpoint million The This increase SG&A compensation, and gross stock-based and mainly among to other EBITDA; to up XX.X% DSO Cash revolving income the by and points net tied a year-over-year $XX.X things, cash revenues lower scenarios. adjusted care no result health in as expenses.

maximum A allowable X.X:X, X.XX:X. was recent below data. leverage few well of production comments Our debt senior ratio the on secured ratio

pandemic first continued we which QX, on weeks mid-March, half stable a July. as mentioned declines seeing the result revenues our second quarter. X divisions the quarter's in In weekly through remained have of we in last second commercial call, and weekly of the of the As of began through half first revenue flattened the

ECS continued period, same the grow Over digits. revenues have to at double

the trends financial significant for Ted are assumes sequentially the we're guidance revenues formal difficult we quarter single-digit the prior financial which markets division our deterioration and the our commercial providing on call Ted over our As estimates, in in achieve and to to growth mentioned, commercial flat no ECS forth of earnings set quarter. the production third release current will We that estimate COVID-XX and materials, based last to turn These the business The of estimates for serve. of remarks. due third affect the total X.X% year-over-year are X.X% assume now midpoint assumes pandemic production release. of the effects in of in quarter. COVID-XX you will the for and of growth I of the for over the be high Ted? time. estimates results Thank will quarter. worsening current the third the the trends back some any because adversely continuation year-over-year are double-digit as the date year. our remainder earnings down for should to of of down our Consequently, The supplemental your quarter year of closing comps

we as than remaining, a any Thanks, business manage we downturn of and some the improved, better enter sense of better half has in company's position an uncertainty year. is our our visibility how now other Ed. a now the in second have time ASGN to trending economic Despite our is history.

commercial solutions industries. foremost IT to our a evolve and the services consulting to provider government as of and We continue business

model remains business resilient. Our

computing unique through long-standing mobility to our will we our forward, growth organic IT client of in-demand as relationships such government maintain position, leveraging the work market commercial Going Cloud, services deploying and and our Cybersecurity our business. in

We also remain acquisition-ready.

speak have solutions to assets. may our distressed We me high-quality, You commercial M&A for add government industry-specific seek IT service does about strategy in look but heard ASGN our offerings. and spaces not before, to the

allocation, in our company time. our flow on any and M&A strong free our at of is stock depending liquidity stockholders repurchases We what interest cash maintain our or using smart will the and best capital for given generating

our continue management return second look is half as to headquarters' respective economy is of Virginia, that to changed real year, and teams. safely Systems what of in Richmond, have company labor our largest profitability in California our allows care of forward from Calabasas, of company. is strategic their our the the close address our in divisions, force our present belief that comm we against my for health to best contingent us change to to With how Even margin in ECS, leveraging the interest doing and our of officially of execute this resolved. Speaking with based Apex Virginia. brands the current be the crisis is on clients, drive corporate and and based stability it X Ultimately, will it still fast remain headquarter the made key customers, the our address rate sense well. uncertainty, located contracts, to our This we we

key to contracts it that business expand to to push growth, inorganic add will developing and opportunities clients As forward capabilities our relates our and M&A we continue pipeline.

always. your We that the our stronger I to I'd all from and Directors, mile of has you're healthy. entire positioned an ensure past for you our run remain this to your our IT emerge that quarter to all business gone priority. we even of staying hope company Board behalf top before, smoothly of and On situation safe exceptional our the for our to like ASGN our support. dedication in and and thank thank that than employees continued critical and needs note place are who we current team extra continues clients' have to We

now will Operator? up We your open to call questions. the

question our first Wells is Edward And from Instructions]. from Fargo. Caso [Operator

with Donati This and is Really margin in this revenue Justin performance particular. quarter good Ed. here on for

hear little a segments? bit wondering What little more bit seeing it Just relative are be around margin the may might be to areas QX. in looks that the It could little if Hello, weaker other a Ed, color you me? Ted give you can weaker. you are like back and bit a you on?

