ASGN (ASGN) 26 Apr 232023 Q1 Earnings call transcript

Greetings, and welcome to the ASGN Incorporated First Quarter 2023 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Kimberly Esterkin, Investor Relations. Thank you, Kimberly.

You may begin.

operator. you, Thank thank first and joining today us Good conference you call. ASGN's quarter for afternoon for With Ted and Marie me Blazer, Perry, Rand are Chief Hanson, Chief Financial Officer. Officer; Executive President;

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

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

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

the turn call to Chief Executive Ted now Officer. will I Hanson, over

the or of and work, surpassed revenues quarter. government XX.X% federal the of the quarter year areas execute Thank in quarter XXXX prior commercial X.X% as to and to ASGN's the prior at revenues, IT joining first the you, call. ASGN's Continuing core of year period. thank Kimberly, earnings $XXX.X revenues mark both the in business, XXXX improved revenues you XX.X% for million of strategic for quarter our including solidly first consulting XX% compared first compared to

federal Fortune light work decision our on double strong high-end, higher-value and growth to in for of conditions, macro reconfirms of government strategic The business, this down consulting XXXX clients. particularly

successfully this execute have right plan. to in group of long-term against the place We professionals

nature, government this contrast for to in work, all in commercial consulting the growth efforts past We In federal forward. And and our more ASGN to of discretionary assignment that our some team your business I want cyclical revenue strategy of quarter this guidance. are namely the declined. in our of areas for thank pushing and programmed

However, our double this margin. the XX.X% quarter, was EBITDA had digits. quarter Nevertheless, end impacted remained for and the the negatively initially margins we which toward decline anticipated, adjusted the lowest, the at greater seasonally the solidly is adjusted EBITDA of in first than

Importantly, toward our improve profile long-term further on of not business and based over consultative margin adjusted EBITDA our a has move changed expected is time more the model. to

the in market digital on permanent taking seen proactively the marketing still and believe the macro business a ASGN's our by today investing margins others. changed. use and actions that from into in DSO while benefited Also, In rallies in a an once the has our on highest conditions, leveraging In capital Those exits and We EBITDA variable future. creative followed are remains not X.X strategy we meantime, cash conditions best of cost by flow given historically addition, structure in indicator our a placement capital. and expenses adjusted receivable return certain sustained while free economy have period. allocation downside; areas uptick days. are the leading down the accounts revenue recessionary of M&A reduction as improve protecting

of price. share in we our repurchasing view limited ASGN the said compelling pipeline rather present, shares at given with more expect the Having be to that, in deals active

discuss background, let new Board that us as recently Our our a authorization. of million for approved has $XXX the repurchase quarter. performance segment the share Directors With X-year

of XXXX period Commercial division, the our with Apex is for tough revenue reported the accounted Systems, Fortune which serves largest companies Our year consistent and prior revenues. comparison. double-digit segment, predominantly XXXX large a XX.X% quarter on enterprises year-over-year Commercial relatively segment first

X.X% which the growth improved XX.X% and growth year-over-year. division placement accounts for digital Creative of digits and revenues, high achieving with marketing the single-digit permanent low represent quarter, declined top retail for achieving Commercial accounts single-digit Revenues revenues year-over-year. double segment

client side. industry and Our protection provides diversified base the to commercial balance large enterprise

TMT even consumer our discretionary of single progress high revenues see single-digit the health out verticals segment pullback of XXXX. businesses, commercial the services our revenue and quarter Financial industry The Telecom in and solid in improved saw such, we As more and to verticals growth year-over-year, quarter. services Technology, with mid-single digits. the government X verticals first compared both to or while of vertical X and digits business Media continue care in declined and industrial

layoffs. health growth consumer management. in while and saw in by was Financial largely industrial impact growth was revenues Services by driven care wealth accounts the of TMT driven technology a principally In led pullback utility was provider and strength vertical, the staples. accounts, our and In vertical growth Improvement work delays telecommunications consumer in in energy, and by with

growth and accounts the quarter, we solid government revenue services. business double-digit business aerospace during a in and defense pullback services, saw In saw while

consulting our to Turning business.

clients Our we part of the and consulting provide an source of core our offerings important strategic a value remain growth strategy.

