UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (the "Act")
For the fiscal year ended December 31, 2024
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 001-35636
ASGN Incorporated
(Exact name of registrant as specified in its charter)
Delaware
95-4023433
(State of Incorporation)
(I.R.S. Employer Identification No.)
4400 Cox Road, Suite 110
Glen Allen, Virginia 23060
(Address, including zip code, of Principal Executive Offices)
(888) 482-8068
(Registrant’s telephone number, including area code):
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
Common Stock
ASGN
NYSE
Securities registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act of 1933. ☒ Yes ☐ No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☐ Yes ☒ No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing
requirements of the past 90 days. ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of
Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such
files). ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an
emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth
company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☒
Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any
new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal
control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that
prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the
filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No
As of June 30, 2024, the aggregate market value of our common stock (based upon the closing price of the stock on the New York Stock Exchange)
held by non-affiliates of the registrant was $3.8 billion.
As of February 14, 2025, the registrant had 43.6 million outstanding shares of Common Stock, $0.01 par value.
DOCUMENTS INCORPORATED BY REFERENCE
We are incorporating by reference into Parts II and III of this Annual Report on Form 10-K portions of the registrant’s definitive proxy statement for the
2025 Annual Meeting of Stockholders, to be filed within 120 days of the close of the registrant’s fiscal year 2024.
ASGN INCORPORATED
ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2024
TABLE OF CONTENTS
PART I
Item 1.
Business
2
Item 1A.
Risk Factors
5
Item 1B.
Unresolved Staff Comments
13
Item 1C.
Cybersecurity
13
Item 2.
Properties
14
Item 3.
Legal Proceedings
14
Item 4.
Mine Safety Disclosures
14
PART II
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
15
Item 6.
Selected Financial Data
16
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
16
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
20
Item 8.
Financial Statements and Supplementary Data
21
Item 9.
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
42
Item 9A.
Controls and Procedures
42
Item 9B.
Other Information
44
Item 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
44
PART III
Item 10.
Directors, Executive Officers and Corporate Governance
44
Item 11.
Executive Compensation
44
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
44
Item 13.
Certain Relationships and Related Transactions and Director Independence
44
Item 14.
Principal Accounting Fees and Services
44
PART IV
Item 15.
Exhibits and Financial Statement Schedule
44
Item 16.
Form 10-K Summary
44
SIGNATURES
49
SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as
amended and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Such statements are based upon current
expectations, as well as management’s beliefs and assumptions and involve a high degree of risk and uncertainty. Any statements contained
herein that are not statements of historical fact may be deemed to be forward-looking statements. Statements that include the words
"believes," "anticipates," "plans," "expects," "intends," and similar expressions that convey uncertainty of future events or outcomes are
forward-looking statements. Forward-looking statements include statements regarding our anticipated financial and operating performance for
future periods. Our actual results could differ materially from those discussed or suggested in the forward-looking statements herein. Factors
that could cause or contribute to such differences include, but are not limited to, the following: (1) actual demand for our services; (2) the
availability of qualified billable professionals and our ability to attract, train, and retain them; (3) our ability to remain competitive in
obtaining and retaining clients; (4) management of our growth; (5) continued performance and integration of our enterprise-wide information
systems; (6) our ability to manage our litigation matters; (7) the successful integration of our acquired subsidiaries; (8) maintenance of our
Federal Government Segment contract backlog; and (9) the factors described in Item 1A. Risk Factors of this Annual Report on Form 10-K
("2024 10-K"). Other factors also may contribute to the differences between our forward-looking statements and our actual results. In
addition, as a result of these and other factors, our past financial performance should not be relied on as an indication of future performance.
All forward-looking statements in this document are based on information available to us as of the date we file this 2024 10-K, and we
assume no obligation to update any forward-looking statement or the reasons why our actual results may differ.
1
PART I
Item 1. Business
Overview and History
ASGN Incorporated ("ASGN," "we," or "us") is a leading provider of information technology (IT) services and solutions to the commercial
and government sectors. We operate through two segments, Commercial and Federal Government, and across six industry verticals, which
together promote balance, strength, and resiliency throughout economic cycles.
From a revenue and margin perspective, ASGN has grown through a combination of organic growth and strategic acquisitions. Over the last
five years, we completed nine "tuck-in" acquisitions. Each of these acquisitions align with our strategy to expand our IT consulting services
and solutions capabilities, offer higher-value technical solutions, and become a leading provider of these high-end services to the commercial
and federal government markets.
From a client perspective, ASGN has grown by effectively understanding our clients’ IT needs and supporting their long-term, strategic IT
roadmaps. We do so by providing our clients with qualified IT and creative marketing professionals who maintain a unique combination of
skills, experience, and expertise to meet those needs. Our clients set rigorous requirements for talent, technological proficiency, and solutions
capabilities, which have only increased as we’ve evolved our business to offer higher-end, higher-value IT consulting solutions. To meet
these talent requirements, we leverage our deep talent pool that is carefully maintained in our extensive databases that have been expertly
built over decades to quickly identify and pre-screen candidates, whether for a shorter-term assignment or longer-term consulting contract.
This enables ASGN to differentiate itself in the marketplace by building tailored, just-in-time teams for our clients. We are responsible for
recruiting, verifying credentials upon request, hiring, administering pay and benefits, compliance, and training, as applicable. As we support
clients across a diverse set of industry verticals, no client, other than the U.S. federal government, represented more than 10 percent of
consolidated revenues in 2024. Revenues from contracts directly with several U.S. federal government agencies in which our Federal
Government Segment is a prime contractor combined were 24 percent of consolidated revenues in 2024.
From a business advancement perspective, ASGN invests in six core areas, including leadership, recruitment of in-demand skillsets, training
and skill development, technology partnerships, internal efficiency, and data management capabilities including artificial intelligence ("AI")
and cybersecurity tools, and client AI roadmaps.
ASGN was incorporated in 1992. Our principal office is located at 4400 Cox Road, Suite 110, Glen Allen, Virginia 23060, and our telephone
number is (888) 482-8068.
Commercial Segment
Our Commercial Segment (70 percent of 2024 consolidated revenues) provides a broad spectrum of IT services and solutions to Fortune 1000
and large mid-market clients. Growth in this segment is being driven by digital transformation and innovation requirements, including, but not
limited to, that of AI, workforce mobilization, and modern enterprise needs across five industry verticals: (i) Financial Services, (ii) Consumer
and Industrial, (iii) Technology, Media, and Telecom ("TMT"), (iv) Healthcare, and (v) Business and Government Services.
Our robust commercial talent pool, which includes onshore, nearshore, and offshore professionals, can be deployed in short duration,
solution-specific engagements, or on long-term consultative roles. Our roots in IT staffing offer a strong account base and foothold in our
clients’ businesses, while our consulting offerings enable us to offer higher-end, high value solutions. Our subject matter experts deliver
solutions that are customer focused and value driven across a continuum of cloud, data and analytics, cyber/information security, artificial
intelligence/machine learning ("AI/ML"), including generative AI (“GenAI”), and digital transformation to support our clients’ modern
enterprise and digital needs. Our clients are looking to meet their business challenges at greater speed and with more accuracy and precision.
We are therefore harnessing technologies, such as Microsoft’s Copilot, Azure OpenAI, ServiceNow and Salesforce to increase the efficiency
of our own teams, while at the same time developing AI roadmaps for our clients that leverage new generative technologies.
Corporate support activities for this segment are primarily based in Richmond, Virginia. We also have a network of 81 branch offices across
the United States, and four branch offices across Canada and Europe. In addition, we have two near-shore delivery centers in Mexico, and we
maintain a small delivery center in India.
Consulting — Our business focus and growth strategy of today lies in providing our clients with higher value IT consulting services. A
byproduct of our decades-long, trusted client relationships over the years, our customers have engaged us in longer-term consulting contracts.
Consulting contracts leverage the same talent pool as our assignment work but offer higher margin opportunities and increased revenue
visibility. The average duration of commercial consulting projects is one year.
Assignment — Our business heritage is in providing our clients with experienced IT and creative digital marketing billable professionals for
temporary assignments and project engagements. Our billable professionals have knowledge and experience in specialized technical and
creative digital marketing services that make them qualified to fill a given assignment or project. Assignment contracts may vary in length but
typically range between three and six months in duration.
2
Federal Government Segment
Our Federal Government Segment (30 percent of 2024 consolidated revenues), our sixth industry vertical, delivers advanced solutions in
cloud and enterprise IT, cybersecurity, AI/ML, application, and digital transformation to some of the world's leading agencies in both the
public and private sectors. These solutions capabilities are geared towards IT modernization of the federal government as well as promote
efficiency for our federal customer base. Our team of skilled experts tackles highly complex challenges for customers in the U.S. defense and
intelligence agencies along with key federal civilian agencies, namely the Department of Homeland Security. We maintain relationships with
leading cloud, cybersecurity, and AI/ML providers and hold specialized certifications in these technologies. We have over 1,000 combined
certifications, accreditations, and awards in AI/ML alone, and continue to invest in our traditional and generative AI skillsets through our
Data and AI Center of Excellence, our hub for training and innovation that empowers federal agencies to harness the full potential of AI
technology.
The segment provides services under time-and-materials, cost reimbursable, and firm-fixed-price contracts. Contracts range from
approximately three to five years in length, providing longer-term revenue visibility and countercyclical support throughout market cycles.
We have contract backlog of $3.1 billion as of December 31, 2024, which represents the estimated amount of future revenues to be
recognized under awarded contracts including task orders and options.
Corporate support activities for this segment are based in Fairfax, Virginia, and there are 16 branch offices located across the United States.
Industry and Market Dynamics
ASGN is a leading provider of IT services and solutions to the commercial and government sectors. ASGN helps leading corporate
enterprises and government organizations develop, implement, and operate critical IT and business solutions through its integrated offering of
IT consulting and professional staffing. Our total addressable market is approximately $580 billion, which includes $410 billion in
commercial IT consulting, $121 billion in government IT consulting, and $49 billion in professional staffing. Our total addressable market has
significantly expanded as clients have actively pulled us into higher-value consulting work for the commercial and government end markets.
Our business model continues to evolve in line with client needs and expectations to focus on higher-end, high value IT consulting services
and solutions capabilities that provide enhanced margin opportunities in key areas of technological advancement such as digital
transformation, data analytics, AI/ML, process automation, and information security. By employing a unique go-to-market strategy that
leverages a single talent pool for both shorter-term assignments and long-term consulting contracts, our clients benefit from cost structure
advantages, flexibility to address fluctuating demand in business, and access to greater expertise. We intend to continue to grow our diverse
client base by focusing on large, stable enterprises that are quick adopters of new technologies. We will invest in our organic growth while
simultaneously look to execute acquisitions of IT consulting companies that provide us with new solution capabilities, industry expertise, or
government contract awards.
Candidates
We recruit candidates with backgrounds in IT and creative digital marketing who seek contract or permanent work opportunities. When we
place these candidates on projects with clients, they become our employees. Many of these professionals, and those we place via
subcontractors, are paid hourly wage or contract rates based on their specific skills. We pay the related costs of employment, including social
security taxes, federal and state unemployment taxes, workers’ compensation insurance, and other similar costs for our employees. After
achieving minimum service periods and/or hours worked, our professionals are offered access to medical and other voluntary benefit
programs (e.g., dental, vision, disability) and the right to participate in our 401(k) retirement savings plan. Each professional’s employment
relationship with us is terminable at will. In 2024, we employed approximately 21,300 billable professionals on a full-time-equivalent basis.