Ted? lose, we Did

here. I'm No,

Can us we There Okay. you hear now? go.

Have the you question? heard

the question. hear did I Yes.

here I So an I'll with Ed our things and it as we've to business mix. let X evolution have got think But elaborate on, on certainly Justin, you on. going relates us going

past so EBITDA really a of -- the margin. third. the that do their business the look the that if Apex you're on or of just quarter year, related continue think not And see a you basis, you to to secondary way quarter from at mix had cost that? last strong versus second in in relative lower And quarters going certainly to Ed, the we pace surprisingly we may through it flow business affect we on we the some the all follow-up had to want margins

Yes.

of sort the it's I about the on for focus that margin, where you actually gross out between point difference if came that basis a we range gave for we that XX the midpoint mean QX. and Justin, showing of

to and going is of grow So faster other our units a of mix. than going that because the that ECS mix-driven become is be is bigger expectation piece our lot to a

have in relates with for did as -- health anticipating or So the that's have slightly health expenses EBITDA QX. expenses that, margin, a a lower you And line to we -- margin, we're the big QX, we you bottom higher benefit that. did driver from coupled in that care it care have and

principal are reasons to the those the in why differential of as margin. seeing a you're So sort

a as follow-up That's And helpful. question. Great. just really then

you even was strong better that it double-digit do to when you returning consulting see where in growth maybe your bookings potentially the business, Given had that pre-COVID? or

that? you about do Rand, want to talk Yes.

Yes. two to this. Well, there's look, parts I think

units assume. you're we get I to close digits, Justin, and -- -- would a should is the the second certainly Circle, first this Apex bit be our to little side, of about within and Creative guess. the able we're Oxford digits, segment here, double say other half In back it's the The a sector, of in in year. I double and commercial units this talking the on commercial to more

seeing Creative translated depends it in. Circle yet, respond hasn't how and to on Oxford niches while it begins flow of stability the our So that out side, in marketing to business similar consulting the function and in some the they're we're with

So I by it watch. certainly will I would other of say Apex, we're and hope of year, But half still we're second -- part suspect parts to the I back. the be there. It's the having

appreciate and congrats again. right. Really All it,

Our Crédit next is question McVeigh from from Kevin Suisse.

buyback results. M&A frame necessarily mentioned of helpful, kind anything the sheet course what thoughts the couple any over of do strong And distressed, have you the but M&A? how depending deals. that done nice how upon balance see on and results the would us a Congratulations times. size. you to out really really Ted, folks around job transformative parameters is not the time Just be become. you a you're for have be particularly can Appreciating we that of appetite looking And given buyback, the the and given help do would the then strong

repurchase don't Kevin. Well, have necessarily look, that acquisitions think mutually exclusive. be and to Thanks, I share

I if moment the on you in think at it depends will. time,

to and out developing, pipeline that acquisitions, but of have proved that not highest not And opportunities but clients little commercial that's sheet solutions. for business build our kind We've we in as may of these smaller may of capabilities developing to hope, support and based those the we industry-specific these and because versus organic have around are the that the opportunities we Apex our quarter, that are return. kind where the this of business ECS balance over going on a We have buyback have allowed today, current our into strategy plan. in solution show For acquisition, a government on just looking space ability we always, acquisitions platform period inside space. time. of further add require we be where we that cash Naturally, that the

feel holes and certainly our in focus we're are some exist could our that and hard we pipeline. account going -- on So acquisition-ready that opportunities that's going existing have to kind We're pipeline. of today, can current as we where is we as working to portfolio fill and like fill

amongst like out an And That helps. if about you not Circle then, that you towards what I Circle just reconcile be. clients, a guess, Creative on maybe sounds maybe gaps transformation it transformation of And are it just of Creative helps. to your could little flesh bit. accelerating then you're trend kind the the strength where digital That you talked to need maybe help relative some seeing still maybe reconcile in just the Maybe digital side. it,

and opportunities offshore. that you that both the remote have saying in look, and done it's It's all commercial utilize the marketplace government if into And conversations accelerated, that. around to pushed large that for need economy, Yes. scenarios. work the I our situation I certain remote mean, of to to will, goes it was capability marketplace of has without customers, the be enhanced Well, think security the shutdown reshoring current cloud, we're able in work because started also around COVID it's the the and

would I of those you that mostly, So if say but COVID, trends, were none those been will, would things I have into just accentuated. say new coming

