ASGN (ASGN) 25 Oct 232023 Q3 Earnings call transcript

Greetings. Welcome to the ASGN Incorporated Third Quarter 2023 Earnings Call. [Operator Instructions] Please note, this conference is being recorded.

I will now turn the conference over to your host, Kimberly Esterkin, Vice President of Investor Relations.

You may begin.

you Conference us Call. thank Third for and XXXX Quarter afternoon, for today joining ASGN's Good Officer. With Officer; and Financial Rand are Blazer, me Ted President; Marie Hanson, Perry, Chief Executive Chief

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

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

For Relations your can Investor section materials of supplemental our investors.asgn.com. prepared convenience, remarks website and the be found in at our

will as cash to measures, non-GAAP certain Please release. also included Reconciliations be are non-GAAP GAAP note referencing measures. in adjusted today's and GAAP free adjusted between that such net flow. income These the comparable intended measures and we non-GAAP supplement on are EBITDA, call, measures press this

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

Thank result within for line Third our Call. with XXXX Earnings was of ahead the joining performance ranges. of with you you, for and Quarter ASGN's in third expectations ASGN's our quarter Kim, guidance or slightly thank XXXX

our quarter, the were range. guidance goals. revenues XXXX for revenues of top-end of the Adjusted the quarter XX.X% consulting Third our the EBITDA was third $X.XX above XXXX with of of of ahead total IT billion margin guidance midpoint reaching above XX% our approximately

results, to to expansion We our as consulting background revenues like continue our grow. turn as consolidated that margin performance. a for industry opportunities . With on our to see I'd

will performance, discussion. throughout our the consistent review be we X key things As

into headwinds and spend IT better First, my remains business IT capture opportunities. ever it's difficult, for is while been will to the reverse these positioned than ASGN's market

base. Second, in of large the domestic enterprise business our our strength account lies

across market throughout base cycles. industry verticals diversified Our X client critical provide stability

our in revenues of our IT in higher consulting consolidated variable and growth evolve the end, the half with with industry project on topics nature supports Third, higher more X let's quarterly consulting than discussing structure Commercial by segment. that continues the toward our our as along to of This begin comprise value revenues performance, our I'll of cost our business verticals now each but capabilities. solution speak we these margins. review more

by Commercial the companies. Commercial revenues our for Our benefited and in business. low more XXXX quarter in Revenues on segment offset growth the large the areas comparison. declined services declines segment predominantly of discretionary difficult a from Fortune double-digit enterprise teens year-over-year our by for business, consulting segment

For the and quarter, for commercial X.X% consulting XX-month to basis. a on book-to-bill X.Xx a quarter year-over-year. of Commercial bookings translated million X.Xx trailing of revenues increased consulting $XXX the

a in Of existing renewals a with deals end clients that Sales in elongated, need an coming quarter, and our our recognize their for of indication high again clients the the during weighted the our towards be are projects bookings portion spend. consulting bookings cycles the cautious on strong of retention project at of work services. to were won as to the large quarter, duration existing rates remain on continue continue value ASGN slow remain third but

won speak generate shortly. investment with during light anything operational aimed on cost seeing are return and on containment getting more specifically the I'll clients. projects immediate from quarter at We an the green does the efficiencies, work

performance. vertical to our Turning

revenues consistent Telecommunications were X services, year-over-year. and example, up business third their experience financial Technology, single-digit commercial saw continued resiliency basis. growth Entertainment bright of low certain and TMT, verticals, verticals seeing healthcare a spots, remaining growth these of and with low Consumer Within Industrial for and provider to quarter diversified our flowing. compared revenues each single-digit though of maintained of vertical, bank with and relatively Consumer financials digits revenue sequential Media and all small services and XXXX. vertical, In accounts the were flat staples big saw year-over-year. Our revenue areas the sequentially Within each with on utilities the verticals a TMT, XXXX on decline declines in Within consumer and sequential revenues or in and healthcare Media government our relatively year-over-year, as the Industrial, double declines display account second rate quarter revenue industry were remain strength financials.

conditions, Even commercial as macroeconomic our remain bookings in previously noted, these more solid. challenging

make vast followed opportunities the for new AI many front programs AI by the the time, for coming our with AI been larger in to learning. on value The continue progress cases projects use AI work expect clients. for We creation generative majority are pipeline closely to this in clients have generative the of across Commercial machine we identified demonstrate at of once our that follow exploratory segment,

training, AI accurate the of data models project tech supply for won At time, we data quarter data engineering that driven These use consulting timely the the with future. and deploying seeing is needs demand and for ensure AI AI taking of testing support governance the work work the during infrastructure a are same being we're is this in American companies. and North example by strong in leading cases. to place, complete, exploration third One desire is

capability. the freight out Our team automation our to was end-to-end and platform and analytics an AI clients, including management brought cloud data for energy full system future build on for

the for architecture, analytics tool. management are configuration, up We properly reporting in and the set are responsible new freight ensuring

time, tool such as outcome for Cloud solutions into At same tool. technology Databricks is ensure to new that best ensure the the clients. using We're Snedblake, end-to-end and architecture the old this of Google ingested as the data part from the our must we extracted and correctly