Strategy
ASGN's strategy is to be a leading provider of IT services and professional solutions to the commercial and federal government sectors. We
are focused on high-value, scalable IT work for large commercial enterprise accounts and federal government customers. We have built a
sizable consulting platform, with 58 percent of our 2024 consolidated revenues in a combination of commercial and federal government IT
consulting work. We have grown our IT consulting revenues both organically and through acquisitions, and our goal is to continue this top
line growth while also enhancing our margins. To achieve this goal, our acquisition strategy specifically focuses on IT consulting companies
that add new services, contracts, and technical capabilities that support our commercial and federal government customer needs and are in
high demand by our customer base.
Our strategic innovation efforts and technology investments focus on putting the best productivity tools in the hands of our recruiters, our
candidates, and our clients, so that it is seamless for clients and billable professionals to work with ASGN. We position our teams to stay at
the forefront of emerging trends in digitization and candidate sourcing, including GenAI technologies that assist teams in creating robust
models around candidate search and match, to best position our businesses and continuously improve how we serve clients and candidates.
3
Competition
We compete with other large publicly-held and privately-owned providers of human capital in the IT consulting and professional services
segments on a local, regional, national, and international basis across the commercial and government end markets. With an industry focus
that is supported by our solutions, our unique deployment model allows us to provide the right services at the right time. Our experienced
engagement leaders and methodologies help our clients solve critical problems and create incremental value for their organizations.
From a talent perspective, we offer more opportunities for the billable professional and are viewed as a better partner for their career
objectives. In addition, competitive factors that attract qualified candidates include salaries and benefits; availability and variety of
opportunities; quality, duration and location of assignments; and responsiveness to requests for placement. Many people seeking contract
employment through us may also be pursuing employment through other means. Therefore, the speed at which we assign prospective
professionals, and the availability of attractive and appropriate projects, are important factors in our ability to fill open positions.
From a client perspective, the principal competitive factors in obtaining and retaining clients are properly assessing the clients’ specific job
and project requirements, the appropriateness of the professionals assigned to the client, the price of services, and monitoring our clients’
satisfaction. Although we believe we compete favorably with respect to these factors and maintain an intimacy and institutional knowledge
with our clients that enables us to successfully compete in the market, we expect competition to continue to increase particularly as we grow
our IT consulting footprint. Nevertheless, our larger total addressable market in IT consulting offers us a greater revenue and margin
opportunity. In addition, unlike our competitors in the traditional consulting space, for the majority of our IT consulting business we do not
rely upon a bench to support us; rather, we use our extensive databases containing our deep labor pool of highly-skilled technical talent to
provide and build teams that offer our clients a full suite of services tailored to their individual needs. This sophisticated project delivery
model offers us a cost advantage over the competition that has previously enabled us to grow above industry averages.
Human Capital
Our workforce is and will always be the core of our business. Our diverse talent pool strengthens our position as a leading IT consulting and
professional services firm, and we aim to recruit exceptional leaders in their respective areas of expertise that support ASGN’s high-
performance, innovative, and collaborative culture. In 2024, we employed approximately 3,200 internal employees, including sales directors,
account managers, recruiters, and corporate office employees. We support our internal employees in a number of ways including, but not
limited to, the following initiatives:
Engagement and Professional Development – Our team is the driving force behind our success, and continuing to support career development
and advancement across our Company remains one of ASGN’s top organizational priorities. We prioritize career growth through ongoing
education, professional development, and comprehensive training. To supplement in-person and virtual training, ASGN maintains a
mentorship program where mentors are provided opportunities to enhance their management and communication skills, while mentees are
given the ability to foster relationships with experienced professionals who can support their career development.
Performance Management & Retention – With regards to career development, we encourage our employees to seek opportunities that align
with their long-term career goals. Communicating career interests and employee development is therefore at the heart of our performance
management process. This is a collaborative process that focuses on developing clear goals at the start of each calendar or employment year
and providing constructive feedback and support throughout the year to position our employees for success. Furthermore, to guide our efforts
on a go-forward basis and drive long-term employee retention, we conduct annual employee engagement surveys. In 2024, we achieved an 85
percent overall participation rate in our employee engagement survey.
Health, Safety, and Well-being – Core to employee retention, we also remain focused on the health and well-being of each of our employees
and consultants. Our employees enjoy competitive compensation and benefits packages, which include medical, dental, and vision plans;
flexible spending accounts; and savings plans. Guided by our Company-wide Employee Wellness and Workplace Health and Safety policies,
we support our employees' emotional well-being and physical health with wellness programming and personal growth workshops.
For more detailed information on our workforce programs and initiatives, please visit the Sustainability section of our website: ASGN.com/
Sustainability. Nothing on our website shall be deemed incorporated by reference into this 2024 10-K.
Government Regulation
We take reasonable steps to ensure that our billable professionals possess all current licenses and certifications required for each placement.
We provide workers’ compensation insurance, unemployment insurance, and professional liability insurance for our employees. For a further
discussion of government regulation associated with our business, see Part I, Item 1A. Risk Factors.
4
Available Information and Access to Reports
We electronically file our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statements,
and all amendments to those reports and statements with the Securities and Exchange Commission ("SEC"). The SEC maintains an internet
site sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the
SEC. You may also read and copy any of our reports that are filed with the SEC by visiting:
•
Our website, asgn.com; or
•
By contacting our Investor Relations Department at info@asgn.com.
Our reports are available through any of the foregoing means and are available free of charge on our website as soon as practicable after such
material is electronically filed with or furnished to the SEC. Also available on our website are copies of our Code of Ethics for the Principal
Executive Officer and Senior Financial Officers, Code of Business Conduct and Ethics, Corporate Governance Guidelines, and the charters
for the committees of our Board. We intend to disclose any amendment to, or waiver from, a provision of our Code of Ethics for our Principal
Executive Officer and Senior Financial Officers on our website promptly after the amendment or waiver has been granted.
Item 1A. Risk Factors
Our business is subject to various risks, including, but not limited to those described below, any of which could adversely affect our results of
operations and financial condition, and as a result, could cause a decline in the trading price of our common stock.
Profitability and Operational Risks
If we are not able to remain competitive in obtaining and retaining clients, our future growth will suffer. Many of our agreements may be
terminated by clients at will and the termination of a significant number of such agreements would adversely affect our revenues and
results of operations.
The IT services industry is highly competitive and fragmented with limited barriers to entry. We compete in national, regional, and local
markets with professional services firms, traditional consulting agencies, and specialized boutique industry or solutions-focused businesses.
The success of our business depends upon our ability to continually secure new long-term consulting projects as well as shorter-term
assignment contracts from clients and to fill them with our billable professionals.
Most of our agreements with clients do not provide for exclusive use of our services and many of our agreements may be terminated at will.
As such, clients are free to place orders with our competitors. If clients terminate a significant number of agreements or do not use us for
future IT services support, we may be unable to generate new work to replace lost revenues. The growth of our business could be adversely
affected, and our revenues and results of operations could be harmed. Specifically with regards to our longer-term consulting contracts,
clients may delay or cancel bookings. This may cause expected revenues to be realized in a later period or not at all. In addition, if we are not
able to comply with performance requirements laid out in the consultant contract, our revenues and client relationships may be adversely
affected. It is therefore imperative to our continued growth that we maintain positive relationships with our clients.
To the extent that competitors seek to gain or retain market share by reducing prices or increasing marketing expenditures, we could lose
revenues and our margins could decline, which could harm our operating results and cause the trading price of our stock to decline. We expect
competition for clients to increase in the future, and the success and growth of our business depends on our ability to remain competitive. In
addition, we participate in a number of third-party contracts as a subcontractor and that requires us to participate in vendor management
contracts, which may subject us to greater risks or lower margins.
If we are unable to attract and retain qualified billable professionals, our business could be adversely affected.
Our business is substantially dependent upon our ability to attract and retain billable professionals who possess the skills, experience,
advanced degrees, certifications, licenses, and clearances which may be required to meet the specified requirements of our clients. We
compete for such billable professionals with other staffing and consulting companies, government contractors, and our clients and potential
clients. There can be no assurance that qualified professionals will be available to us in adequate numbers to staff our temporary assignments
or client projects. Moreover, the employment of our temporary billable professionals is terminable at will and they are often hired to become
regular employees of our clients. Attracting and retaining billable professionals depends on several factors, including our ability to provide
billable professionals with desirable assignments and competitive wages and benefits. The cost of attracting and retaining billable
professionals may be higher than we anticipate if there is an increase in competitive wages and benefits and, as a result, if we are unable to
pass these costs on to our clients, our likelihood of achieving or maintaining profitability could decline. In periods of low unemployment,
there may be a shortage of, and significant competition for, the skilled professionals sought by our clients. If we are unable to attract and
retain a sufficient number of billable professionals to meet client demand, we may be required to forgo revenue opportunities, which may hurt
the growth of our business. In periods of high unemployment, due to a large pool of available candidates, clients are able to directly hire and
recruit qualified candidates without the involvement of our services.
5
Sometimes we utilize subcontractors to provide us with qualified professionals. The subcontractors are generally small companies that may
lack the resources or experience to comply with complex and fluid wage and hour and other laws. A subcontractor’s failure in this regard
could adversely affect our ability to perform and subject us to additional legal liabilities, which could have a material adverse effect on our
relationships with clients and on our results of operations.
Our future performance depends on the Company’s effective execution of our business strategy.
In prior years, we have experienced revenue and earnings growth both organically and through acquisitions. There is no assurance that we
will resume this pace of growth in the future or meet our strategic objectives for growth. Our revenues declined this past year due to adverse
macroeconomic conditions, including an IT industry recession. Our growth could be adversely affected by many other factors, including
future technology industry conditions, macroeconomic events such as inflation, recession, and interest rate increases, competition, and labor
market trends or regulations. If our growth rate continues to decline, or we fail to grow at the pace anticipated and we are unsuccessful in our
growth initiatives and strategies, our financial results could be less than our expectations or those of investors or sell-side research analysts.
Our business strategy is focused on integrating and optimizing our organization, programs, technology, and delivery of services to make us a
more agile and effective competitor, to reduce the cost of operating our business, and to increase our operating profit and operating profit
margin. We may not be successful in our integration and optimization efforts, which may cause us to fail to achieve the cost savings we
anticipate or limit our ability to scale growth. Further, we may fail to prevent the return of costs eliminated in these efforts. If we are not
successful in implementing our integration and optimization efforts, our business, financial condition, and results of operations could be
adversely affected.
Performance under contracts, including those on which we have partnered with third parties, may be adversely affected if we or the third
parties fail to deliver on commitments or otherwise breach obligations to our clients.
Our contracts are complex and, in some instances, may require that we partner with other parties, including software and hardware vendors, to
provide the complex solutions required by our clients. Our ability to deliver the solutions and provide the services required by our clients is
dependent on our and our partners’ ability to meet our clients’ delivery schedules and other expectations. Our partners may at times be
impacted by global events, the changing macroeconomic environment and supply chain disruptions, as well as rapid increases in demand for
their products and services, any of which may impact their ability to provide their products and services within our expected timeframes or at
anticipated prices. If we or our partners fail to deliver services on time, our ability to complete the contracts may be adversely affected.
Our results of operations could be adversely affected if we cannot successfully keep pace with technological changes in the development
and implementation of our services.