UI, they worried business seeing and are skill events business. turned digital easily with sets sets. clients been off have bread slow I what they're of in something their served mean Creative UX and in and think skill are things own of business buckets their around digital and marketing by more as their like have business today about X their their also you basically And If demand high go. other in clients. individually, other butter But the when you Circle It's kind traditionally they're about

all digital the the around further come it and way begin sets a their small work account that'll large and And services. on gives to skill their hone as relate itself them accounts mid-market back really focus on flush out develop the to will portfolio marketing space. opportunities upgraded go. will we meantime, the that that So In on creative here and and digital to chance and in spend

is And question Securities. our America Gary Bank next of Bisbee from from

question strength at on ECS. really guess first I impressive

past, You called the out several And can sometimes guess the I other that these when had the you things give? there first you've that. But is plus quarter anything that out acceleration there the in are some color as more in in Or supports M&A? driving but outsized the was you've acquisition any helped. meaningful it growth Was Obviously, the somewhat business software hardware of the that there? broad maybe -- and really called lumpy. contracts just

to thanks I'm Gary, to let George question. speak the this. for going Yes,

on we and George, that. go talk we'll when the higher with set for how And then your is components get top a growth performing. M&A the excited of say about to do single-digit of we're of bit just it, of that, doing you quarter? view and Although long-term want certainly complement of a high ECS kind to we rates been really little I'll about growth can, ECS growth while has the

specific. more not question. Yes, characterize in Ted. you, sure. would I And anything you, broad Thank particular, thank and Yes, anything for the Gary, it as

board we provide. their software our and it's and we solve the solutions, broader in out overall, subcontractors the We're reaching technologies across have, we customer, using strong that where in executionable approach continue have We a component problems. can a the best But subcontractors mission. been them and hardware do helping of and to difficult always and

that So looking bit more for for? color you're what little Is that provides a you. that's --

think there that But ECS. on it yes. there. you But a [Technical what's of about fall, this as you demand, you the outcomes know there's to Yes, that business, should happened on. about sort as Difficulty] there relates I how the election is your could potential we matter one And durable administration? couple sort approach what contracts think change maybe are the anything of the be of is in anything and no it follow-on change going thinking

defense, in going solutions, in. can civilian. sides sure which are over something important. not and things. the and this slide depending I several we're then on everybody cyber on aisle I'm very bodies solving we civilian way of would talk a customers' are the both the in typically, mean the difficult very, We're areas I IT some changes, we And we're overseas we're bunch that providing of administration, next It's cloud. We're And civilian whole away, challenges. lot most technical we're where the very other again, defense again, the agreed not And of some the things federal things comfortable high federal in solutions, sure. like in And Yes, but modernization, our a on spread doing federal it it's on the using in the areas between These will position of if quarters, of think operations. are very I we're that side, varied. is end about which areas. terms feel not the

in defense think the I read I folks, -- think past lot in going change next see spending least So don't we're that you at probably both the years. of several to a authorization this

okay? -- So

one any forward? I about QX. revenue in I But a but I controlled. I have we maybe you was guess the realize was, quite much margin to for on could component, costs one as how coming phasing? if SG&A think Ed. how would the revenue that do at benefit we back Apex, it the color how given quite quick the I better of someone wouldn't helpful. SG&A heard think you that key well say obviously, is -- goes, how The in And be -- just Great. think about those much some look sneak -- in

as as the But in occur see second half I phasing, sort we year. continue you're to going demand add we the go don't marketplace, headcount, to will see I costs of in relates Gary, to up. much going that the it to of headcount think clearly, to you're our change as think see