another hired to third used robotics deployment warehouses systems, services drive machine also project major were in projects Under to retailer stock we We to won which of of technology. during this our contract, helping grocery are we're a the In robotic leader provide in excel the nationwide. consulting the fulfillment continue involving engineering learning a quarter, to capabilities. to and e-grocery clients'

deploying are assessment installation, new We each technology. provisioning, for the e-grocery warehouse support end-to-end providing quality and

to on our federal were Let's an of set quarter at sixth and the XX-month and basis to community year-over-year our trailing of the provides which a XX.X% was industry billion vertical, X.Xx or civilian intelligence revenues healthy the quarter mission-critical X% up solutions Federal agencies. backlog Defense, of for end as-reported the now segment, the the Department up segment's turn $X.X organically. revenues. segment government coverage Contract third ratio roughly

the of on were approximately warrants which for New quarter X.Xx a X.Xx translates to a XX-month book-to-bill basis. and $XXX.X million, trailing

the to the continue quarter, for potential the following we work process government should of we occur some in the end disruption recognized third the during As QX. procurement secure shutdown

for several government less leading X proactively government shutdown. be in of that October vast Our up federal extended to believe work impacted with discussions that engaged team our case the XX% and We weeks mission-critical. clients of majority work or government reconfirm in is the our an to of

we We're base. budgetary heads our In solutions leading the IT providing on meantime, keeping of down remain track client developments. to government

Speaking secured, of new the cybersecurity U.S. Bureau. recompete third with of new and in won Representatives we work we House of a won combination quarter, the contracts supporting X new contracts. the Amongst the and our Census clients

Office contract and Artificial Army support a or secured Research the and Laboratory. Intelligence X-year with the Chief Geospatial National to CDAO Agency, AI data we've addition, Intelligence In Digital

from global contract innovation in establish intelligence smaller a won support that academic the lab AI worldwide. CDAO artificial will also to a help research We

artificial us forms Similar generative excellent of But present. use segment, qualifications much cases in and government their customers commercial traditional efficiency. with the identify of to work to remains in the to federal that continue civilian space intelligence, increase operational look our in will AI exploratory to at our

integrating large into current In language solutions. fact, on research and generative and AI AI models several programs, we development are

support Affairs, and overall project cybersecurity strategic With including vertical adding the work breadth planning data U.S. the the industry regards with key advisory the implementation. enercyclical The services new extensions, our of we balance described evidence to Service to government and provides AI continue several supporting just technology portfolio. and of Department account of Veteran is work Postal cloud and work while advanced management won areas, to

With that, XXXX fourth the over I'll our discuss turn quarter Marie the to results and call third quarter to guidance.

this speak everyone It's Thanks, with great Ted. to afternoon.

for line our or our with expectations. exceeded Ted the in results quarter were As noted,

Commercial Revenues a $XXX.X the from quarter. The third were X.X% Revenues the the of down for year million, year-over-year. quarter of third Consulting, billion million, $XXX.X were on down in prior XX.X% of of segment $X.XX stream quarter Commercial X.X% XXXX. our revenue totaled year-over-year comparison growth tough the to revenue largest compared XX.X% high-margin up

$XXX.X Vine. The of XXXX adjusting federal Growth in a commercial of declined from industries. in Iron were more revenues Revenues XX.X%. directly our Billable revenue day vertical $XX.X to reflecting benefits revenues, prior of maintaining to including assignment million, year-over-year, by Billable up the the base and for in our quarter, parts continued decline fewer assignment speaks segment diverse segment, from XX.X% cyclical million same a business. XX.X% governance the across contribution basis, was QX government a in client in our federal offset X.X sixth Days softness On discretionary our year year-over-year compared consulting growth

XX.X%, points for basis revenues, carry the the which stream, Turning high-margin mix permanent of to gross federal basis to margin a in to down partially points gross year-over-year flat sequentially. related and third points gross was XX.X% consolidated XX higher the margin was expansion margins. by XXX margin assignment year Commercial of offset certain down down The over was was and for year-over-year basis, a revenues Commercial mainly basis with quarter XX.X%, year-over-year, segment and federal high-margin gross On segment compression last in lower was a from year-over-year. consulting XX certain segment digital within margin mix revenue lower IT Gross government commercial business revenues. mix Gross which our the including placement mainly lower marketing higher a segment of mix, a high-margin segment, mix creative revenues of due a margin revenues margin. our than of primarily government and

revenues year strategic million tentative to million or or our included planning in revenue SG&A for $X.X legal the settlements, as estimates. million third $X.X expenses; and $XXX.X a period. expenses SG&A prior of were in in XX.X% integration $XXX of expense of included not were compared guidance million which and acquisition, quarter XX.X% both the

successful transaction year-over-year expense facility credit end and and As rising we interest loan that recent extended of upsized completed the August, our increased a interest At revolving to B. our refinancing. and the term expected, maturity of rates related

credit to and B $XXX our XXXX. XXXX, Loan a years extending with million X-year in facility Term million Our maturity now maturing is $XXX X also revolving is extends