Our success depends on our ability to keep pace with rapid technological changes in the development and implementation of our services. We
rely on a variety of technologies to support important functions in our business, including the recruitment, placement and monitoring of our
billable professionals, our billings, and candidate and client data analytics. If we do not sufficiently invest in new technology and industry
developments (such as emerging job and resume posting services), appropriately implement new technologies, or evolve our business at
sufficient speed and scale in response to such developments, or if we do not make the right strategic investments to respond to these
developments, our services, results of operations, and ability to develop and maintain our business could be adversely affected.
We develop and utilize artificial intelligence, including generative artificial intelligence, machine learning, and similar tools and
technologies that collect, aggregate, analyze, or generate data or other materials or content (collectively, “AI”) in connection with our
business.
AI, including GenAI, is a growing component of our business in both the commercial and government markets. We work both internally and
with our enterprise customer base to develop strategic use cases for GenAI technologies. For example, we recently announced a collaboration
with Microsoft to invest in and pilot NextGen AI technologies, including Copilot for Microsoft 365 and Azure OpenAI Service. AI
technologies are complex and rapidly evolving, and we face significant competition, including from our own clients, who may develop their
own internal AI-related capabilities, which in each case, can lead to reduced demand for our services or solutions. As these technologies
evolve, some services and tasks currently performed by our people will likely be replaced by automation.
There are significant risks involved in using AI; for example, AI algorithms may be flawed, insufficient, of poor quality, rely upon incomplete
or inaccurate data, reflect unwanted forms of bias, or contain other errors or inadequacies, any of which may not be easily detectable despite
internal policies and diligence efforts in place to mitigate such deficiencies.
If the AI that we use produces deficient, inaccurate, unethical, or controversial results, or if public opinion of AI is adversely affected due to
actual or perceived risks regarding the usage of AI, we could incur operational inefficiencies, competitive harm, legal liability, brand or
reputational harm, or other adverse impacts on our business and results of operations.
Although we conduct diligence on third-party AI developers, we will not be able to control the manner in which third-party AI technologies
are developed or maintained. Legal and regulatory frameworks related to the use of AI are rapidly evolving worldwide, including due to the
perceived or actual risks of bias, unfair discrimination, transparency, and information security. Furthermore, because AI technology itself is
highly complex and rapidly developing, it is not possible to predict all of the legal, operational, or technological risks that may arise relating
to the use of AI.
6
The failure to prevent a cybersecurity incident affecting our or third-party systems could result in the disruption of our services or the
disclosure or misuse of sensitive information, which could harm our reputation, decrease demand for our services and products, expose us
to liability, penalties, and remedial costs, or otherwise adversely affect our financial performance.
Our daily business operations depend on our information technology systems and third-party systems for a wide variety of functions,
including, among other things, identifying consulting and staffing resources, matching personnel with client assignments, and managing our
accounting and financial reporting functions. In conducting our business, we and certain of our third-party providers routinely collect, retain,
and process data about customers, employees, business partners, and others, including personally identifiable information (PII) on these
systems about our employees and billing professionals and their dependents, as well as sensitive and/or proprietary information belonging to
our business such as trade secrets (collectively, “Confidential Information”). Any information technology systems are at risk of being
compromised, including through malicious activity or human or technological error. Although we devote significant resources to maintain and
regularly upgrade our information security technologies, and we have implemented security controls to help protect the security and privacy
of our business information on-premise and in the cloud, our and third-party information technology systems’ confidentiality, integrity, and
availability are subject to cybersecurity risks from diverse threat actors, such as state-sponsored organizations, opportunistic hackers and
hacktivists, as well as through diverse attack vectors, such as potential security breaches through third-party service providers, employee
negligence, fraud or misappropriation, business email compromise and cybersecurity threats, including denial of service attacks, viruses,
ransomware, social engineering/phishing, other malicious software programs, and as a result of malicious code embedded in open-source
software, or misconfigurations, bugs or other vulnerabilities in commercial software that is integrated into our or our service providers’ IT
systems, products or services. Successful cyberattacks can result in third parties gaining unauthorized access to our information technology
systems for purposes of misappropriating assets or confidential information, corrupting data, or causing operational disruption. We are
continuously exposed to unauthorized attempts to compromise the confidentiality, integrity, and availability of our IT systems and
Confidential Information through cyber attacks, insider threats and other information security threats, including physical break-ins and
malicious insiders, and we have, from time to time, experienced security incidents. Moreover, we have acquired and continue to acquire
companies with cybersecurity vulnerabilities and/or unsophisticated security measures, which exposes us to significant cybersecurity,
operational, and financial risks. Remote and hybrid working arrangements at our company (and at many third-party providers) also increase
cybersecurity risks due to the challenges associated with managing remote computing assets and security vulnerabilities that are present in
many non-corporate and home networks. Additionally, any integration of artificial intelligence in our or any service providers’ operations,
products or services is expected to pose new or unknown cybersecurity risks and challenges. Because our products and services are integrated
with our customers’ systems and processes, any circumvention or failure of our cybersecurity defenses or measures could compromise the
confidentiality, integrity, and availability of our customers’ own IT systems or Confidential Information as well.
Any security incident that results in the compromise of the confidentiality, integrity, and availability of our IT systems and Confidential
Information we collect and retain, or that otherwise disrupts or negatively impacts our operations, could harm our reputation, lead to customer
or employee attrition, and expose us to regulatory enforcement action or litigation (including class actions). Because the techniques used in
cyber attacks change frequently and threat actors are becoming increasingly sophisticated in using techniques and tools—including artificial
intelligence—that circumvent security controls, evade detection and remove forensic evidence, despite maintaining robust detection and
remediation efforts, we may face difficulties in detecting, investigating, remediating or recovering from future attacks or incidents, or to avoid
a material adverse impact to our IT systems, Confidential Information or business. In addition, our information technology systems are
vulnerable to fire, storm, flood, power loss, computer and network failures, problems with transitioning to upgraded or replacement systems
or platforms, flaws in third-party software or services, terrorist attacks, and similar events. All of these risks are also applicable wherever we
rely on outside vendors to provide services. We cannot guarantee that any costs and liabilities incurred in relation to an attack or incident will
be covered by our existing insurance policies or that applicable insurance will be available to us in the future on economically reasonable
terms or at all. For information on our cybersecurity risk management, strategy, and governance, see Item 1C. Cybersecurity.
We may not successfully make or integrate acquisitions, which could harm our business and growth.
As part of our growth strategy, we have made numerous acquisitions, and we intend to continue to pursue select acquisitions in the future,
including the acquisition of TopBloc, LLC, which we announced on February 4, 2025, subject to regulatory approval. We compete with other
companies for acquisition opportunities and there can be no assurance that we will be able to successfully identify suitable acquisition
candidates or be able to complete future acquisitions on favorable terms, if at all. In making acquisitions, we may pay substantial amounts of
cash, incur debt, or issue securities to finance our acquisitions, which would adversely affect our liquidity or capital resources or result in
dilution to our stockholders. There also can be no assurance that we will realize the benefits expected from any transaction or receive a
favorable return on investment from our acquisitions.
The integration of an acquisition involves a number of factors that may affect our operations. These factors include diversion of
management’s attention from other business concerns, difficulties or delay in the integration of acquired operations, retention of key
personnel, significant unanticipated costs or legal liabilities, and tax and accounting issues. Furthermore, once we have integrated an acquired
business, the business may not achieve anticipated levels of revenue, profitability or productivity, or otherwise perform as expected. Any of
these factors may have a material adverse effect on our results of operations and financial condition.
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An impairment in the carrying amount of goodwill and other intangible assets could require a write-down that materially and adversely
affects our results of operations and net worth.
As of December 31, 2024, we had $1.9 billion of goodwill and $439.8 million of net acquired intangible assets. We review goodwill and
indefinite-lived trademarks for impairment at least annually, and when events or changes in circumstances indicate that the carrying amount
may not be recoverable. Intangible assets having finite lives are amortized over their useful lives and are tested for recoverability whenever
events or changes in circumstances indicate that the carrying amount may not be recoverable. We may be required to record a charge, which
could be material, in our financial statements during the period in which we determine an impairment has occurred. Impairment charges could
materially and adversely affect our results of operations in the periods that such charges are recorded.
Failure to comply with the terms of our debt agreements could affect our operating flexibility.
Our outstanding debt at December 31, 2024 included a term loan of $493.8 million under our senior secured credit facility due 2030, and
$550.0 million of 4.625% unsecured senior notes due 2028. We have a $500.0 million senior secured revolving credit facility due 2028,
which is fully available as of December 31, 2024. Our term loan has a variable interest rate, making us vulnerable to increases in interest
rates. Additionally, we use a portion of our cash provided by operations for interest payments on our debt rather than for our operations.
Our failure to comply with restrictive covenants under our debt instruments could result in an event of default, which, if not cured or waived,
could result in the requirement to repay such borrowings before their due date. Some covenants are tied to our operating results and thus may
be breached if we do not perform as expected. We expect to use cash on hand and cash provided by operations to pay our expenses and repay
our debt. If we do not have enough cash, we may be required to refinance all or part of our existing debt, sell assets or borrow additional
funds. The lenders may require fees and expenses to be paid or other changes to terms in connection with waivers or amendments. If we
refinance these borrowings on less favorable terms or our costs and/or the interest rates on our outstanding debt increase, our results of
operations and financial condition could be adversely affected by increased costs and/or rates.
U.S. and global market and economic developments could adversely affect our business, financial condition, and results of operations.
Demand for the IT services and solutions that we provide is significantly affected by global market and economic conditions, including
recessions, inflation, interest rates, tax rates, and economic uncertainty. Our business is particularly susceptible to economic conditions in the
United States where our clients or operations are concentrated. As economic activity slows, many clients or potential clients reduce their use
of and reliance upon billable professionals, which reduces the demand for the Company’s services and could significantly decrease the
Company’s revenues and profits. During periods of reduced economic activity, we may also be subject to increased competition for market
share and pricing pressure. As a result, any significant economic downturn in the United States or other countries in which we operate could
have a material adverse effect on our business, financial condition, and results of operations.
Natural disasters, the effects of climate change, pandemics, and other events beyond our control could harm our business.
Natural disasters or other catastrophic events may cause damage or disruption to our operations, international commerce, and the global
economy, and thus could have a negative effect on us. Our business operations are subject to interruption from earthquakes, hurricanes,
tornadoes, floods, fires, severe weather, power shortages, pandemics and other public health concerns, terrorism, political unrest,
telecommunications failure, vandalism, cyber-attacks, geopolitical instability, war and other actual or threatened military conflicts, the effects
of climate change, actions taken by the U.S. or other governments in response to any of the foregoing, and other events beyond our control.
Although we maintain disaster recovery plans, such events could disrupt our operations or those of our customers and suppliers, including
through the inability of employees and billable professionals to work, destruction of facilities, loss of life, and adverse effects on supply
chains, power, infrastructure and the integrity of information technology systems, any of which could materially increase our costs and
expenses, delay or decrease revenue from our customers, disrupt our ability to maintain business continuity, or otherwise have a material
adverse effect on our business, results of operations, financial condition, and prospects. Further, our insurance may not be sufficient to cover
losses or additional expenses that we may sustain. In addition, we could incur significant costs to improve the climate-related resiliency of our
infrastructure and otherwise prepare for, respond to, and mitigate the effects of climate changes.