XX.X% strong Commercial invest quarter, in a roughly that XX% of our is X.X:X XX-month trailing revenues were This increased Consulting year-over-year XX.X% organically. and continue Bookings bookings, on quarter translates for totaled were evident projects. such into $XXX With million, record it up approximately a first the and year-over-year. IT consulting clients the book-to-bill basis. up a For to

favored seen customer trends these focus space relationship discretionary have their our leverage we projects, our clients and are such our a our long-standing in consulting our to aimed they of while of as by and deemphasize expansive our reprioritizing solutions unique delivery portfolio some able model. modernizing been and result as other smaller areas clients work the at to improving fact, experiences. In remain has systems ASGN

on examples our automating Systems was services client the the quarter. which in development and to So digitizing, table supply the our ServiceNow partnership secure its chain Apex Apex contract the client GlideFast, wins client QX, also our is to brought This platform in new global to and of the This just tasked ServiceNow quarter Consulting the awarded company. Commercial with provide GlideFast let same with some of provide a me In in for optimizing unit a X jointly contract. first the and trip processes. relationship wins capabilities the to XX new team order during automotive

are uses provider during health a an take the to quarter, when U.S. of with an care contract Also alert first we care intelligence detect the deploy health that and review the risk help won puts reaction. patient appropriate to application artificial then a the to patients them action send leading the at performing to and falling that provider

project of number by application developed the safely the of is to an goal leveraging can and the increase Systems application. The AI Apex rooms remotely monitor

federal which provides Department Defense, government to the our now Let's of turn mission-critical community and intelligence the segment, solutions agencies. federal to civilian

by XX% segment's and at quarter healthy XXXX, of first of to up over Contract quarter $X backlog end the driven Irvine of organic Federal segment growth the XX-month first trailing revenues the combination the the impact billion ratio was X.Xx the coverage compared for of a a of were revenues. quarter our recent acquisition. or

months for book-to-bill of basis. $XX.X awards quarter a million, on XX translates to New trailing X.X:X a approximately contract which were the

for cycles We an multiphase lag are our the due to our is government in seeing tends of of submitted procurement That to award as funding new cycle government and the increase remains as opportunities it's pipeline in awaiting delays is federal the and on robust largely projects behind budget as said, ever been. seasonally cycle. award number high acquisition also QX protest. segment project low often

a turn let's In some team won secured to So projects new quarter. examples during won and the of of contract awards. number first recompetes quarter, our the

In supporting recompete, terms delivery, the as in Service DevSecOps DHS Security, again are cloud enhancements. of of Management which a we with enterprise the Web secured and ECS platform contract Homeland Department Content content

modernization Army's Pay client making With our entire support and its prime awards priority quarter, the transformation the Army's also regards ECS at is X to which to progress, and to across base. and new new the has opportunities ECS is contract capabilities won pursue great a agile system, cybersecurity IT Integrated Personnel of present number during leveraged the

Corporation For has to infrastructure investments and that example, continued, quarter, already momentum solutions report several a to Ironvine in-country first has the the installing support in contract designing, pleased and Millennium ECS won This in QX. bookings in. track seen with new under I'm Challenge ECS to building early

of million perform For $XXX technology won to global recompete a long-standing over delivery addressing in geospatial example, solutions and shipping mail we recently advanced for our customer.