I the But that. think in variable spoken big fixed a cost, be would of But many cost so good base, we've Okay. the terms our pretty driver. nature headcount have you times of sense about of

we've the productivity, terms just add in is, feel I got only capacity forward. would Ed, push of here to Yes. it's Gary, that I like, thing that to

impression to we right, certain in in But the want accounts resources we surge. don't of some on moderate we're before we That's to are. with opportunities. where that or kind have And I a basis places you to not hiring need leave going certain so big Ed's allocate add we'll where -- some

Our next Weber question from Markets. Capital RBC is from Seth

there's trends the This and question, divergence My Seth recent these in tonight. and accounts double about is groups. production talked Emily Mclaughlin first accounts top X on and digits. retail notable low for between prepared remarks, down any Ted Wondering single growing low if digits branch

No.

if mid-market just of what have And I a -- most retail accounts. and think for couple seen call that's from here. more than if certainly, small have we that parts accounts the been been the are accounts you mean I large effective, you've about affected you economy think what us of the obviously, quarters

while rates seen. we've relatively, than of the different, different think I much so are And not growth too it's what

like terms Okay. side? And seeing were are commercial in it I smaller accounts concessions quarter, concessions. asking of you some on think the just price sounded last anything for of the

relative Just that's wondering or lessened few continued ago. to if a months

Overall, our seen want side very tick-up. remained talk commercial account Rand, the little But a stable. you specifically? about do We've on concessions contract margins have even to client

think Ted. I no, it, Well, hit you

up. Apex, in margins are gross account -- -- Our the the ticking

held and do. are have a always and a accounts a the that generally But we will thing target the we specific certain another, and can So of up on they're time, the for in for very depending looking we even of adjust importance here have one our bit. day, solidly, and in ticking margins or of what the end account short strategic there period

from question from Humphrey. SunTrust next Sommer Tobey is Robinson Our

performing over them you of why wondering could all us are color Oxford near was if kind see if businesses give converging term. the and on and the differently some Apex you at I

would tell and to size relate I Apex account. well, differences the Tobey, you, the of biggest the Oxford between two business the

but mostly So mostly XXX, mostly serving and not Oxford market Apex Fortune exclusively, middle accounts. retail -- XXXX. smaller serving

part and that's parcel of this. obviously, so And

hard-to-find serving Oxford need in And to technical Apex individual, done. biggest every help world the IT is thing is The is get second serving of talent. order their the niche work them in CIO

a in so as there's that And well. difference

drivers. say really biggest of those two I'd So the are

contribution? consulting Was slowdown? the slow. include rate an number? that that? of of for that And organic is rate growth, you Was a to acquisition the reasons projects, acquisition single-digit did drove on does the existing then of Or of kind growth slowdown what some side, speak And the that from the some Could cancellations?

you do take want Rand, that? to

Yes. start, Well, let Tobey. me

First number all in. is of all, that

them them and is we've reconfigured most support of that, of out, acquisition had. in Intersys the and and because of mostly it So don't separate pipeline Intersys, we've taken we opportunities part the

So been Apex while successful there main they them, that We've not driver. new been driving is with still but a that as very some with them it's in consulting business it's pipeline Intersys the brought revenue business, generated. at