Our business relies heavily on the health and safety of our employees, billable professionals, and customers. The impact of a health crisis such
as a pandemic on our business, operations, and future financial performance could include, but is not limited to, adverse impacts to our
operating income, operating margin, net income, earnings per share and operating cash flows, as expenses may not decrease at the same rate
as revenues decline. In addition, our quarterly and annual revenue growth rates and expenses as a percentage of our revenues may differ
significantly from our historical rates, and our future operating results may fall below expectations.
Our environmental, social and governance (ESG) commitments and disclosures may expose us to reputational risks and legal liability.
We, as with other companies, face scrutiny related to our environmental, social and governance (“ESG”) practices and disclosures required or
made by certain customers, employees, investors, shareholder advocacy groups, federal, state, and local governments, and other stakeholders.
With this increased focus, public reporting of ESG practices has become commonplace. Requirements to report on our ESG practices may
therefore result in increased costs, enhanced compliance or disclosure obligations, or other adverse impacts on our business, financial
condition, or results of operations. At the request of our clients, we have reported on various disclosure frameworks and standards, and the
interpretation or application of those frameworks and standards may change from time to time or may not meet the expectations of our clients,
investors or other stakeholders.
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Furthermore, our processes and controls for reporting ESG matters across our operations and supply chain are evolving along with multiple
disparate standards for identifying, measuring, and reporting ESG metrics, including ESG-related disclosures that may be required by various
regulators. Such standards may change over time, which could result in significant revisions to our current goals, reported progress in
achieving such goals, or ability to achieve such goals in the future.
Risks Related to Government Contracts
We may not realize the full value of our Federal Government Segment contract backlog, which may result in lower revenues than
anticipated.
Contract backlog, which was $3.1 billion at December 31, 2024, is a useful measure of potential future revenues for our Federal Government
Segment. Contract backlog consists of contracts for which funding has been formally awarded (funded backlog of $0.5 billion at December
31, 2024) and unfunded backlog, which represents the estimated future revenues to be earned from negotiated contract awards for which
funding has not been awarded, and from unexercised contract options (unfunded backlog of $2.6 billion at December 31, 2024). The U.S.
government’s ability to not exercise contract options, to reduce orders, or to modify, curtail or terminate our contracts, makes the calculation
of our Federal Government Segment contract backlog subject to numerous uncertainties. Due to the uncertain nature of our contracts with the
U.S. government, we may never realize revenue from some of the contracts that are included in our contract backlog.
Changes in U.S. government spending or budgetary priorities, the failure of government budgets to be approved on a timely basis, or
delays in contract awards and other procurement activity may significantly and adversely affect our future financial results.
Our business depends upon continued U.S. government expenditures on cybersecurity, cloud and enterprise IT, AI/ML, digital
transformation, and other programs that we support. During 2024, revenues from contracts directly with U.S. federal government agencies
were 24 percent of consolidated revenues. All of our government contracts can be terminated by the U.S. government either for its
convenience or if we default by failing to perform under the contract. The U.S. government conducts periodic reviews of U.S. defense
strategies and priorities, which may shift Department of Defense budgetary priorities, reduce overall spending, or delay contract or task order
awards for defense-related programs from which we would otherwise expect to derive a significant portion of our future revenues. Any of
these changes could impair our ability to obtain new contracts or contract renewals. Any new contracting requirements or procurement
methods could be costly or administratively difficult for us to implement. Our revenues, cash flows, and operating results could be adversely
affected by spending caps or changes in budgetary priorities, as well as by delays in the government budget process, program starts, the award
of contracts or task orders under contracts, or by a government shutdown. Considerable uncertainty exists regarding how future budget and
program decisions will unfold, including the spending priorities of the U.S. government and the uncertainty related to the administration's
efforts to improve efficiency. Because the U.S. Congress did not complete a budget before the end of the 2024 fiscal year, government
operations are currently being funded through short-term continuing resolutions. These continuing resolutions authorize agencies of the U.S.
government to continue to operate, but do not authorize new spending initiatives. When the U.S. government operates under a continuing
resolution, contract awards may be delayed, canceled, or funded at lower levels which could adversely impact our operations, cash flows, and
financial results. Failure to complete a budget for fiscal year 2025 or to provide for another continuing resolution by applicable deadlines may
result in a federal government shutdown, which could cause us to incur labor or other costs without reimbursement under customer contracts
or the delay or cancellation of key programs, and could adversely impact our operations, cash flows, and financial results.
We derive significant revenues from contracts and task orders awarded through a competitive bidding process. Our revenues and
profitability may be adversely impacted if we fail to compete effectively in such processes.
Our contracts and task orders with the federal government are awarded through a competitive bidding process, which creates significant
competition and pricing pressure. We spend time and resources to prepare bids and proposals for contracts. Some of these contracts may not
be awarded to us or, if awarded, we may not receive meaningful task orders under these contracts. We may encounter delays and additional
expenses if our competitors protest or challenge contracts awarded to us in competitive bidding, and any such protest or challenge could result
in the resubmission of bids on modified specifications, or in the termination, reduction, or modification of the awarded contract. If we are
unable to win particular contracts, we may be prevented from providing services to customers that are purchased under those contracts for a
number of years. In addition, upon the expiration of a contract, if the customer requires further services of the type provided by the contract,
there is frequently a competitive rebidding process. There can be no assurance that we will win any particular bid, or that we will be able to
replace business lost upon expiration or completion of a contract, and the termination or non-renewal of any of our significant contracts could
cause our actual results to differ materially and adversely from those anticipated.
Our earnings and profitability may vary based on the mix of our contracts and may be adversely affected by our failure to accurately
estimate and manage costs, time, and resources.
Our Federal Government Segment generates revenues under various types of contracts: firm-fixed-price, cost reimbursable, and time and
materials. Our earnings and profitability may vary materially depending on changes in the proportionate amount of revenues derived from
each type of contract. Under firm-fixed-price contracts, we perform specific tasks and services for a fixed price. Compared with cost
reimbursable, firm-fixed-price contracts generally offer higher margin opportunities, but involve greater financial risk because we bear the
impact of cost overruns. Failure to accurately estimate costs, resources, and technology needed to perform our contracts or to effectively
manage and control our costs during the performance of work could result in reduced profits or in losses. Under cost reimbursable contracts,
we are reimbursed for allowable costs plus a profit margin or fee. These contracts generally have lower profitability and less financial risk.
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Under time and materials contracts, we are reimbursed for labor at negotiated hourly billing rates and for certain expenses. We assume
financial risk on time and materials contracts because we assume the risk of performing those contracts at negotiated hourly rates.
A significant loss or suspension of our facility or employee security clearances with the federal government could lead to a reduction in
our revenues, cash flows, and operating results.
We act as a contractor and a subcontractor to the U.S. federal government and many of its agencies. Some government contracts require us to
maintain facility security clearances and require some of our employees to have advanced degrees and/or to maintain individual security
clearances. If we are unable to attract or retain qualified employees, our employees lose or are unable to timely obtain security clearances, or
we lose a facility clearance, a government agency client may terminate the contract or decide not to renew it upon its expiration. In addition, a
security breach by us could cause serious harm to our business, damage our reputation, and prevent us from being eligible for further work on
sensitive or classified systems for federal government clients.
We are required to comply with numerous laws and regulations related to government contracts, some of which are complex, and our
failure to comply could result in fines or civil or criminal penalties, or suspension or debarment, which could materially and adversely
affect our results of operations.
We must comply with laws and regulations relating to the formation, administration, and performance of federal government contracts. These
laws and regulations affect how we conduct business with our federal government customers. Such laws and regulations may potentially
impose added costs on our business and our failure to comply with them may lead to civil or criminal penalties, termination of our U.S.
government contracts, and/or suspension or debarment from contracting with U.S. government agencies. All of our U.S. government contracts
can be terminated by the U.S. government either for its convenience or if we default by failing to perform under the contract. Termination for
convenience provisions provide only for our recovery of costs incurred or committed settlement expenses and profit on the work completed
prior to termination. Termination for default provisions provide for the contractor to be liable for excess costs incurred by the U.S.
government in procuring undelivered items from another source and could damage our reputation and impair our ability to compete for future
contracts. Failure to comply with regulations and required practices and procedures could harm our reputation or influence the award of new
contracts.
We depend on our teaming arrangements and relationships with other contractors and subcontractors. If we are not able to maintain
these relationships, or if these parties fail to satisfy their obligations to us or the customer, our revenues, profitability, and growth
prospects could be adversely affected.
We rely on teaming relationships with other prime contractors and subcontractors in order to submit bids for large procurements or other
opportunities where we believe the combination of services, products, and solutions provided by us and our teammates will help us to win and
perform the contract. Our future revenues and growth prospects could be adversely affected if other contractors eliminate or reduce their
contract relationships with us, or if the U.S. government terminates or reduces these other contractors’ programs, does not award them new
contracts, or refuses to pay under a contract. We may have disputes with our subcontractors arising from, among other things, the quality and
timeliness of work performed by the subcontractor, customer concerns about the subcontractor, our failure to extend existing task orders or
issue new task orders under a subcontract, our hiring of a subcontractor’s personnel, or the subcontractor’s failure to comply with applicable
law. If any of our subcontractors fail to satisfactorily perform the agreed-upon services or have regulatory compliance or other problems, our
ability to fulfill our obligations as a prime contractor or higher tier subcontractor may be jeopardized. When we are in the role of a
subcontractor, we often lack control over fulfillment of a contract, and poor performance on the contract could impact our customer
relationship, even when we perform as required. Moreover, our revenues and operating results could be adversely affected if any prime
contractor chose to offer directly to the customer services of the type that we provide, or if they team with other companies to provide those
services.
Audits by U.S. government agencies for contracts with federal government clients could result in unfavorable audit results that could
subject us to a variety of penalties and sanctions and could harm our reputation and relationships with our customers and adversely
impact results of operations.
Federal government agencies, including the Defense Contract Audit Agency and the Defense Contract Management Agency, routinely audit
and investigate government contracts and government contractors’ administrative processes and systems. These agencies review our
performance on contracts, pricing practices, cost structure, and compliance with applicable laws, regulations, and standards. Any costs found
to be improperly allocated to a specific contract will not be reimbursed, while such costs already reimbursed must be refunded. If a
government audit uncovers improper or illegal activities, we may be subject to civil and criminal penalties and administrative sanctions,
including termination of contracts, forfeiture of profits, suspension of payments, fines, and suspension or debarment from doing business with
federal government agencies in the future.
Legal and Regulatory Risks
Significant legal actions, claims or investigations could subject us to substantial uninsured liabilities, result in damage to our business
reputation, result in the discontinuation of our client relationships, and adversely affect our recruitment and retention efforts.
We employ people internally and in the workplaces of other businesses. Our ability to control or influence the workplace environment of our
clients is limited. Further, many of the individuals that we place with our clients have access to client information systems and confidential
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information. As the employer of record of our billable professionals, we incur a risk of liability due to the actions of our billable professionals
at client sites or with client information and systems, and to our billable professionals for various workplace events, including claims of
physical injury, discrimination, harassment, or failure to protect confidential personal information. Other inherent risks include possible
claims of errors and omissions, claims related to acquisitions and their earn-outs, intentional misconduct, release, misuse or misappropriation
of client intellectual property, criminal activity, torts, or other claims. We have been and could, in the future, be subject to large collective,
class, or Private Attorneys General Act ("PAGA") actions alleging violation of wage and hour laws. These types of actions typically involve
substantial claims and significant defense costs. We also have been subject to legal actions alleging vicarious liability, negligent hiring,
discrimination, sexual harassment, retroactive entitlement to employee benefits or pay, retaliation, and related legal theories. We may be
subject to liability in such cases even if the contribution to the alleged injury was minimal. Moreover, in most instances, we are required to
indemnify clients against some or all of these risks if they are caused by us or our employees, and we could be required to pay substantial
sums to fulfill our indemnification obligations.