results that, to now XXXX the call the to our our With quarter and first quarter second guidance. CFO, turn over discuss Marie, I'll

basis. Thanks, everyone an first quarter the again Ted. $X.X on X.X% great with today. to up Revenues year-over-year were for as-reported billion, It's speak

compared X.X% Excluding from revenues prior businesses year quarter. in months, down million XX the $XX.X past to the acquired were

tend funding each their into XX% results perspective. tough as first I'd first standpoint, a the be XXXX, to achieved comparison. put like in of on a revenue we quarter first revenue basis, of creating year year revenues year-over-year of quarter Also, the the clients many growth quarter over to finalize budgets. a the consolidated From project seasonality in lighter calendar calendar year-over-year

end our guidance revenue due discretionary towards to our cyclical noted, work. to of mainly guidance due as our While we further range, QX the anticipate some more quarter and softness conditions, Ted declines we assignment in below macroeconomic the and fell

up largest high-margin streams, on Commercial million, basis Revenues revenue as-reported our year-over-year. XX.X% from from million, and totaled Revenues were $XXX.X down our Commercial essentially an year-over-year organically. flat the $XXX.X segment X.X% Consulting, of

the million, segment million Consulting $XXX.X revenue our contribution $XX.X were improved XX% government Excluding year-over-year. from year-over-year. up Services from XX% GlideFast, federal Revenues

$XX.X segment Excluding the contribution from Ironvine revenues the increased for million, of X.X%.

points first quarter basis, to basis year. margins. a gross down XX.X%, on consolidated the On of over margin Moving XXX last was

than mix from segment for government perm due contracts Gross The mainly to XX marketing commercial federal segment revenues, assignment which basis a margin reimbursable the basis compression Ironvine. slightly contribution creative points revenues points our the gross gross our related in a lower mix, cyclical have revenues XXX down smaller mix margins. carry margin higher which gross a XX.X%, margin of higher digital year-over-year, from of and from revenues gross cost and segment, year-over-year federal contribution smaller primarily noted. was including for placement to margin Commercial up the and due amount business lower XX.X%, and contrast, was By government a a as discretionary to was of

SG&A million expenses first the of nature workforce and attrition in strategic in our X.X% which business. $XXX.X made for expenses year-over-year were guidance favorable the incentive from fluctuations due benefited our in due technology million, XXXX. include we expenses SG&A structure, $X.X from herbal investments expenses not highly to in guidance SG&A to cost also were our in to that estimates. and up quarter compensation included and do in integration acquisition, our planning

rates, increased interest only As related rising portion which a year-over-year to expected, interest debt. our impact of expense

rates. over of reminder, half fixed is a at market debt As our below

acquisitions. recent was $XX.X and from $XXX.X to adjusted due higher million, was assets Income continuing margin intangible EBITDA was of was Amortization EBITDA million. Adjusted operations XX.X%.

Our what X creative margin quarter. placement the EBITDA our to permanent guided originally revenues highest digital had we margin marketing for and contributors, pressure adjusted compared

At quarter, cash Free under flow the the and end of of equivalents senior improvement million quarter million, first and the $XX were we revolver. million, $XX.X XX.X% of our had an the totaled $XXX XXXX. full secured availability for quarter cash over cash

receivable, As accounts improving free flow in under Ted the and full cash strategic mentioned, With cash strong days. powder by have to acquisitions. flows we generation benefited revolver, ample DSO X.X dry a availability reduction from make thereby

shares opportunities Directors stock stock XXX,XXX the $XX.X million new approved of million first This at common repurchase quarter. at of $XXX week, Board a share such limited acquisition plan authorization. cash the on the prior the our we attractive repurchase X-year deployed during and replacing company's the our in levels, of trading Given present,

guidance. our to Turning

sequentially set April; and release Our forth essentially the in financial based estimated estimates quarter, our These trends assumes for year-ago in XXXX from same XX.XX the revenue days million are $XX.X supplemental earnings XX second months. contribution and the in the the of March second the and as on last which billable are quarter estimates in acquisitions include made period materials. of is and

in we similar that mind, than in present. be assignment first of prior to to uncertain wider macro with at quarter macro second conditions for are conditions to in quarter the With this revenues. that We the account continued expect softness providing in quarters ranges

a from seasonality the should lowest increase sequentially. standpoint, of in the revenue Given our business being QX revenue

creative federal continued in expect permanent our offset set revenues peer We growth, staffing, quarter extent, and with and digital IT by a be lower decline second to consulting and commercial by driven softness marketing. consistent in placement to revenue

well and as long-term faced had year-over-year in these certain also hampering without our containment XXXX. as cost the XX% another over our tax on We assumptions structure We pressure margins guidance we reset downward leverage from our drivers. lapping efforts limit the growth have in difficult quarter comparison In cost numbers, payroll second assumed that growth of variable of the -- QX.