our million, $XXX.X leverage was was was speak and adjusted million, $XX.X we under shares margin equivalents cash in remains the availability end, share. further million. price Secured low was repurchase and million full our At $XXX.X Senior EBITDA $XX.X of X.X on about flow at EBITDA. million increase an million, per Free continuing EBITDA Xx transaction for during XX.X% year-over-year. from cash this and shortly. quarter quarter cash transactions, adjusted We were Post Income of Ted net the $XXX.X had average of $XX.XX operations revolver. will million Adjusted new XX.X%. $XXX at quarter an third the deployed cash

roughly have We under $XXX.X share authorization. our repurchase remaining million

we cash With flow powder generation availability revolver, M&A strategic dry have ample make strong to full free and once market the improves. under acquisitions our

guidance. to our Turning

November. potential of supplemental based Our not account materials. government revenue do estimates current any on in for possible in are declined quarter and fourth release the into our XXXX financial estimates conditions and shutdown forth are earnings market take associated the set with These

Our second estimate after also fewer same seasonality, period the Billable fourth assumes with lowest quarter, and Billable of than Days as quarter. the X.X into QX the the which Days year the Guidance XX the takes account quarter ago quarter traditionally in fourth XXXX. first is

in to conditions expected expect declines growth We anticipate In segment, be offset federal These both the to Commercial soft remain across to and revenues assignments by partially remain quarter. our in macro our consulting. challenging we fourth segment. government are

businesses. to work mix expecting We government and our will year-over-year margins softness retail discretionary trends and of greater decline are more continued a cyclical mix similar more due business gross Commercial in federal including to the

our partially fourth we the be background, expense $X.XX an business to by should improvement billion. year-over-year for With margin. $X.XX billion cash estimating revenues offset in This SG&A of are quarter,

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

call the turn to remarks. for now closing I'll over you. back Thank some Ted

peer the about is ASGN's cautious market demand clients, overall IT very positioned Thanks, the market set to demand given improves. business with leverage sets, the solutions growth IT qualifications macroeconomic we with Marie. the near-term our and future. ready Nevertheless, economy sought great our in well uncertain and Consistent across that spend in condition. after remain with and is are ASGN skill IT

in successfully the increased company our B. M&A the completed powder Term position Marie and transaction third credit As the dry upsize to This revolving we with noted, extend we significant and Loan a us financial as future, the of market and quarter, our facility flexibility maturities for as provided proactively transaction our acquisitions strengthen. for

the We can is these B to of return the our a the the continue also to thank for And highest best leadership to would we of an Jim attribute this of the M&A come you on of success your and to to company, -- Term family our of by Both Loan and ASGN. ASGN our team, day led was alongside want strength business. years. which and retire. revolver use you believe but due of has capital. treasury pleasure would all our for been The refinancing XX efforts I the part has Jim dedication underlying entire been behalf past Jim we integral the exceptional when work knew on years, were Jim to

retirement. best will you in your well-deserved You the and missed, we be wish very

to the treasury a We're the that July. Transitioning Greany, finance in since of brings VP traded and welcome of since excited and near him X. of we background on a have into many for who served to Chris in companies, board Chris future. publicly experience an wealth Jim's ASGN. Finance role you opportunity With at hope and Jim has have as extensive shadowing to meet Treasurer, Chris Treasury day has Chris been role ASGN

concludes prepared quarter. I'd team past ASGN remarks. to our That entire our like efforts continued your thank this for

for is IT in a Our the ability and to again our of your call. to dedication where spend of you quarter third unwavering future remain in our the Thank clients. commitment fast current and today joining result

questions. Operator, please to open the call

comes Tobey first the Our with line Securities. Instructions] question from Truist of [Operator Sommer

the us what end-to-end are sort as the or I was the in terms bit they little modules commercial they piecemealing maybe wondering if elongation for opposed on a of decision-making to more size of Are color signing in consulting whole of in give projects? period seeing arena you sort the Or could diminishing customers them of and phases for up are of out outright? you? you're

Yes.

is their I'll a we're what of you, jump So Rand work. I But what would new in than the thanks for lighter. in solid it for question, which here, bookings, very let at little more a too. was little But think call were Tobey. bookings solid a I'll kind general, I X.X quarter, renewals seasonably this QX tell bit seeing $XXX million. is We always book-to-bill,

or not pleased spend, in project clients we rate if And similar, those of think issue. seeing Rand will, that. I you right? a bill definitely were size our their is elongate We're embedded So generally mostly that revenue. It's reduces a generally and It's margin with that.

but the duration. a to you is larger now the to Tobey, be X-figure have And client smaller, scenario. the the if which normal projects tends us? you X- to our consulting the will, piecing noted, to milestones. work for they that XX-month flow AI In Ted, projects Except mature, your words, work, more I to has of, think is it out, come on other it's different go of question

if you it's X. not quarter being some for it's of will. been finish, a to time in suggesting don't rush that think I a and not cautious, generally, this now last is But is think in clients, some which they seasonal, the or the they've just I'm priority.

question? way the answer it's Did the way executed. your contracted. it's It's much that not it's So so more

that think gaining Sure. on market the most then How of relative rate follow-up you're play? provides doing bookings, you think understand you theme, of that serve, same do within I holding areas the as a renewals, it's color. you're and you the in And helpful That do to share?