A failure of any of our employees internally, or billable professionals in clients' workplaces, to observe our policies and guidelines intended to
reduce these risks could result in negative publicity, injunctive relief, investigations and/or charges, payment of monetary damages or fines, or
other material adverse impacts on our business. Claims raised by clients stemming from the improper actions of our billable professionals,
even if without merit, could cause us to incur significant expense associated with the costs or damages related to such claims. Further, such
claims by clients could damage our business reputation and result in the discontinuation of client relationships. Any associated negative
publicity could adversely affect our ability to attract and retain clients and qualified billable professionals in the future.
We proactively address many of these issues with our robust compliance program. Further, to protect ourselves from the costs and damages of
significant legal actions and claims, we maintain workers’ compensation, errors and omissions, cybersecurity, employment practices, and
general liability insurance coverage in amounts and with deductibles that we believe are appropriate for our operations. Our insurance policies
include a retention amount and may not cover all claims against us or continue to be available to us at a reasonable cost. In addition, we face
various employment-related risks not covered by insurance, such as wage and hour laws and employment tax responsibility. If we do not
maintain adequate insurance coverage or are made party to significant uninsured claims, we may be exposed to substantial liabilities that
could have a material adverse impact on our results of operations and financial condition.
Our business is subject to government regulation, which in the future could restrict the types of employment services we are permitted to
offer or result in additional or increased costs that reduce our revenues and earnings.
The IT services and solutions industry is regulated in the United States and other countries in which we operate. We are subject to federal,
state, and local laws and regulations governing the employer/employee relationship, such as those related to payment of federal, state, and
local payroll and unemployment taxes for our corporate employees and billable professional employees, tax withholding, social security or
retirement benefits, licensing, wage and hour requirements, paid sick leave, paid family leave and other leaves, employee benefits, pay equity,
non-discrimination, sexual harassment, and workers’ compensation; and we must further comply with immigration laws and a wide variety of
notice and administrative requirements, such as record keeping, written contracts, notification, and reporting. We are also subject to U.S. laws
and regulations relating to government contracts with federal agencies. In certain other countries, we may not be considered the legal
employer of our temporary personnel, however we are still responsible for collecting taxes and social security deductions and transmitting
these amounts to the taxing authorities.
In addition, we receive, store, use and otherwise process information that relates to individuals and/or constitutes “personal information” or
similar terms under applicable data privacy laws, including from and about our employees and business contacts. We also depend on a
number of third-party vendors in relation to the operation of our business, a number of which process personal information on our behalf. We
and our vendors are subject to data privacy, protection, and security laws, rules, regulations, industry standards and other requirements,
including the European General Data Protection Act ("GDPR") and the U.K.’s Data Protection Act 2018 (which implements the GDPR into
U.K. law). These laws impose stringent data protection requirements on personal information and provide for significant penalties for
noncompliance. These laws impact our U.S. operations as well as our European operations as they apply not only to third-party transactions,
but also to transfers of information among the Company and its subsidiaries. Certain U.S. states such as California have also enacted data
privacy laws imposing requirements including security measures for personal information. The application and interpretation of data privacy
laws are constantly evolving and are subject to change, creating a complex compliance environment. In some cases, these requirements may
be either unclear in their interpretation and application or they may have inconsistent or conflicting requirements with each other. Further,
there has been a substantial increase in legislative activity and regulatory focus on data privacy and security in the United States and
elsewhere, including in relation to cybersecurity incidents. Any non-compliance or perceived non-compliance with the data privacy laws
applicable to our business could result in legal claims or proceedings (including class actions), governmental enforcement actions and
investigations, fines, and other penalties that could potentially have an adverse effect on our operations and reputation.
Future changes in the laws or governmental regulations affecting our business may result in the prohibition or restriction of certain types of
employment services that we are permitted to offer, or the imposition of new or additional compliance requirements that could increase our
costs and reduce our revenues and earnings. Due to the substantial number of state and local jurisdictions in which we operate, there also is a
risk that we may be unable to adequately monitor actual or proposed changes in, or the interpretation of, the laws or governmental regulations
of such states and localities. Any delay in our compliance with changes in such laws or governmental regulations could result in potential
fines, penalties, or other sanctions for non-compliance. In addition, although we may elect to bill some or all of any additional costs to our
customers, there can be no assurances that we will be able to increase the fees charged to our customers in a timely manner and in a sufficient
amount to fully cover any increased costs as a result of future changes in laws or government regulations.
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Our business may be materially affected by changes to fiscal and tax policies that could adversely affect our results of operations and cash
flows.
Our business is subject to taxation in the United States and the foreign jurisdictions where we operate. Due to economic and political
conditions, tax rates in various jurisdictions may be subject to significant change. Our future effective tax rates could be affected by changes
made by the current administration in the United States and in the mix of earnings in countries with differing statutory tax rates or by changes
in the tax laws or their interpretation.
Various levels of government also are increasingly focused on tax reform and other legislative action to increase tax revenue. Further changes
in tax laws in the United States or foreign jurisdictions where we operate, or in the interpretation of such laws, could have a material adverse
effect on our business, results of operations, financial condition, or cash flows.
We are subject to various business and regulatory risks associated with international operations, which could increase our costs, cause
our results of operations to fluctuate, and adversely affect our business.
We conduct business outside the United States primarily in Canada and Europe, and we have delivery centers in Mexico and India. Our
international operations, which represented approximately two percent of our consolidated revenues in 2024, expose us to, among other
things, operational, regulatory, and political risks in the countries in which we operate.
General Risks
The loss of key members of our senior management team, as well as failure to develop the next generation of future leaders, could
adversely affect the execution of our business strategy and our financial results.
We believe that the successful execution of our business strategy and our ability to build upon our business and acquisitions of new
businesses depends on the continued employment of key members of our senior management team and maintaining good succession plans for
their retirement or other departure. If we cannot attract and retain qualified personnel or effectively implement appropriate succession plans, it
could have a material adverse impact to our business, financial condition, and/or results of operations. We have provided short-term and long-
term incentive compensation to our key management in an effort to retain them, and have prepared succession plans at such time as their
employment ends. However, if members of our senior management team become unable or unwilling to continue in their present positions, or
our succession plans are not adequate, we could incur significant costs and experience business disruption related to time spent on efforts to
replace them, and our financial results and our business could be adversely affected. Additionally, we must continue to recruit, train, and
develop management team members in order to achieve our current business objectives and execute on our succession plans. A failure to
support leadership excellence through adequate resources, expectations and training required for growth or in the event of the loss of key
members of our senior management team could jeopardize our ability to meet our business performance expectations and adversely affect our
financial results.
Failure of internal controls may leave us susceptible to errors and fraud.
Management does not expect that our disclosure controls and internal controls will prevent all errors and all fraud. A control system, no
matter how well conceived and operated, can provide only reasonable assurance that the objectives of the control system are met.
Furthermore, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all
control issues and instances of fraud, if any, would be detected, particularly in our newly acquired companies and international operations. If
our internal controls are unsuccessful, our business and results of operations could be adversely affected.
The trading price of our common stock has experienced significant volatility.
The market price of our stock has fluctuated substantially in the past and could fluctuate substantially in the future, based on a variety of
factors, including our operating results; announcements of changes in government priorities; changes in general conditions in the economy
and/or the staffing and consulting industries; announcements by our competitors; involvement in a significant litigation matter; a major
change in our management; and short sales, hedging, and other derivative transactions in shares of our common stock. In addition, the stock
market in general has experienced historical volatility that is unrelated to the operating performance of our Company. Broad market and
industry fluctuations may adversely affect the market price of our common stock, regardless of our operating results. Among other things,
volatility in our stock price could mean that investors will not be able to sell their shares at or above the prices they pay. The volatility also
could impair our ability in the future to offer common stock as a source of additional capital or as consideration in the acquisition of other
businesses, or as compensation for our key employees.
Provisions in our corporate documents and Delaware law may delay or prevent a change in control that our stockholders consider
favorable.
Provisions in our certificate of incorporation and bylaws could have the impact of delaying or preventing a change of control or changes in
our management. These provisions include the following:
•
Our Board has the right to elect directors to fill a vacancy in the Board upon the resignation, death, or removal of a director, which
prevents stockholders from being able to fill vacancies on our Board until the next applicable annual meeting of stockholders.
12
•
Stockholders must provide advance notice to nominate individuals for election to the Board or to propose matters that can be acted
upon at a stockholders’ meeting. Further, our Board is divided into three classes and only one class is up for election each year.
These provisions may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own
slate of directors or otherwise attempting to obtain control of us.
•
Our Board may issue, without stockholder approval, up to one million shares of undesignated or "blank check" preferred stock. The
ability to issue undesignated or "blank check" preferred stock makes it possible for our Board to issue preferred stock with voting or
other rights or preferences that could impede the success of any attempt by, or make it more difficult for, a third party to acquire us.
As a Delaware corporation, we are also subject to certain Delaware anti-takeover provisions, including Section 203 of the Delaware General
Corporation Law. Under these provisions, a corporation may not engage in a business combination with any large stockholders who hold 15
percent or more of our outstanding voting capital stock in a merger or business combination unless the holder has held the stock for three
years, the Board has expressly approved the merger or business transaction, or at least two-thirds of the outstanding voting capital stock not
owned by such large stockholder approves the merger or the transaction. These provisions of Delaware law may have the impact of delaying,
deferring, or preventing a change of control and may discourage bids for our common stock at a premium over its market price. In addition,
our Board could rely on these provisions of Delaware law to discourage, prevent, or delay an acquisition of us.
Item 1B. Unresolved Staff Comments
Not applicable.
Item 1C. Cybersecurity
A process for assessing, identifying, and managing cybersecurity related risks is integrated into our overall enterprise risk management
(“ERM”) process. Cybersecurity related risks are included in the risk universe that the ERM process participants evaluate to assess top risks
to the Company on an annual basis. The Audit Committee of the Board oversees the ERM annual risk assessment. Furthermore, as a digital
innovation and transformation company, we are committed to our ever-evolving cyber protocols that safeguard our people, clients, and data.
Every year, we assess our approach to information and physical security, risk management, incident response, business continuity
management, and personal data privacy and protection.
ASGN takes an enterprise approach to data protection and cybersecurity, focusing on continual process and technology improvements to
enable safety, security, and information privacy. All ASGN brands align to the Department of Defense’s Cybersecurity Maturity Model
Certification (“CMMC”) 2.0 framework and have implemented common technology and data protection and cybersecurity controls and
processes, which provides a unified approach to our cybersecurity measures. This does not imply that we meet any particular technical
standards, specifications, or requirements, only that we use the CMMC 2.0 framework as a guide to help us identify, assess, and manage
cybersecurity risks relevant to our business. We have invested in endpoint protection, cloud security, vulnerability management, and data loss
prevention, featuring insider threat detection, we also conduct regular threat actor risk assessments and assess the risk posed by third-party
vendors. Further, ASGN conducts penetration tests to detect potential security gaps in cloud and on-premise systems. These tests continuously
simulate cyber-attacks on physical hardware, network endpoints, and critical applications such as Oracle, SQL and web services.