With to are plus of we results. that on translates difficult against billion billable and This growth X.X% background, year billion roughly quarter, same a rate comparable. $X.XX for to $X.XXX the the number prior revenues estimating second compared days to year-over-year minus of at the X.X% quarter's to a year-over-year

$XX.X We million. to of $XXX million $XX million are income $XXX to estimating adjusted million net of EBITDA and

discretionary other cost control from also cost should measures, EBITDA the We are federal margin but to primarily due the are attrition similar limitations Along trends, headcount in margins expecting work. greater with in a commensurate our softness variable government mix year-over-year, gross assignment continued decline benefit more mix, to work as anticipated will revenue. decline recent such year-over-year, of spending. and business to structure with and Adjusted including

Thank you.

the Ted Now, I'll over some call for turn remarks. to closing

macroeconomic peers, did economic These difficult throughout our in just our and more Marie. outside our conditions to In areas our business which ability position control quarter, strategically cycles. are first to business. succeed Thanks, cyclical the control, that. in performance discretionary we are execute our of is impacting our our of Like conditions the the is

We model. our more continue business consultative to evolve towards a

the long XX% in While to are higher our the clients are critical With for are businesses. revenues invest and term. scrutinizing IT IT we of success in end, and consulting for that over spend, value work they're higher shaping in their continuing evolving operations both our short projects

of number place downside. on providing in to leading a remain the services support stabilizers the end we to markets we and to business committed have solutions business government key our Importantly, and We commercial serve.

quarter you Thank all call. our first joining for

your it open to Operator? now questions. will We up

next [Operator Nolan Our Maggie question Instructions] is with from William Blair.

see the work. cross to IT XX% interesting that consulting revenue guys mark of Really you on

quarter. as you've I it clients the around finalize budgets year the So they know of congratulations in on is of as kind My question that from mentioned sentiment. kind getting projections? to first first process that. their full clients to kind your feedback you are finalize spend of relates tend client kind of that What

put let there to they're I start, based going overall you here same and that you on that with see, But think, of the staffing with posturing they that cautious. based part invested points can consulting on, finger the I'll do on Maggie, on and The only work. clients time, are in and this get in staffing kind but they hop their and are Rand in to business, the are me the as moderate Yes. I'll look, strategic data programs one. will, drivers. on continue first At future also not our of uncertainty. if just IT new in that stay on are can business, And key spend that they projects going projects continue business adding protective,

the areas and for in they're that also business business They're So to of places in are I they're of they money very critical are where the invest being think continuing wary. IT. the -- clients just saving can,

story, get certain into. Now underneath high there's can level, would add cautiousness base. the some to client sure which think there's But within industry-by-industry overall, I at that, Rand, for we you a anything that? a

Ted Ted you which we're No, forward. staffing the right. on We're you think we're consulting is numbers, think, progress with, thinking and going rep back to made put pull if in their watching clients the in on, still we've easier on what's said, the the absolutely and pleased will. programs, I very everything. obviously, world, But numbers. finger And I watching their Maggie, consulting bookings hit are

is But here. spend. obviously are being on probably others industries than cautiousness aggressive more word an operative their Some IT

then evaluating continue and are to for those Marie given it. back it can What I think think And the Got you areas, talking some invest investment that of about your expenses growth? will you your was some where balancing areas cut where key future with conditions. you versus of market

areas those really some our of spend. of of discretionary the some component Maggie, is

we travel, that. so like And are items tight sure making on

attrition We built model. just also have our into

see so as play coming that And well. to we

to believe over variable of attrition combination that addition the cost we the in have, -- with rightsizing we the the some those of then that's And structure happening control with spend. discretionary the that and along so