Rand?

fundamental clients what? cleansing, you development, mapping, for are lot weeks. a to notes, way, recognizing I court aggregation, This next you data area. sets these first AI to -- that in Ted, over the this the bit. together, peer data take And technology comes data a just data kind mean, a by that our the it we'll if Tobey, will. not systems are seeing, consolidation, a feel that I like I is holding lot we're has group when days is the work if wait Ted meticulous. think guess that in of I'll stage steps the take Data shot. data and report, the expanding And we're time, all And any of be mentioned Most of of in. to pulled for data be takes work But have

other that that methodology And for technology beginning still the -- pop data most pieces supports one effort. horizon, data the and prep work are support technology thing cleansing, of to And we But AI to watch Tobey, part, for on implementation work its new they prep and is important up come. mapping to the labor-intensive. it's

a ask If M&A. about I question could

you time question think a reopen, perspectives, that, I many seems when your capital it this would in assets one based financing, Because market might like what lean or of do certainly, in Is a resume, out M&A, the the remarks multiples said think and -- in of something have you for appetite. mean prepared sort be from bit. you of on a it sort good by you to available fewer markets revive, Did when your that?

would say, market because maybe stepping high-quality have we still -- in own Well, Tobey, their see still the that the I they it reconcile mind, would that. valuation not with into agree I are question. solve assets

prosecuting typically see more say, and It's things and lesser lesser quality, it. flowing through than we quality all we we're while see. would assets of would -- So you I pipeline the

anything more that it's else. than think I So

they're solution and areas well, great want be as here afford to they think has IT can not they They're that performing, good less. in. company I in a some capabilities but that For as maybe high-demand were, we wait to performing

think it's around I mostly that.

next makes the could over staying that maybe were how and the because government That question a XXXX give last get perfect business near awards some perhaps and experience in I 'XX those to in sort top Could in as me. book-to-bill be isolate in you contract may what Last straddled the government us you volatility months? of history lesson that as shutdown line informative a as we several for into open impacts performed sense. the

Yes. Tobey, back. far pretty Well, that's

you I follow up let So on couldn't if that, that's you clearly that, give us okay. on an answer offline but with

our question William next And of comes the with Maggie Blair. from line Nolan

of what first side one mean clients' that And spending commercial Can processes year? My next for impressions you on for is initial share potential about XXXX? your the things. the budgeting might

I we're that of Well, down next kind if really kind Rand, mean a I lowering basis, comment. I number here will and follow on by they're or are but macro market that's client, IT into we spending growth year, higher to expecting So year, now. of the not you you they're now, comment? overall middle right client in make enough side a think to of a in X% kind here Gartner, an on they're of client X% right? the tell this that

and let's executive things technical that there's I here. to tell the has client make about to accomplished their -- would it's future. for that a I and of runs own has their outlook technical decision the client the X client say team the to projects talk get Well, level, it. and you financials can The levels relative

going. stage next the get Let's

call what just is prep AI on. the a in cases use phase before I layered get work mentioned, lot for As of I the

lot of at So discussion there level. a the technical is

an I steam of sense speak now the thinking that, if think I'm the earnings are up. technology, executive market If we're I the I provider, us are in coming find ad Maybe earnings executive I'm indicator out money would I up. ahead moving bank, looking can't to that full of seeing level, are of but a some positively were the businesses. I'm if results are giving that kind and a these an if it's big

So -- of that of been our always know, IT you has function thesis, we is a as the company. earnings spend

what's for to be executives are we're the in just continuing house. too on world. And bookings think had give the resolution early aid foreign I spent going third QX also it's us great said, had on would mean, to indicator, quite happens think bit, -- quite government even bookings Ted but Mean in I quarter. So I'm watching quarter. There's optimistic, money bookings. I The sure, good. And bookings with the the Maggie, little right? an tell, going what obviously I say. Usually, The we've in lowest a pretty commercial side our it's were as solid with, the

So...

the then in anything mentioned that in Investor That's some be would maybe your Ted, think any expected the over some on time? would it to frame you've expansion. like more Or you for Day? helpful. you a opportunities over prepared at of shift that And of comments laid Is comment margin past I a incremental time mix was your multiyear have out opportunities kind remarks, helpful. Or was that there

Yes.

cyclical generating Even good have That's plus a our of and our think EBITDA better profile. to up we XX% part doing it's in and here mean, -- It we consultative margins say still margin, higher gross right bigger. and margin we're quarter. the I see businesses Maggie, that's more a becomes third where as our if comes margin at margin way job business our we that numbers, a that in are levering of down, it, still here EBITDA of still that's believe some I the better.