ASGN maintains a vigilant approach to cybersecurity and operational readiness, with cybersecurity practices designed to reduce the impact of
any incident. ASGN has business continuity and disaster recovery policies. Our plans are tested annually to confirm critical business functions
can continue with minimal disruption in unforeseen circumstances.
We conduct regular internal and external audits to adhere to our security policies and procedures and identify improvement areas. Our audits
include: annual audits conducted by third-party service providers, internal audits, compliance audits, risk assessments, and incident response
audits. In addition to these audits, ASGN collaborates with industry partners, law enforcement agencies, and government organizations to
share intelligence and best practices related to cybersecurity. This collaboration helps us stay ahead of emerging threats and continuously
improve our security posture.
In 2024, ASGN has not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have
materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or
financial conditions.
Governance
ASGN’s data protection and cybersecurity governance structure enables transparency and visibility to key stakeholders: the Company's Board
and its Strategy and Technology and Audit Committees, and the Company's Chief Executive Officer. The Board's Strategy and Technology
Committee focuses on technology and cybersecurity, while the Board's Audit Committee reviews data security breaches or other issues. Each
committee reports to the full Board regarding its activities, including those related to cybersecurity. The full Board also receives briefings
from management on our cyber risk management program. Board members receive presentations on cybersecurity topics from the Company's
chief information officers across our brands ("CIOs") and external experts as part of the Board's continuing education on topics that impact
public companies.
13
Two key enabling bodies, ASGN’s Enterprise Security Council ("Council") and the Security Operations Center (“SOC”), have primary
responsibility for our overall cybersecurity risk management program and provide the structure necessary to set policy and direction as well as
operationalize our required security posture.
•
The Council includes the CIOs and is led by the Chief Information Security Officer ("CISO"). Our CISO joined the Company in 2018
in connection with the acquisition of ECS Federal, LLC ("ECS") and has decades of experience in oversight of cybersecurity
operations. Collectively, the Council represents ASGN and its brands, and reports to the Chief Executive Officer and the Board's
Strategy and Technology Committee. The Council members bring a wealth of experience in security operations, business process re-
engineering, software development, ERP systems, and the management of multinational wide area networks. Complementing this
expertise, the Council also includes a dedicated team of Cybersecurity Information Security Professionals, consisting of brand-specific
system engineers and security administrators. The Council's primary mandate is to formulate comprehensive data protection and
cybersecurity policies for ASGN, oversee the management of emerging security threats, proactively mitigate security risks, and
safeguard our valuable assets.
•
ECS, ASGN’s Federal Government Segment, plays a vital role in safeguarding ASGN through its essential security control function.
Serving as a managed services provider for both clients and internal operations, ECS oversees the SOC which is dedicated to
monitoring, detecting, and responding to cybersecurity threats across our organization. Operating 24 hours a day, seven days a week,
our SOC diligently filters system logs, leveraging proprietary AI/ML tools to identify global threats. We conduct continuous active
hunts and forensic analysis inspections on our network, proactively seeking out malware and intrusions.
Item 2. Properties
As of December 31, 2024, we leased office space in the following locations. We believe that our facilities are suitable and adequate for our
current operations.
Location
Square Feet
Lease Expiration
ASGN and Commercial Segment Headquarters
Richmond, Virginia
78,000
April 2027
Federal Government Segment Headquarters
Fairfax, Virginia
46,200
November 2029
Branch offices (1)
United States, Canada, and United
Kingdom
628,700
January 2025 through
March 2033
Delivery Centers
Mexico and India
84,700
June 2025 through
December 2027
___________________
(1) We have approximately 100 branch office locations that occupy spaces ranging from approximately 1,668 to 40,839 square feet with lease terms that range from one year to 13.3
years.
Item 3. Legal Proceedings
We are involved in various legal proceedings, investigations, claims, and litigation arising in the ordinary course of business, including
collective class and PAGA actions alleging violations of wage and hour laws. However, based on the facts currently available, we do not
believe that the disposition of matters that are pending or asserted will have a material effect on our financial position, results of operations, or
cash flows.
Item 4. Mine Safety Disclosures
Not applicable.
14
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Common Stock — Our common stock is listed on the New York Stock Exchange, or NYSE, under the symbol ASGN. At February 14, 2025
we had 43.6 million shares outstanding, 22 holders of record and an indeterminate number of beneficial owners of our common stock held
through brokers and other intermediaries.
Dividend Information — Since inception, we have not declared or paid any cash dividends on our common stock, and we have no present
intention of paying any dividends on our common stock in the foreseeable future. Our Board periodically reviews our dividend policy to
determine whether the declaration of dividends is appropriate. The terms of our credit facility restrict our ability to pay dividends. The
restriction is variable based upon our leverage ratio and certain other circumstances, as outlined in the agreement.
Securities Authorized for Issuance Under Equity Compensation Plan — Our equity compensation plan information required by this items is
incorporated by reference to the information in Part III, Item 12 of this 2024 10-K.
Stock Performance Graph — The following graph compares the performance of ASGN’s common stock price during the period from
December 31, 2019 to December 31, 2024 with the composite prices of companies (i) listed on the NYSE, (ii) included in the SIC Code No.
7389—Business Services, Not Elsewhere Classified ("Business Services"), and (iii) included in the SIC Code No. 736—Personnel Supply
Services Companies ("Personnel Supply Services"). The graph depicts the results of investing $100 on December 31, 2019, and assumes that
dividends were reinvested, where applicable, during the period. The comparisons shown in the graph below are based upon historical data,
and we caution stockholders that the stock price performance shown in the graph below is not indicative of, nor intended to forecast, potential
future performance.
Comparison of Cumulative Total Return
ASGN Incorporated
Business Services
Personnel Supply Services
NYSE Market Index
2019
2020
2021
2022
2023
2024
$80.00
$100.00
$120.00
$140.00
$160.00
$180.00
At December 31,
2019
2020
2021
2022
2023
2024
ASGN
$
100.00
$
117.70
$
173.88
$
114.81
$
135.51
$
117.43
Business Services
$
100.00
$
135.14
$
112.13
$
86.02
$
109.50
$
125.59
Personnel Supply Services
$
100.00
$
106.69
$
142.56
$
105.25
$
115.77
$
85.28
NYSE Market Index
$
100.00
$
106.99
$
129.11
$
117.04
$
133.16
$
154.19
15
Recent Sales of Unregistered Securities — None.
Common Stock Repurchases — On April 24, 2024, the Company announced that the Company's Board had approved a new stock repurchase
program under which the Company may repurchase $750.0 million of its common stock over the following two years and prior authorization
amounts were cancelled. Under terms of the program, purchases can be made in the open market or under a Rule 10b5-1 trading plan. The
stock repurchase program does not obligate the Company to acquire any particular amount of the Company's stock and may be suspended at
any time at the Company's discretion.
The Company's repurchases of its common stock during the three months ended December 31, 2024, and the approximate dollar value of
shares that may be purchased under the program as of December 31, 2024, are shown in the table below.
Period
Total
Number of
Shares
Purchased
Average
Price Paid
per Share
Total Number of
Shares Purchased
as Part of Publicly
Announced Plan
Approximate Dollar
Value of Shares
That May Yet be
Purchased Under
the Plan
(in millions)
October 1-31, 2024
115,909
$ 94.71
115,909
$ 561.9
November 1-30, 2024
135,970
$ 91.93
135,970
$ 549.4
December 1-31, 2024
239,758
$ 87.15
239,758
$ 528.5
Total
491,637
$ 90.25
491,637
$ 528.5
In connection with our stock-based compensation plans, during the three months ended December 31, 2024, common stock totaling 22,086
shares with an aggregate value of $2.1 million were tendered by employees for payment of applicable statutory tax withholdings. These
shares are excluded from the table above.
During the three months ended December 31, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading
arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
Item 6. Selected Financial Data
None.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with the other sections of this 2024 10-K, including the Special Note on Forward-
Looking Statements and Part I, Item 1A. Risk Factors.
OVERVIEW
ASGN provides information technology ("IT") services and solutions across the commercial and government sectors. ASGN operates through
two segments, Commercial and Federal Government. The Commercial Segment, which is the largest segment, provides consulting, creative
digital marketing, and permanent placement services primarily to Fortune 1000 and large mid-market companies. The Federal Government
Segment provides advanced IT solutions to the Department of Defense, the intelligence community, and key federal civilian agencies, namely
the Department of Homeland Security. Virtually all of the Company's revenues are generated in the United States.
Critical Accounting Policies and Estimates
Our financial statements are prepared in conformity with accounting principles generally accepted in the United States ("GAAP"), which
require us to make certain assumptions and related estimates affecting the amounts reported in the consolidated financial statements. Actual
results could differ from those estimates.
Critical accounting policies are those we believe are both most important to the portrayal of our financial condition and results and require our
most difficult, subjective or complex judgments, often because we must make estimates about matters that are inherently uncertain.
Judgments and uncertainties affecting the application of those policies may result in materially different amounts being reported under
different conditions or using different assumptions. We believe the accounting policies and estimates most critical in understanding the
judgments involved in preparing our financial statements are goodwill and acquired intangible assets.
Recoverability of Goodwill and Trademarks — Goodwill and trademarks are evaluated for impairment annually on October 31st, or more
frequently if an event occurs or circumstances change, including but not limited to, a significant decrease in expected revenues or cash flows;
an adverse change in the business environment, regulatory environment or legal factors; or a substantial sustained decline in the market
capitalization of our stock. Goodwill is tested at the reporting unit level, which is generally an operating segment or one level below the
operating segment level, where a business operates and for which discrete financial information is available and reviewed by segment
management. The Company's only identifiable indefinite-lived intangible assets are its trademarks.
16
When evaluating goodwill and trademarks for impairment, the Company may first perform a qualitative assessment to determine whether it is
more likely than not that there has been an impairment. A qualitative assessment takes into consideration (i) macroeconomic, industry and
market conditions; (ii) cost factors; (iii) overall financial performance compared with prior projections, including changes in assumptions
since the last quantitative assessment; (iv) future performance and projections; (v) the excess of fair value over carrying value as of the most
recent quantitative assessment performed; and (vi) other relevant entity-specific events. The decision to perform a qualitative assessment in a
given year is influenced by a number of factors including the significance of the excess of the estimated fair value over carrying amount at the
last quantitative assessment date and the amount of time between quantitative fair value assessments. If the Company decides not to perform a
qualitative assessment, or if it determines that it is more likely than not that the carrying amount of goodwill or trademarks exceeds their fair
value, a quantitative assessment is performed to determine the estimated fair value of the reporting unit or trademark.
To estimate the fair value of a reporting unit, quantitative analysis would generally include a combination of a discounted cash flow (“DCF”)
model and a market approach. Key inputs to the DCF model would include (i) future revenues, (ii) earnings before interest, taxes depreciation
and amortization and (iii) the weighted average cost of capital discount rate. As a result of a quantitative assessment, if the carrying amount
exceeds the estimated fair value, an impairment charge would be recorded to reduce the carrying amount of goodwill.