categories. X There's

productive if commercial think a about and X consulting. will, good piece, staffing in think, obviously, placement. That's the encompasses Maggie, If marketplace. attrition permanent business buckets, you of digital, -- creative in you seeing in natural you our we're where if which IT our There's most and

also, investing side, And and the area working. that. there We're we're invested around a from so staying And being on productive attacking tell you invested wins that's federal right it's and then now. We're there that that our growing. can

so think And and inside segments Marie the the a those of business, just level, I areas plus minuses. kind high and are our all at of captured the

last add being banks can quick IT around information needs but first much, and be the up if out that real you sector, Maggie, I quarter both the just not the about spender activity quarter, amount because compliance of quite talked remember picking to a so in in banks. other proved of regional is in big good and because we

to a therefore, see So that we'll hopeful and we're we're maybe deploying resurgence, that.

seen is what obviously You the bookings quarter, has like? had evolved a changes the cycle wondering over Consulting first year? the X how it of the sales of good Commercial -- On I'm but year-to-date? course perceived the if area, you've months any And look

you that? do Rand, want to take

And XXXX technologies path they changes. can introduction changed. path that that like really there's and/or improve of most some wouldn't path, IT -- have experience. much productivity of the say I things companies Yes. the Fortune or modernization ourselves I mean, customer an hasn't workforce

to -- efficient, be give those past what point, and and them we them get there clients can there on around at with discussions still price you the the have quality we projects the right take I help think if will. so are

our also back -- is growing. So pipeline

so And out Ted slower. question, this, bit that pointed than already want this again, some And think where I to they just no little they're there industries, are alluded more definitely a a to slow cautious Tobey. be we little

part, new the discussions they new but there's the cloud get board. So started arms right discussions But services are things pretty MEGI There elongate by like good pretty in sales bore something may with weeks and away. things seen process full good some and there's most their monitor the to not get for go have may compliance across I or success are they areas and some that around end, mentioned along just new because ongoing. to things the requirements, other now do the migrations financial their that we've

perspective, folks staffing rate say out volumetric to weekly you hours, another how assignment either growth you that where on a bill would whichever X compare from And the or to now? And you is does choose? have want

the Well, higher as rate we're business value to is Yes. bill mix in would better getting EBITDA it's naturally have say I getting engagement, We're higher also of growth in right? rates, We're rates, just proposition customer. we margins. happening consultative-type higher growth -- higher and a the a

business, of that And demand. steady. they're to the that rate set number and that. labor the continue any not pool think factor. pretty around underneath we tightness in X kind up. spreads The across We're still mission-critical to in X of are set the the naturally remaining So that skill IT continued seeing degradation speaks I That's is see pay-to-bill number probably the bill go factor

points that. are around X So data those

is the and I guess the overwhelmed being just declines. by fair kind in still rate bill exists in that that on to based of it of it growth commentary, assume business sort volume staffing So is

it still it for as as so not not bill wage as -- steep was. It's there as sure. inflation, was, It's growth steep is rate

saw the at So level we're we past. declines going a the in business. those staffing lesser up than are And certainly, part the of having volume that what in

could? the where they know if And and Okay. is can contrast describe us historically, also you creative you and could perm sense rationalize maybe the where that, compare you now I range in but give digital? for too, a come margins in and it down, is

that EBITDA was permanent is X% close is say Cree Well, placement us, X% they Riley, than And consistent kind high, now. number margins, mid- normal our of around are to of Circle in to Creative At overall X.X% at teens range of pretty for years. higher and will. right company the it business level Circle to would and I a Sure. high Matt from over margins been a well-managed have its if X% kind by you

Bank with Our next question comes from of Heather Balsky America.

in little kind that the deceleration, ask, of you can of in off, your when the factoring assuming and you guide And you impacted? from to what are March quarter the kind more of of you a towards a quarter the in first terms end level for I most April? the you second steady you of think slowdown deceleration? further business of about the saw dig were areas state in kind what of staffing bit Or are saw

So of couple things maybe a here.