our that X-year quarters, kind business. short-term our we higher because the So a I there's of because nothing that in out you XX% can shift think consulting in that. to won't future, and gave within laid continue in is that which to I said mix I've play Day that But grow plan, our Investor most says XX.X% But of the the target. our it's of before, it about see around -- quarter-to-quarter we mostly range. given was in we mean range and with things

of from Baird. with comes question line Mark next Marcon Our the

terms On to course the job really priorities of regards this should forward? going the of the margin with margins, to probably Wondering about internal thinking nice year, out truly environment improves? about the preserving how margins. in capabilities strength coming protecting EBITDA that I mean, Over here how the benefit you've you're relative your we done building whenever think a headcount will

this business as Well, margin. of Mark. helps think the stabilizers out. before. other it at don't we down, and I certain this and now, or good that part are come our in back, solution in need sabotage question, Yes. We've coming us in I can I areas are pace are we head saw mean add coming believe out. down. and protect I areas, either we'll to incentives pace that to the 'XX. 'XX headcount, those great Right margin our But way it mean done of We the think something. incentives we have to ahead some stabilizers counts invest of Those

So again, pretty I about despite balance. don't mean is here. think I feel we we're good the cutting something nose this bags off our our

seeing And we're letting watching built the today, work. attrition investing some are it. we're the we're business, There other where where areas natural are attrition areas is attrition natural frankly. There the and into that's that we're

that. all of wary and monitoring we're so And

And real then Mark, had I quickly. and Ted Mark,

of some and headcount work in about methodologies in recruiting productivity. area the in certainly way You can't our without and our talk refit the we've we And use the upgrade, technology talking the we to engagement. with been areas, to go about quietly, continuing

here the in So improvement there's growth. also to absorb some of room productivity

in both we're things, So watching of okay? those it, investing fact. And in

the more it's you regards great. when could would from on thinking it in perspective And any to to those? of I are what work engagements. days, engagements, be know early good like you being of but -- be when position larger to transition you That's with a a about? sort And become prime some magnitude exploratory larger have Do AI does

Rand?

others, in of then the And And AI, use not the X and see cases. is chips, with the we've in data you and layers software and that's yes. and happening, data. answer Well, that's the about software the you to but is layer also preparation the and road next is talked the work the processing the Mark, enterprise just -- and readiness the world. data third and power cloud

So an in data side, lot be companies there's in application like middle us the a data. cases the for of that will obviously, that of use work, layer

the So client, I I'm our presuming data look, some were happen. our I client at are day. use I with building envisioned. use what and we're the that to way you if will accomplish end trying data some would the it of cases of great work supports we're these this now you've to The think By need way, says, extend that the done a in vision to work. cases

both, And smart our and that cloud just not emerge, are out, data alliance the the So infrastructure experience. continue our should that but not to we with be also on, technologies and technologies technology, be inroads and coming data. we a the prime? newer should relationships, these through Yes, our of doing just because of enterprise but the on we're

for cases helping both a work, done team about done future. our articulating are working, the lot go. we if And out strategy. as use customer experience creative they we Circle of AI great pointed Gartner support remember, thought position -- you highest hope going Credit was in pioneering, has the marketing And use think to them the I clients their and So to in that best case has be cyber and

building But do good we're that in importantly, to we need the position. work we're hoping to doing I'm So position. that block be in

several capabilities provider government #X of space. we Mark, more identified years is, point been AI the running now think I the one for have as federal remember, in

not we So commercial our that's can that customer, an only areas. know-how supports leverage internal that solution in certain federal capability but

bit rates And knowledge, like have talk like That's the contractors truly you obviously these supply really who whether high pipeline? then terrific. a the and from from what the the should level bill getting I'm of And promising scarcity area. demand. in a skills Where relative terms do the year about about sounds are are or in have? little like be but this that how It the a can over now, they margins, you really the it's are to demand? X years side knows wondering what is you the given thinking now

remember, Well, port Rand in and of can our one multiple projects as have people organization AI There's be many AI mentioned, hiring these Yes. world, facets right? not this, I data use that we expert, and there. -- type Today in cases data to to many we're layers these our the effective mean. and other in of working these just on

will I I we have players will. that business mean, of in our today, a already you solution capabilities pools lot So come from if of think these

Great. seeing terms week-to-week TMT, bit little Just basis? they're the look but a was XX% how accounts like mentioned down XX%. And versus you're stable, Are wondering about that thinking sequential like a you TMT that. you've of in on stability

yes. answer the to Rand, I'd Yes. But want say is do on one? you that comment

Yes.

watching call I indicators. both, and think we're we're what I watching micro

we've the mentioned Where technology growing the things indicators, But and the their having telecommunications that I certain area we work look -- in products, which step But earnings, which from direction themselves, a definitely, if and we comps at tunnel we growing. in will, they at right and the ago end marketplace. Things watch exited whether are companies you're QX, we the see we've to started see in So other is in there's are those you obviously, the we as around. spending in us in year being the Keep you you to maybe to light our look help think And When steadiness of and a starting that the workflow. that is in of through coming. were quite stability, turn mind, QX a added high. businesses. at these seeing media some declined year.

well. Great. this And right prior side perspective? last, elements now Apex recollection My a you've How cycles. commercial what then the on to GFC trends really terms was in seeing different relative of your navigated actually feel What cycles? would from got the involved the said, one history one Rand question, been as both business asked compare multiple you well. for we're Tobey I've in

your thinking it? And wondering just does so I'm How -- you about how are this how compare?