So look one total. at as we it look,

I consulting us particularly, other growing thing not to in this you Tobey, say the was mean comps remember, if QX remember back right, business. The I year, would you, still for in end are of the strong. is And but growth bookings it it as our was last there, year-over-year. was astronomical,

think has with, this up. remarks, in the now quarter COVID-XX. slowdown affected accelerate we But very that along think are pointed of back Ted bookings, in the rate year the QX, the out strong. starting two, growth particularly as I in us bookings at obviously, our his and last And So quarter I were as one end growth year and to ended

year. slow of when last think their of of is, at Well, planning began restart budgets they got of where they're did we those on COVID-XX were. some budgets the why and companies down see began in to your budgets their beginning to end priorities bookings now slow the end scenario by in out question bit year are finishing year? to new a year little is new a So what beginning the leaves down the that the When of they're our tea the the normal slow. putting around year, and -- little to The February, place, just the I

base. think And period that I sorted the to and an acceleration bookings through client through May. over with of now things we're beginning our see they've February of

think a but at another, their or of -- affect quarter the were I somewhere factor prudent months think us and we're better I money of I knew But the that Ted along there today I play one and fourth I overplay factors sure. So want than occurred, and and some for clients couple I they're feel don't about spend did -- our are money. And had to going here redirecting the bookings where -- to slowdown line. would it ago about that I in X knew that

Markets. Jeff from BMO is Capital question next from Our Silber

philosophical have this me you let kind of been clients I question. a that wanted to ask of more question ask but me, asking

is Do So everybody workforce clients doing shift more profound as firms the see you to shift like change seeing see it. everybody that own to you to is there? outsourcing about if we remote talk you? we is a work, use remotely it, think their this Do a might opposed

work I never they're their them driver that it. behind like the in need allow the using open you remotely. to workforce the Well, internal firms be certainly, certain is But circumstances. more right at No. to all right think mean, I have to when going look, with you I'm will time own sure really, us we talent

at right time, set, even us. will, price as their look demand the and them which to beyond or And the think of having And a in this, many us, helps services. going allow for equation again, is which you that our be in someone open open-minded think more I demand certain this. support that in I us, helps kind solutions. different for if the sitting country X walls, be or talent of So get to ways, they're skill of of different open better clients either geographies will going for to most supporter to some of And points more look are will to at use all to within turn,

staff as will, working So to I their the that impact, remotely it the if internal you believe going to an necessarily services really is don't really have we for on demand provide. equation relates

helpful. That's that. appreciate I Okay.

you business. has You on perspective seeing but wage pressure of mentioned assignment labor inflation pricing, times going to do I'm from Are any given specifically and your in focused less lot it I the with what's a on know mix, markets? a

that's pricing the think know still they're were the I have they will forward, scenario, they're that mean only but demand high-end the in it. good all that to around wage group -- going and not I for you skill was Yes. Look, -- necessarily demand, scenario And that I sets, in so that the and IT think stability not furloughed. pricing

from is Mark Marcon question from next our And Baird.

this about Just you're add me how kind whether going Can or the half back we are look out Or whether you back my should end the Let what or not that about quarter little sequentially? and with that Apex how performance of bit this for seeing -- and of as expect the -- of think even consulting? towards here. a to you bookings we those year, specifically talk coming this Systems to that? congrats grow on would regards

Sure.

it a speak Rand where information about So sense give the that it out Mark, I'll but we qualitatively underneath quantitatively, let you give don't segment is. of and

Mark, I Well, respond listen, I guess Okay. ways. have to two

Now first, consulting a by the revenue first account. function, all, flow and are bookings of

gas, consulting in we're business, not and seeing as staffing we're not the it like retail definitely accounts okay, transportation and and world. seeing airlines, in some same the So oil

an So impact there is in terms we're here of industry-specific where seeing consulting.