slight the I the you instead the notch X/X in that's a that's of quarter, pretty up, notch the typically coming seeing think about to business, projects track thing And year. in the really just February What we was certainly into I is about back if her normal and we say that And Marie that's that mentioned December I'd New of unique think and way commentary, another think into and end see And us January, took coming into down. end from saw this unexpected. projects of new down. was the starting, in a are natural across we begin of would Year, difference.

we've seen weeks pretty I'll the in last, what a to is steadiness. good say, Now X what X

side consulting down obviously, the still little up business on bit. So of In you're staffing the and the business. of you're part the a

have trend of offsetting X last that continued And here much the for to pretty X so they kind weeks.

quarter. first the that's So

seconds March quarter, and think I similar that second flatishness And really guidance ago. few a predicated the were mentioned think seen in Marie's we that about gave that's you I April. that a the comments If trend we've to the what

bit that that's the And is so a for the gave downside. we've And we that in side, get bands in can to the the weaker. conservatism some predicated little staffing to and you EBITDA guidance the that the especially revenue built see where potentially both really on

what get, quarter. to see, into have that's what X we'll here see we'll weeks but So just we and the watch

AI And in topical. and helpful. AI of now just then gears. on some or hurt news That's potentially the gotten being very your And how with switching of business. helps just curious We've right rise questions thoughts could kind your the

I on that think here there through opportunities shrink. roles. for of flip then sort AI-type the there's case, And we've out heard the both tech side, risk jobs is there of number

curious get Just to your thoughts.

Yes.

productivity way clients But operate to is had then see them in next here. I things the say the on terms inside will. start is, be that over or the for is the automation if solve I'll either we but of wave that? a going It's of lot and and is no providing do things to the along business a there. problems it to and Rand, certainly remain think of your I as a in that increase opportunities you to the I'll serve So around and else him. there's continuing let push productivity of to business, business, solution to our clients. Rand of what certain real opportunity AI is are of would we arms side our often, see you kind I early way to mean driver, a we what going new there question IT in make something how talent terms helping and that digitization, work turn to for all going execute be this to the can add come A it of driver. us so really this for, the this on, you difference this. one of too already early get one our that But

Well, side. the We featured key you as of with is Ted let's our with client, way, this what past, some of everything by great. care with of we the some with obviously need we machine But along that it have forward, the work -- in doing federal health call structure. and remember a and driver of in said listen, was IT the earnings going spend learning. that and Department the AI remember data let's we're Defense good a featured see But

a need AI. in do data good cloud and You structure to order

of giants is And that's to big harness so from see tech -- what forward, is cloud moving data. still because you've you some work other the got

You've got to be simulate, data, do. of be it in is analysis to things to you've and cloud -- able and data the track able a got a to both trends to set which

to groundwork of lot machine just a there's learning. really to AI to and So not doing of be AI make technology work, mention the

of that's So think in why areas. growing lot I you see still a is those

from with comes Jeff next question Our Capital BMO Silber Markets.

on Ryan [ph] for Jeff.

And digital was spoken just that Just factors about headlines a previously? quick the impacting question. transformation impact you've I wondering how business? those spend. your those are We've seen some surrounding declines IT in initiative

want take you do that? to Rand,

me Let start.

all, in of there's for First decline Jeff, say sure. IT a would staffing I expenditures

specifically In slowdown a Ted start we that's it finger the in it earlier, seen pointed clients, in hours, make And out even clients, because, stop leverage or not as consulting, not okay? days, it and on can Okay? that or put consulting XXXX up. their it in spend and have projects Fortune that

whether you I in that in Why spending, somebody guess part hire on corporate your I time but your point the this go placement is piece. at would And that. part But come in So just perm would staffing clarify cycle. not IT said. was was also that ahead, they're you back what... of as second Jeff, the question second will staff economic the eventually

on transportation. that just was the digital, to It how digital relates

Yes.

embedded for new learning technology. and machine work look, and company, doing We clients. media of and a recently call press. the cloud transformation piece work just telecommunications and I mentioned is big just digital using we're for signed AI infrastructure is But transformation, still a what in digital everybody's ServiceNow data the think is what that. I I company on analysis The part of the with building mind a

growing. is business GlideFast Our

and earlier their growing. backlog that mentioned Ted think bookings I are and

in still there's a our initiatives the some transformation involved interest are So digital of clients of with. lot