To estimate the fair value of a trademark, quantitative analysis would generally include, an income approach, specifically a relief-from-
royalty method. As a result of a quantitative assessment, if the carrying amount exceeds the estimated fair value, an impairment charge would
be recorded to reduce the carrying amount of the trademark.
For the 2024 impairment test of goodwill and trademarks, the Company performed a qualitative assessment and determined there were no
indicators of impairment and it was more likely than not that the fair value of each of the reporting units, and the trademarks, exceeded their
respective carrying amounts.
For the 2024 goodwill impairment test, the Company had three reporting units: Apex, Creative Circle and Federal Government. Following the
impairment test, the Company aggregated the Apex and Creative Circle reporting units into a single reporting unit, now known as the
Commercial reporting unit. Before and after this change it is more likely than not the fair value of the Company's reporting units exceeded
their carrying value.
RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2024 COMPARED WITH THE YEAR ENDED
DECEMBER 31, 2023
In this section, we discuss the results of our operations for the year ended December 31, 2024 compared with the year ended December 31,
2023. For a discussion of the year ended December 31, 2023 compared with the year ended December 31, 2022, please refer to Part II, Item
7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year
ended December 31, 2023.
Revenues
Revenues for the year were $4.1 billion, down 7.9 percent year-over-year. The table below shows our revenues by segment (in millions).
% of Total
2024
2023
Change
2024
2023
Change
Commercial:
Assignment
$ 1,740.5
$ 2,078.9
(16.3) %
42.5 %
46.7 %
(4.2) %
Consulting
1,128.2
1,095.5
3.0 %
27.5 %
24.6 %
2.9 %
2,868.7
3,174.4
(9.6) %
70.0 %
71.3 %
(1.3) %
Federal Government
1,231.0
1,276.2
(3.5) %
30.0 %
28.7 %
1.3 %
Consolidated
$ 4,099.7
$ 4,450.6
(7.9) %
100.0 %
100.0 %
From an industry perspective, the Company operates in six broad industry verticals. Commercial Segment revenues (70.0 percent of total
revenues) were down 9.6 percent year-over-year and are categorized into five broad industry verticals: (i) Financial Services, (ii) Consumer
and Industrials, (iii) Healthcare, (iv) Technology, Media and Telecom ("TMT"), and (v) Business and Government Services. The TMT
industry vertical had low single-digit growth, while the remaining four industry verticals declined year-over-year. Federal Government
Segment revenues (30.0 percent of total revenues), the sixth industry vertical, were down 3.5 percent year-over-year, reflecting lower third-
party software licenses revenues compared with the prior year.
Total IT consulting services revenues were $2.4 billion (57.5 percent of total revenues), down 0.5 percent year-over-year. Federal
Government Segment revenues, which are all consulting revenues, were $1.2 billion, down 3.5 percent year-over-year as stated above.
Commercial Segment consulting revenues were $1.1 billion, up 3.0 percent year-over-year. Assignment revenues, which totaled $1.7 billion
(42.5 percent of total revenues), were down 16.3 percent year-over-year, reflecting continued softness in the portions of the Commercial
Segment Business that are more sensitive to changes in the macroeconomic cycles (i.e., more cyclical).
17
Gross Profit and Gross Margin
The table below shows gross profit and gross margin by segment (in millions).
Gross Profit
Gross Margin
2024
2023
Change
2024
2023
Change
Commercial
$ 932.9
$ 1,017.6
(8.3) %
32.5 %
32.1 %
0.4 %
Federal Government
250.8
262.4
(4.4) %
20.4 %
20.6 %
(0.2) %
Consolidated
$ 1,183.7
$ 1,280.0
(7.5) %
28.9 %
28.8 %
0.1 %
Gross profit is comprised of revenues less costs of services, which consist primarily of compensation for our contract professionals, other
direct costs, and reimbursable out-of-pocket expenses.
Consolidated gross profit declined 7.5 percent on a revenue decline of 7.9 percent. Gross margin was 28.9 percent, an expansion of 10 basis
points year-over-year, reflecting a higher mix of Commercial consulting revenues (which carry a higher gross margin than assignment
revenues and Federal Government Segment revenues), as well as margin expansion in these revenues.
Selling, General, and Administrative Expenses
Selling, general and administrative ("SG&A") expenses consist primarily of compensation expense for our field operations and corporate
staff, rent, information systems, marketing, telecommunications, public company expenses and other general and administrative expenses.
SG&A expenses were $821.2 million (20.0 percent of revenues), compared with $844.2 million (19.0 percent of revenues) in 2023. The
decrease in SG&A expenses was primarily due to lower compensation-related expense.
Amortization of Intangible Assets
Amortization of intangible assets was $58.1 million, down from $71.7 million in 2023. This decrease was due to (i) the accelerated
amortization method whereby most of our acquired intangibles have higher amortization rates at the beginning of their useful lives, and (ii)
older intangibles reaching the end of their useful lives.
Interest Expense, Net
Interest expense, net, which consists primarily of cash-based interest expense, amortization and adjustments to deferred loan costs, and
interest income, was $64.3 million, down from $66.4 million in 2023. The decrease was primarily the result of higher interest income and
lower debt amendment fees (related to refinancing the senior secured credit facility in both periods), partially offset by higher interest expense
on the senior secured credit facility. The weighted-average outstanding borrowings for 2024 and 2023 were $1.05 billion and the cash-based
interest expense rate was 6.0 percent and 5.9 percent (excluding interest income and costs related to debt amendments), respectively.
Provision for Income Taxes
The provision for income taxes was $64.9 million, down from $78.4 million in 2023 due to lower income before income taxes. The effective
tax rate of 27.0 percent was slightly higher than the effective tax rate of 26.3 percent in 2023.
Net Income
Net income was $175.2 million, down from $219.3 million in 2023.
18
Commercial Segment - Consulting Metrics
Commercial consulting bookings are the value of new contracts entered into during a specified period, including adjustments for the effects of
changes in contract scope and contract terminations ("Bookings"). The underlying contracts are terminable by the client on short notice with
little or no termination penalties. Measuring Bookings involves the use of estimates and judgments and there are no independent standards or
requirements governing the calculation of bookings. Information regarding Bookings is not comparable to, nor should it be substituted for, an
analysis of reported revenues. The book-to-bill ratio for our commercial consulting revenues is the ratio of Bookings to commercial
consulting revenues for a specified period. The average duration of commercial consulting projects is approximately one year.
Year Ended December 31,
(Dollars in millions)
2024
2023
2022
Bookings
$
1,281.3 $
1,351.9 $
1,192.2
Book-to-Bill Ratio
1.1 to 1
1.2 to 1
1.2 to 1
Federal Government Segment Metrics
Contract backlog for our Federal Government Segment represents the estimated amount of future revenues to be recognized under awarded
contracts, including task orders and options, at a point in time ("Contract Backlog"). These estimates are subject to change and may be
affected by the execution of new contracts, the extension or early termination of existing contracts, the non-renewal or completion of current
contracts, and adjustments to estimates for previously included contracts. There is no assurance our contract backlog will result in future
revenues. The timing of the execution of new contracts and other changes are affected by the funding cycles of the government and can vary
from quarter to quarter. New contract awards are the estimated amount of future revenues to be recognized under contracts awarded during a
specified period, including adjustments to estimates for contracts awarded in previous periods (“New Contract Awards”). Information
regarding New Contract Awards is not comparable to, nor should it be substituted for, an analysis of reported revenues. Due to variability,
New Contract Awards are presented on a trailing-twelve-months (“TTM”) basis. The book-to-bill ratio for our Federal Government Segment
is the ratio of New Contract Awards to revenues for a specified period. Contract backlog coverage ratio is calculated as total Contract Backlog
divided by TTM revenues.
Year Ended December 31,
(Dollars in millions)
2024
2023
2022
New Contract Awards
$
1,340.5 $
1,022.2 $
1,073.3
Book-to-Bill Ratio
1.1 to 1
0.8 to 1
0.9 to 1
December 31,
(Dollars in millions)
2024
2023
2022
Funded Contract Backlog
$
529.0 $
543.5 $
582.3
Negotiated Unfunded Contract Backlog
2,589.6
2,466.0
2,681.2
Contract Backlog
$
3,118.6 $
3,009.5 $
3,263.5
Contract Backlog Coverage Ratio
2.5 to 1
2.4 to 1
2.9 to 1
Liquidity and Capital Resources
Our working capital, which is current assets less current liabilities, at December 31, 2024 was $550.6 million, and our cash and cash
equivalents were $205.2 million. Our cash flows from operating activities have been our primary source of liquidity and have been sufficient
to meet our working capital and capital expenditure needs. At December 31, 2024, we had full availability under the $500.0 million revolving
credit facility. We believe that our cash and cash equivalents on hand, expected operating cash flows, and availability under our revolving
credit facility will be sufficient to fulfill our obligations, working capital requirements, and capital expenditures for the next 12 months.
Net cash provided by operating activities was $400.0 million in 2024, compared with $456.9 million in 2023. Net cash provided by operating
activities before changes in operating assets and liabilities was $353.9 million, compared with $400.8 million in 2023. Net cash provided by
changes in operating assets and liabilities was $46.1 million, compared with $56.1 million in 2023.
Net cash used in investing activities was $35.3 million and $40.5 million for 2024 and 2023, respectively, and primarily related to capital
expenditures.
Net cash used in financing activities in 2024 was $333.2 million, and primarily consisted of $327.2 million to repurchase the Company's
common stock and required principal payments of $5.0 million on the term loan B. Net cash used in financing activities in 2023 was $310.9
million and primarily consisted of $273.1 million to repurchase the Company's common stock, net repayments of borrowings under the
revolving credit facility totaling $31.5 million, a required quarterly principal payment of $1.3 million on the term loan B, as well as the effects
19
of the August 2023 amendments to the Company's senior secured credit facility which generated net proceeds of $8.0 million that were offset
by related amendment costs.
For details on the Company’s senior secured credit facility, comprised of a revolving credit facility and term loan B, and unsecured senior
notes, see Note 8. Long-Term Debt in Item 8. Financial Statements and Supplementary Data.
Commitments and Contingencies — The following table sets forth, on an aggregate basis, the amounts of specified contractual cash
obligations required to be paid in the future periods shown (in millions):
Less than
1 year
1-3 years
3-5 years
More than
5 years
Total
Long-term debt obligations(1)
$
62.0
$
123.2
$
627.7
$
487.8
$
1,300.7
Operating Leases(2)
22.5
33.3
15.5
2.7
74.0
Purchase obligations(3)
29.2
13.9
0.5
—
43.6
$
113.7
$
170.4
$
643.7
$
490.5
$
1,418.3
_______
(1) Long-term debt obligations include principal payments and estimated interest and fees calculated based on the rates in effect at December 31, 2024.
(2) Represents the future minimum lease payments for non-cancelable operating leases.
(3) Purchase obligations are non-cancelable job board service agreements and software subscriptions, maintenance, and license agreements.
For additional information about these contractual cash obligations, see Notes 4. Leases, 8. Long-Term Debt and 9. Commitments and
Contingencies in Item 8. Financial Statements and Supplementary Data.