but business foundation Well, based different or on acting the right? same for X way. in same of The no it's business Yes. cycle are to kind sure, the cycle,

of think related the what's services predominantly mortgage, some that and we've the cautious interest in and accounts different it's in years that increase positioned have and you turn the the of and much board watching way. this a long impending industry, in the about you And if certainly, stuff. will, recession X to affects big enterprise happened banks that things is retail banks, think And financial period that got an consumer been in caught been time a talking now If I time. themselves more broadly large slowly great housing financial the over rate the been about crisis, this that's and across

cycle, this little I you've that think enterprise more And it a so kind through a over of industries, seeing in And instead a certain period of makes you accounts. time faster broad-based if ripple seen long different. will, of

we times said, being done various before. we've not how definitely through this That different. I is this too mean at manage

understanding should the have we need of how the business that And actions and into we out. what sometimes are that that things leave an downturns that kind also realize operate are the we leave you So you these about to take. things management

really because And signs for be good us to will businesses they to you better into of growth IT was to of. lean So a part led, certainly, returning it's want many while be cycle. and our think, us that one initiatives that I are more this be may and their they'll for that need there, into profitability, not us TMT seeing that still industry

a be thing positive us. for will that So

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

be prepared it the and I assignment is down your consulting, I'm In that quote going a in remain referring both across quarter. Should quarter? and soft we your and on this segment, guidance and basis fourth to the year-over-year both revenues is that remarks, our to assignment consulting will commercial in to assume fourth think means you for anticipate

So, Jeff, question. thanks the for

what to think very in I of down view the Marie were placement flat kind to what taking talking bit I influence I the then also commercial little our the conservative say. guidance secondarily, would slightly you, more she And and federal, reflects margins. we're how think that's could and would that a of in call if up that

the are quarter competitors change on no always in The the third think material fourth the there's there's I although is those commercial quarter. Look, side. environment. -- real the operating So than lower

So less the softening, see a that's third quarter quarter, is always the and Billable you've because Days. strongest. and you holidays And in little the got fourth

working then who year. customers the they get to to kind start not and December X. various next come I'm some say, of not have end budgets things also until January natural have that you will projects by "Look, on may on this into finish And You clients going

back and the fourth it week shut happen lights or the And days, off for come here holidays." Let's a are quarter. all at natural just the here those in things so let's that after XX

in I'll There's the in So environment. guidance. you commercial that's what's macro market. change real underneath the no the tell level operating

is coming QX, kind into that's of clear things of steady. we one say we what QX that is are think out I thing here, fairly would and and

difficult obviously, We've a them and yes. about Our market. was hopeful working lead about work us, for stabilizes, expected, into face of a life, commercial an bit begin things to translates QX The the maintaining continue in they inflection even we bit a the we is not but margin to point. then that little yet our and here commercial EBITDA how business really as are still term, feel the we and said, to found market. in guidance. little of the commercial talked business And Rand in set as QX good no term than on us are better little No that call market that

in shift Maybe government I understand. know mentioned potential you to the I terms I Okay. federal business. could gears of shutdown. government the

what a help Contract I projects stop? me will all negotiation happen. the shutdown? could through of be can talk we that business the get If less if do expect But stop? we was what mechanics? think we with just I impacted. happens Do it than about just walk does mean your XX% you could

Well, and what's started come your think some on right? into together in that happen with not, October. what's thing in market, already going and of -- thankfully, on can in clients was is determine we've that, of leading immediately process what critical And I first kind based close the that you you that

we've a So have stuff. got and if to idea. we that, continue you foot mission-critical And ahead Once a work good on pretty through you the go determination you to may on makes few our with we'll to make concert you the that, be client so know a that mission-critical the do appear will determination, and and said that. will, not that things in on that client us,

on happens And pushes then the it new is right. to what work

period our it's right -- moving a that's get like with first adjudication space time, thing, presuppose maybe a So half going and we caveat quarter delayed matter We're the are who mean one they it awards our Jeff, in what's no resolution not a to house. events of slightly mentioned a government in of the of the be note knows, first here going a that now. next long those, such here. it's federal been into some one could as I the or with -- shutdown. we year. And in But short over weeks stage wind. few or things are looks processed towards in too, that turn whether bit, in guide. crazy And here last the of continued But to of another wind be there's that in on slip a the just what little out

get And down how front that as so develop we'll weeks we see road. more few the things on a

so have that's good sign. finally a We Yes. speaker, a

Our comes Seth from next Fargo. of with question the Wells line Weber

wondering of down? So of the on could wondering, Did they bit like a at cadence Do they talk Do to I'm willing to be sort comments of through third on the quarter? side. quarter. kind -- third color get kind give about intra-quarter of the appreciate if the I just business little you things things little stable Rand, trajectory just get any the they the a would the you worse? Commercial where go through better? if of stability end quarter, of sort here

about talking you're QX, about QX? talking You're

I'm talking QX, yes. about

of kind July, trend the Just lines. September August,

sectors Ted, I I where would that would with little waves and too nothing little a sectors say dramatic, you wave have a up client to then say. have down, sectors other wave light and have but you would

of comment firm the placement think So the guess the more But discretionary our it's and quarter. we're in more areas I work, rolling pleased, -- the waves you sign. we through this marketing week-to-week stable I becomes that make particularly quarter, was I'd staffing, fact like creative you're work, a end predict little towards almost to good the that and the going it more could the a what And see.