Those a it still They slower if Ted will, already have goes go the to period, little I think they're started. earlier. going. made that but at small you may comment them they are a for of may, things some

Ryan, Yes. to add more that. thing in Ryan, I would just X

look our having the productive, the right? initiatives really we being all their security. our we doing we're And in having clients and strategic gas. we things business, mean do, off can't analysis, more REIT view I the cloud, customers, so take be I better like in that foot think just as the it about IT better as these data at are

going get. talk I a they because when in right? at initiative just look strategic of different are it a helping point. our may And being them, they're cost in the we fact, our IT discretionary cautious do think of to let know digital or some What or in it's what this. And all much in we map. view than investments so certain marketing of Rand's a that's there's fall headcount travel most feel are other little levels clients areas is of move used center, some our the pathway business, bit have now inside spend that to stick you. road whether saying, Yes, to we or do But IT our spend be projects I with well, to best we're what like us so And I down to while so

all X some keep bought to flow. of We us None over the laptops, will years. do ebb laptops. things moving us but into many don't get so need our customers and the to for business get on them that yes, keep productive services. them we and need and them secure the more We to applications our our these need our to are in in serve initiatives And last couple reach spending make to them cloud right

that's see it. anyway, So of kind we how

is systems service areas, or consulting If pyramid areas be the And trends your those, weakness this there deployments coincidentally the then, may of just see implementation be of in see Or the to the top when of some in so lag market? Consulting some you if X some work were a of follow-up. business, consulting those there centers? some architecture, between you

softer. is consulting we play our longer that's part, but design likely, is work, IT with management This certainly, strong. still spend and Rand, architecture the be area for best of which the predabated be went execution on should pretty an Well, where maybe around the

with next question comes Jeffries. Thind from Our Surinder

they're months Ted, think had XX just a it talk the was pullback were positions is clients their we about next and at terms How and delaying -- maybe ultimately, off of in of earlier company the those pipeline, pulling on should that open point? that about to point, follow saw over in in pushed that those terms was that's in staffing up the Can there think this having they've staffing kind color business. the put in of in to tending on of what that projects on XQ anticipated the that mix in what occurring terms of that of the in that were but we what kind projects at Or here kind about this. you XQ filling, weakness to sense the And positions. to you about the removed of the X projects? ends of way is trying longer-term risk of this to come back kind people terms the it are transition be

to you do Rand, that? want take

the deploying a world through to The Where let people. account not the Serrano, is they're it's me on respond they have is. we means you the the would our to where some but of hiring electronic media is is, don't a in. always sense, little a have and managers Ted, people these to Do electronic not published the you're what Well, them answer you're then staffing I for an have you us. project sense puts projects, BMS and -- invisible people. can a where you you're company through start them. the you, first requisitions, project extent, jump they requisitions hiring to though, say side, thing It's when know

just new it's or a because rotating they you start when it's up. a they're that, a pause do just Now think that I I person And they XX are the programs. visibility XX in people That's a didn't control why having full question top back ago, staffing these and said think that of when all programs. years organization, -- remember, they didn't ago, have down from -- measure. cost they years with really that companies the they the have taking in

There the from that flow. was action lower consulting to term. electronic, move the a along service it's But benefited they I this sense center. at going it the having in the a decide and They've think goes. us that is staffing is for more what and of as productivity lot they that, we that control talk put you of you or can they just you answer that answer. made forward. a think the backlog of your hiring to long-term people. for an team costs, and through a some all centers, example. service a level that of in least have where to I gap responded themselves. really while using oriented, see run general a consulting of just But short independent it's transactional short-term not continue said which They've for in can't revenues they limp one-off program great in of I'm our know It's to, programs bridge is Unless which up coming project example, until there's way on that because place. If