more, and that a even areas more on. up on business government in side pick in the management, little have initiatives little are consulting where bit bit particularly to service bank in up banks, picking wealth and health there in we a Now going is starting side, the care, fintech regional

bookings So industry push. that industry bit bit our a little of it's reflective when you of and what's look happening at revenue, a in little it segment, by reflective

or that all what work about map, all call to involved and work of remarks. linking whether are businesses, in development logistics of your put processing, the getting cloud. into they In terms are linking It's with web more similar in. the Ted the I really linking -- -- we queuing, what you're systems really web. kind showed mandates web the It's digitization in that its asking think -- what question to order digital logistics your of I are road paying, logistics the around billing of It's out

that So better and side, to about, think which I information from still we're work. talks of how that base, on marketing everybody customer kind to of demand but yet in the I to learning come talk innings early use think your excite the is

digitization with around the So own workforce efficiently. really things suppliers the and it's customers linking your the of to do better, business with more faster,

the talk stabilization there and Or commercial bit change You Terrific. trends is verticals? continued lines, I the we how if longer-term industry second are also consumer industry like should side, terms what further? the by And to across Can And quarter, the actually seeing, implications? that some along half there are mentioned bit Or think Rand. various then little you that, across are verticals? sequentially? about a the relatively grow that that of then you're in appreciate those and little of both a in that things that? discontinuing even uniform about a through July. the some that softening that industrials, might stabilized Is be

Ted, you and want Well, me do go ahead respond? to

Please.

Mark. I we're I lot a Yes. There's against industries. mean reporting there, X not --

units commercial -- industries. course, business we're managing these of really XX business -- roll X that Of to segments our I'm into inside

segments. think a different we industries say I X question would So strength you're asking -- in saw some across I our

higher In retail, much big the hospitality, the bit. I is energy, gov, but was business, and local, a In That it work just little tobacco, in consumer doing it's mentioning, with airline, we're in ebbs and fintech, logistics banks, small wealth so and management, less services, it industrials, flows As not, or than stronger. financial ed, with not state large it's in specialty little a are with it's maybe less insurance, chemicals, believe gas integrators. e-commerce, and okay? a

they've coming little for technology, last been in Diversified On the some virus. now. care, we bit, our little clients hanging sure little the few is are technology that fighting big business not Our back footprint and there. coming over but and the players the strong so been a health as still big quarters bit media, bit. a small business a and Payers, have In wireless relatively telco telco right back down providers of weak like is good, but strong. it's busy

that these our could in certain back of help, that just go are more shift, not definitely and assignment segments there or yet. through seeing it's So I consulting some that this revenue, it's Did about have are up up industry our And strength, or so really when are Mark? but much some different in still running. in we're talk quick not coming -- stability from and shifts industry still industries the industries we detail,

bit the know half weeks. around any of back I in of doubts this in out virus, that? clients are with have like for they're imperative color. But regards towards things like any towards of that going than looking we're more sounds transformation, that's are recent Or little And Yes. three towards resurgence the you -- digital of where then any just the to from appreciate of I to a the terms sort the more last tone year, strategic there of conservative stable overriding be been back end? because sort the hearing

you will George and go... don't Rand, why comment then

we would -- but not the we're go, as side hearing is digital the steady I Yes. steady, think say emphasis. I we're hearing

going steady to be Okay? them, George? okay? positioned continue And or inch with to if up, continue we're we're on then side that to

And George, upside?

on us upsurge in impact to not the No, seeing Yes. any we're things.

technologies the our in and modernization having customers being things remotely. provide do Rand continue to solutions as on do that. focus to digital us Our able And the said,

great customers. continue solutions So provide really we to hire people the good and to

in you types among are what seeing at? then multiples And select companies of typically would terms look Great. the good, of you acquisition that

of Mark, So -- not acquisition has slowed debt I pace acquisition down. side, on the think

really So seen there. we've no change

of On things just have because there the private of transactions. and the around been a credit you, equity mostly and what side, of haven't commercial stall lot

really -- to flush here difficult that out as we'll will we itself go. discern but So that,

Great, and congrats.

session, call remarks. Tim I will for of We to over the have Hanson, reached closing the to question-and-answer and now end Ted turn CEO, the --

you. you stay look and our safe, we with evening. forward us with this Great. Well, being afternoon, call. speaking healthy, to third And quarter Thank that we you thank stay on wish you this for

This disconnect concludes Thank today's conference, for at and your this lines may you time. you participation. your