go -- pretty then to to Okay. they I wanted the back mean, over years. business. the comment And relative I the a forecast of just to next are comment, your couple big Gartner uptick projecting next

lend you soon Are And that Are there. forecast to that you seeing that not I too just of confident, call that, -- call? does green has just not just Or kind tie Gartner to you're think have ready you so to make would I'm out confidence mean, the it? that's actual shoots make any right together. yet. that trying way that Because it's to about

break you the software and services AI a to capabilities seeing such services companies things, rates. mean, Right. little areas, of that, if tech or the companies start broad big It's consulting forecast. generative the cloud into and pretty and providing and other they're growth I a behind good lead The a down bit it lag. IT now

would big, spend in I else? on you lay more say I is anything would what Seth, So think I a categories. is Gartner guess, broad right? it capturing all those And probably Rand, that,

appreciate at by look watch particularly earnings we different Gartner what Seth, and within but think, industries. of we I industries these is saying, industry. I it companies the

had good quarter. past more about technology banks this we they and not is because the good a like are sure I'm for providers season. pleased sure. looks boomers are worried big had the quarter, not that you flu have demanding a the We're baby services, where It were So quarter. Telco

by well. well. This so strong, the And gas. is staple doing consumer stays oil mean, you doing And watch way, assuming the are we're it's if it's I the earnings, utilities, consumer and

that If on good the XX banks say is continue -- wouldn't on build then to build it, that improve performance, for a you can their believe I thing. improved their

use and they're coming better AI reach the are really enterprise have around those Mostly well, to they're getting to AI, embedding till and layers. I they're later. We back. guys spend not think clients advertising better use raising because technology right? cases. the claiming power, goes they're talked X full about they're dollars, data processing is and back which rate and putting to structure that that even it Obviously, And they're getting now if software doing

to data in about know around the what So be. their will spend And certainly initiatives, a also client of they're layer. particularly layer, what of watch sense macro what a middle the and industries they're terms in we the about sense us give in we there indicators are worried that thinking

interest with stability So I we I a in conclusive from professional yet Ted, at, are mean, data? mean, think look I'm we rates, I anything good, might think see the all government things certainly economist. I something I not I think know. and right? but those it's And is that do what federal

line the UBS. Chan of with Josh next Our question from comes

on side, elongation of mentioned of you the causing some guess the consulting projects softness. and that there's that's I some

you looking clients historically, are What for project typically So gets time what I more confident that they there? guess, again? the will, recompress those lines

spend pace, they're Well, initiatives what how and Rand they watching Rand outcomes, up of in their feel to to you investments IT. to burn bottom look, certain on projects have back willing measuring I and own growth the order much to about, they're and to is they're their pick will, about speaking line and When in said. if get better think

in headed said to think They're we've that. to trying I in and again, harder in out it lean really to it to few times it watch into better goes and implies So with They they're and I just where quarter-to-quarter and they're your the on a XXXX think speed today, take Josh. up spend back have IT. and stuff. hanging But question, measure critical more about feel there

got I my guess second margins. I color. on good question That's

I a the of looks decline down going talk than SG&A SG&A Is the your are like guess, more have it SG&A more just could is. that businesses your mix there? down is function So of you to that revenue higher some composition? as

So talking on year-over-year? you're SG&A, Josh, about a it's

Yes. Correct.

Yes.

So well. noted we that of as kind

our rate changes So with it is associated of a kind comp year-over-year incentive with on the stabilizers, right? the really around So comp really basis. business just lower really the a is incentive

ways. under second all about Marie's full different And we I in think if to detail kinds of at maybe of you a think levels piece is point just year, incentive last were

incentives that so at in were expense you So the right? to is And business full and now and the where with down is. performance of difficult -- of Kidomax itself incentives a on comp are side, properly coming the

X Josh, worth is question. it different we sort have in staffing, mentioning, workforces, don't one your of for for embedded one was That consulting.

We have workforce. one

services. our clients of provide managers array the across to account Our support

back and just recruiting not certainly Our requirements, but team our team requirements, consulting our staffing does office both. supports

don't So is what Marie workforce board. and said across just it happening the different and two workforces. one Ted think then It's what's as of

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

guess, Creative trend, just permanent you you be wanted That first I including I about to helpful. quickly normalized Circle, of are can of, if terms in would ask where kind pre-COVID. share staffing,

represents placement total it QX, revenues. X.X% perm for So in of

at If you year, kind from a we X.X% of just XX%. we're were look of Last dollar total it perspective, at down revenues.

point. other one So -- look you and just it, at honestly, when when you you

close During to COVID, the our COVID X.X% is levels. almost kind of

curious been That's what disruption on, maybe back they cycle? is -- kind shutdown there just delays of improvement? other Are a of kind spending? seeing Or the terms of actually potential aside, they're year any kind spend and normalized really I'm in and spending then we some all you're I been going in back -- of current have know ago, helpful. on procurement. procurement? potential some go shutdown bringing is there's a sort if more of stuff the if question to how in is And my creating

any of caused that will. if kind think resolutions have continuing don't disruption, I we're right you now under the

higher could normal, We the fiscal QX. normal we year think be million. bookings as in as at it saw could, -- I government were much we our fairly into normal $XXX

a other as And good number groups, I good new we release, X.X relates have running higher we'll a watch as to to Our peer and anticipated. was good book-to-bill about them been than but bookings. number it and expect results the companies at we've very peer

of that saw I healthy of with third some quarter, of here good So fiscal space and a federal some going awards on government at government the you going think year. in that those lobiliness contract uncertainties the resolution we've even the during Heather, the though the flow front, pretty what's end got continuing and and on on

question from Thind Surinder And our with next comes Jefferies.