And stage, we it How you follow-on design helpful. issue? valuation a the for this by given is here? about part think then can of that deal at Marie, maybe pipeline, color talk Is the the should about as commentary? around a That's limited that M&A

around perspective, I to an point that proposition. to our Well, I deal, that mean, find value M&A from it's right mean, your meets really trying

that said we've that So or use of and use. is the first capital M&A best

where are let me Surinder, But X you more thing. we add know

there opportunistic, during share to it's the we we've what authorization new which wasn't to quarter, And as front turn authors free flow go repurchases, with right obviously, said with, next here that continue would of share and so us, repurchase intend then think cash if and forward. always we the in I here last continued the opportunity right? we've done

look, certain commercial in list find fit defined, our properties to we shopping that So would both that we still love and have GOV.

really into because various not sell just business the or marketplace buyer now to today question evaluation last targets is that and the what a a think there's part the and one good of willing valuation; nothing be. We willing point, where of not slower was and she your -- seller the still continue It's -- kind a to perceives to not to the pay lip a doesn't of at talk about perceives your they're I to discovery is he multiple of stop. cup. your To

of normal And little so little and until a a financing bit at on markets a I can would And head, bit the you've that are in going working still. way in say. flow that got stalemate We're lagger deal capital a of markets the made. a discovery of amount supports be a equity

Our next Baird. question with comes from Mark Marcon

Mark. on [ph] Andre is This

leverage up And feel Can the just your on first debt follow the opportunity right how my one. your environment? last you if did are up about increasing will in come levels? what this on current thoughts question about So you speak

Sure.

we've But And times. the are and business believe, we've times, and think, these we're a free Andre. done that. We've flow margin X, marketplace. of that if $X.X X.Xx basis, a characteristics about when levered, up about question, acquisition. to very on will, good said you kind on in there basis, cash X I under opportunities make great still to about it's mean we're total larger million different that we're below normal support the if where to In than senior occasions, always normal leverage I certainly leveraged modestly leveraged, X.X, going M&A less So the under I secured of X.X%. X%, are

and obviously, But we with think we're that powder. the market. uncertainty leverage so So in dry how much have wary about about we

cash We free have flow.

it. about We ago, right so increased have have it. doesn't M&A opportunity that could We outstanding on along, $XXX million it we that anything purposefully of take quarters came revolver advantage if X the

us little won't we're leverage some So say Xx see I in and to certainty take bit willing but you a for would market. at the metrics thing, X.Xx have up right we on until the leverage of

very or on my procurement helpful how be, about that's any the bit provide cycles operations Could a more some you spoke you could And side? that? go-to-market will new the Great, initial thoughts side. And little on the strategy color. federal follow-up multiphase that on on impact federal then color

slowing on customer on just were get awards get can has where protest RFP then There's a all together over get gyrations efficient. and protests on. just right that and put on and a to an the craziness. another award. to to And end going Still more adjudicate taken finally world the it's lot they make of from the big, going naturally used cycling that, down be it on then is And that the quite of multilayered it, like Yes. respond to back world they whole procurement you to federal of a to working There's to how is still within to It level the in were all were to to the should. hung of going to is more be protest. something afraid making has very or in protest it about to the at your of award. lot down final and COVID, just situation to street government they a telling wheel get nobody certain because procurement careful adjudicated terms a basically government. adjudicated RFPs not to you But wrong The looked today, firms

made. that's like the the an seems is minute first It award response,

a seeing after the bid. is criteria together the protests that you contract them front for on So when out put seeing the customer only don't with end are awards putting end now back government -- they firms how are you're made, on and when agree the

down So quite on in it's of world. complexity whole machine, just just lingering the And of going the effect effect will you if procurement there's it's beyond that -- and honestly from COVID. of just the level a bringing kind slowing stuff different

for CEO, Ted at Hanson, to floor this closing back I to the over comments. are questions no turn would There time. like further

Well, second We your we us questions our July. thank to in for time, all results. you quarter with later appreciate forward your look Great. today. being and and announcing

today's This teleconference. concludes

your your for you You may disconnect this time. lines at Thank participation.