a on just commentary. some clarifications couple guess I earlier of

XX projects kind then maybe to that first The that Are you in are XX -- realized point. months how the over quantify we able Or this of obviously, being the And comments around manner? clients terms now number should just bookings these there? months? any to elongating around projects Are X that? of just at being think context, in about the what

commercial anecdotally, just correlates but yielding growth you rate. would Well, I stuff slightly have on months sure, our typically, around getting And for months I the now we're for out, leaking XX we're you, think think slowing. still that We've whether I with seen the consulting a it that rates, XX that are that. and definitely tell bookings And or bill is that it's you, just are solid further up. team Yes. numbers, XX it's it's or these lower fact will on average months seeing like projects book-to-bill

it's So hours billed It's there. a phenomenon rate a applied not hours bill issue. or

the could of also And as Surinder, the is down, quarter. second quickly slow it none it same that is as And mentioning thing accelerate. way, in could new, worth this also, the we reported by it

it. Got

XX it's -- to So the last started of XX XX, has first idea it that is Or How that quarter, to XX it process a were ago the at XX XX now this... and months year and was that? this XX, when if months then we rewind Or about months. elongation was kind point? this stabilized think should is months and now the we

ball, trend the fourth a for to point. X quarters the I up client. I here, in that's right? it crystal would -- a similar That's think change I we've take think We quarter. to seen mean, see don't Rand's that that will

that quarters. So be X will

if this, again, third, more with quarters to consistent but see where seen to it's the here quarter this X a trend. Although we've we'll second consistent and and watch have come, we've got fairly fourth

And Understood. bill the rates. just follow-up on then a

renewal even that? there some projects. there? here, a we that hold a out sounds way You the a that It maybe CPI? Is able pushback? talked like to this algorithm? think at you're pricing we So about there conversation point? about What squeeze lot the exactly to maybe is is little line the it? on How of think should adding Is more. of bit a part lot negotiation should right think about How point Is of of the Is here? growth percentage about there growth some that

increase. very So slight increases in you're but -- very slightly bill rate, slight a seeing

what margin. say more in slightly to the you Rand, back And to the forth maintaining You're with seeing client? would and

bill mix somebody somebody of some Well, or course some escalation as of of escalators of dropping our that of in project, future. portion some you set the project And adding be the then work, have good the into change the out. else maybe the could during or with work the expertise a out them the to the of certain go execution rates

number So a really skill factors set it, matter the negotiation a the that of job. it's what's of that into to there's go not point. a but It's finish right at

would if a order a in you client rate IT these them. There's in-demand the they skill Surinder, just realizes professionals not a at on, high will. one have that in critical going level add sale I thing still is all pay market there to for to get areas,

is between so best And there's for productive -- are the us that certain a rate those a that. and understanding get the those capabilities to areas, in clients there there that

then That's final helpful. the kind question And here. of

has sequential was surprise showed that been Just That and it were few revisiting to Revenues fact how business given commercial to growth the a quarter. percentage see last that me quarter-over-quarter. down that Consulting. a strong strong points

Just clients than push there? maybe go-forward the that is on just near to out maybe we understand that Is just of and that trying that? work? a few to that Or color think should broad-based I'm time? ended how basis? Or it more same projects any did interpret some how a kind about

me you start? to want do Ted,

Well, sequentially. of commercial I've got quarter-to-quarter, flat consulting kind

rest So of -- your question the there. Surinder, and tell me

that. Just your in up When I at commercial slide the see QX the to at QX color in I pull the around segment, deck trying I XXX.X%. mean XXX.X% slide here. I'm see deck

see I percentage X that Commercial So points for down quarter-over-quarter

can it that Slightly almost just may here there and people best in fourth by projects the -- QX has on XX next pause holiday down. off X they enjoy a it, ending January in like companies think elongation get Ted or period. decisions and weeks of explained summertime furlough will okay? the time the in X or for again or around Yes. of make and days, X started days that some mentioned the just put X earlier it's decision be a to the holiday Xnd. to And let people people be summer, they're summertime, to I make going quarter take just make kind in

it's read than it's -- I to that. So other nothing think into it

anything tell Yes. it's or no hours adjust I rates a you, big bill the days, would there like no There'd that. fact. be would you thing around Surinder, minimal, discerning be for once or

just to it's one quarter vagaries think I the another. of

reached the to And Ted I'll the turn the now back for closing we over Hanson end remarks. CEO, have call of question-and-answer session.

want beginning Great. 'XX about time very to we the Thank our much. at everyone you questions quarter Well, full speaking fourth you I for and today, year February. with forward and their and to of look thank attention and

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