We have retention policies for our workers’ compensation liability exposures. The workers' compensation loss reserves are based upon an
actuarial report obtained from a third party and are determined based on claims filed and claims incurred but not reported. We account for
claims incurred but not yet reported based on estimates derived from historical claims experience and current trends of industry data. Changes
in estimates, differences in estimates, and actual payments for claims are recognized in the period that the estimates changed or the payments
were made. The workers' compensation loss reserves were $2.8 million and $3.0 million, net of anticipated insurance and indemnification
recoveries of $10.5 million and $10.5 million, at December 31, 2024 and 2023, respectively. We have undrawn stand-by letters of credit
outstanding to secure obligations for workers’ compensation claims and other obligations. The undrawn stand-by letters of credit were $3.7
million at December 31, 2024 and 2023.
We have a deferred compensation plan liability of $17.8 million and $16.6 million at December 31, 2024 and 2023, which was primarily
included in other long-term liabilities in the accompanying consolidated balance sheets. We established a rabbi trust to fund the deferred
compensation plan, which is primarily comprised of mutual funds measured at fair value using the net asset value practical expedient, and
approximates the deferred compensation plan liability balances (see Note 11. Stock-Based Compensation and Other Employee Benefit Plans
in Item 8. Financial Statements and Supplementary Data).
Off-Balance Sheet Arrangements
As of December 31, 2024, we had no off-balance sheet arrangements.
Accounting Standards Updates
See Note 3. Accounting Standards Update in Item 8. Financial Statements and Supplementary Data for a discussion of new accounting
pronouncements.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
We are exposed to certain market risks arising from transactions in the normal course of business, principally risks associated with interest
rates. Our exposure to interest rate risk is associated with our debt instruments. See Note 8. Long-Term Debt in Item 8. Financial Statements
and Supplementary Data for a further description of our debt instruments. A hypothetical 100 basis-point change in interest rates on variable-
rate debt would have resulted in interest expense fluctuating approximately $4.9 million based on $493.8 million of debt outstanding for a 12-
month period. We have not entered into any market risk sensitive instruments for trading purposes.
20
Item 8. Financial Statements and Supplementary Data
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors of ASGN Incorporated
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of ASGN Incorporated and subsidiaries (the "Company") as of December 31,
2024 and 2023, the related consolidated statements of operations and comprehensive income, stockholders' equity, and cash flows, for each of
the three years in the period ended December 31, 2024, and the related notes and the financial statement schedule listed in the Index at Item
15(a)(2) (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects,
the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of
America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the
Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated
Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 21,
2025 expressed an unqualified opinion on the Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's
financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with
respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and
Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits
included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and
performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis
for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was
communicated or required to be communicated to the audit committee and that (1) relates to an account or disclosure that is material to the
financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit
matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical
audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Goodwill and Identifiable Intangible Assets, net — Creative Circle Reporting Unit — Refer to Notes 2 and 6 of the financial statements
Critical Audit Matter Description
The Company performed qualitative impairment tests of goodwill and indefinite-lived trademarks for all reporting units. The qualitative
impairment tests indicated that there was no goodwill or indefinite-lived trademark impairment as of the annual assessment date on October
31, 2024. The Company analyzed qualitative factors, including (i) macroeconomic, industry and market conditions, (ii) cost factors, (iii)
overall financial performance compared with prior projections, (iv) the excess of fair value over carrying value as of the most recent
quantitative assessment performed, and (v) other relevant entity-specific events to determine whether it was more likely than not that the fair
values of the reporting units and indefinite-lived trademarks were less than their carrying amounts as a basis for determining whether it is
necessary to perform a quantitative goodwill or indefinite-lived trademark impairment test.
Given the recent financial performance of the Creative Circle reporting unit and the judgments used to determine whether it is more likely
than not that impairment of the underlying goodwill and indefinite-lived trademark has occurred, including management’s judgment as it
relates to their evaluation of macroeconomic, industry and market considerations, and the overall financial performance, we identified this to
be a critical audit matter. Auditing management’s conclusions that the goodwill and indefinite-lived trademark related to the Creative Circle
reporting unit were recoverable involved subjective judgment and an increased extent of effort, including the need to involve our fair value
specialists.
21
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to management’s qualitative assessment of goodwill and indefinite-lived trademark impairment for the Creative
Circle reporting unit included the following, among others:
•
We tested the design and operating effectiveness of management’s internal controls over their goodwill and indefinite-lived
trademark qualitative impairment evaluation for the Creative Circle reporting unit, including those over the significant assumptions
used in management’s qualitative impairment test.
•
We evaluated management's qualitative assessment of factors affecting the Creative Circle reporting unit’s forecasted revenue and
profit margins by comparing the forecasts to (i) historical results, (ii) internal communications between management and the Board
of Directors, and (iii) information included in the Company’s press releases. With the assistance of our fair value specialists, we
evaluated the reasonableness of management's qualitative assessment by performing the following:
◦
Using guideline public companies, we (i) evaluated management’s discount rate; (ii) analyzed industry growth, margin,
and valuation multiple trends, and (iii) analyzed the market capitalization trend of the Company.
◦
We conducted an analysis to assess the appropriateness of management’s royalty rate selection for the indefinite-lived
trademark.
•
We evaluated the financial results of the Creative Circle reporting unit compared to forecasts, and negative evidence, if any,
subsequent to the annual assessment date of October 31, 2024, through December 31, 2024.
/s/ DELOITTE & TOUCHE LLP
Richmond, Virginia
February 21, 2025
We have served as the Company's auditor since 1987.
22
ASGN INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In millions, except per share data)
December 31,
2024
2023
ASSETS
Current assets:
Cash and cash equivalents
$
205.2
$
175.9
Accounts receivable, net
650.8
741.5
Prepaid expenses and income taxes
44.6
36.8
Other current assets
17.1
19.1
Total current assets
917.7
973.3
Property and equipment, net
82.6
81.4
Operating lease right-of-use assets
61.9
64.2
Identifiable intangible assets, net
439.8
497.9
Goodwill
1,893.1
1,894.1
Other non-current assets
33.9
33.7
Total assets
$
3,429.0
$
3,544.6
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable
$
27.2
$
34.0
Accrued payroll
218.0
236.5
Operating lease liabilities
19.5
19.5
Other current liabilities
102.4
104.1
Total current liabilities
367.1
394.1
Long-term debt
1,033.5
1,036.6
Operating lease liabilities
46.9
49.1
Deferred income tax liabilities
187.5
156.0
Other long-term liabilities
17.3
16.7
Total liabilities
1,652.3
1,652.5
Commitments and contingencies (Note 9)
Stockholders’ equity:
Preferred stock, $0.01 par value, 1.0 million shares authorized, no shares issued
—
—
Common stock, $0.01 par value, 75.0 million shares authorized, 43.8 million and 46.7
million shares outstanding at December 31, 2024 and 2023, respectively
0.4
0.5
Paid-in capital
684.2
696.0
Retained earnings
1,097.1
1,195.6
Accumulated other comprehensive loss
(5.0)
—
Total stockholders’ equity
1,776.7
1,892.1
Total liabilities and stockholders’ equity
$
3,429.0
$
3,544.6
See notes to consolidated financial statements.
23
ASGN INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(In millions, except per share data)
Year Ended December 31,
2024
2023
2022
Revenues
$
4,099.7
$
4,450.6
$
4,581.1
Costs of services
2,916.0
3,170.6
3,211.5
Gross profit
1,183.7
1,280.0
1,369.6
Selling, general, and administrative expenses
821.2
844.2
895.0
Amortization of intangible assets
58.1
71.7
65.1
Operating income
304.4
364.1
409.5
Interest expense, net
(64.3)
(66.4)
(45.9)
Income before income taxes
240.1
297.7
363.6
Provision for income taxes
64.9
78.4
96.7
Income from continuing operations
175.2
219.3
266.9
Income from discontinued operations, net of income taxes
—
—
1.2
Net income
$
175.2
$
219.3
$
268.1
Earnings per share:
Basic —
Continuing operations
$
3.88
$
4.54
$
5.27
Discontinued operations
—
—
0.03
$
3.88
$
4.54
$
5.30
Diluted —
Continuing operations
$
3.83
$
4.50
$
5.21
Discontinued operations
—
—
0.02
$
3.83
$
4.50
$
5.23
Shares and share equivalents used to calculate earnings per share:
Basic
45.2
48.3
50.6
Diluted
45.7
48.7
51.3
Reconciliation of net income to comprehensive income:
Net income
$
175.2
$
219.3
$
268.1
Foreign currency translation adjustment
(5.0)
2.7
(2.4)
Comprehensive income
$
170.2
$
222.0
$
265.7
See notes to consolidated financial statements.
24
ASGN INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In millions)
Common Stock
Paid-in
Capital
Retained
Earnings
Other
Total
Shares
Par Value
Balance at December 31, 2021
51.8 $
0.5 $
690.8 $ 1,174.4 $
(0.3) $ 1,865.4
Stock-based compensation expense
—
—
49.3
—
—
49.3
Issuances under equity plans
0.5
—
18.9
—
—
18.9
Tax withholding on restricted stock vesting
—
—
(16.6)
—
—
(16.6)
Stock repurchase and retirement of shares
(2.8)
—
(38.9)
(242.5)
—
(281.4)
Other
—
—
—
—
(2.4)
(2.4)
Net income
—
—
—
268.1
—
268.1
Balance at December 31, 2022
49.5
0.5
703.5
1,200.0
(2.7)
1,901.3
Stock-based compensation expense
—
—
44.0
—
—
44.0
Issuances under equity plans
0.6
—
18.8
—
—
18.8
Tax withholding on restricted stock vesting
—
—
(18.3)
—
—
(18.3)
Stock repurchase and retirement of shares
(3.4)
—
(52.0)
(223.7)
—
(275.7)
Other
—
—
—
—
2.7
2.7
Net income
—
—
—
219.3
—
219.3
Balance at December 31, 2023
46.7
0.5
696.0
1,195.6
—
1,892.1
Stock-based compensation expense
—
—
42.3
—
—
42.3
Issuances under equity plans
0.6
—
17.2
—
—
17.2
Tax withholding on restricted stock vesting
—
—
(15.8)
—
—
(15.8)
Stock repurchase and retirement of shares
(3.5)
(0.1)
(55.5)
(273.7)
—
(329.3)
Other
—
—
—
—
(5.0)
(5.0)
Net income
—
—
—
175.2
—
175.2
Balance at December 31, 2024
43.8 $
0.4 $
684.2 $ 1,097.1 $
(5.0) $ 1,776.7
See notes to consolidated financial statements.
25
ASGN INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
Year Ended December 31,
2024
2023
2022
Cash Flows from Operating Activities
Net income
$
175.2
$
219.3
$
268.1
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization and depreciation
96.3
100.3
91.4
Stock-based compensation
42.3
44.0
49.3
Deferred income taxes
31.2
26.9
31.5
Other
8.9
10.3
8.2
Changes in operating assets and liabilities, net of effects of acquisitions:
Accounts receivable
87.0
111.0
(116.3)
Prepaid expenses and income taxes
(8.0)
3.3
2.0
Accounts payable
(6.6)
(2.4)
7.6
Accrued payroll
(17.1)
(49.4)
11.3
Payroll tax deferral and other
(9.2)
(6.4)
(45.3)
Net cash provided by operating activities
400.0
456.9
307.8
Cash Flows from Investing Activities
Cash paid for property and equipment
(35.3)
(39.9)
(37.5)
Cash paid for acquisitions, net of cash acquired
—
—
(484.6)
Cash received from sale of business
—
—
9.8
Other
—
(0.6)
2.3
Net cash used in investing activities
(35.3)
(40.5)
(510.0)
Cash Flows from Financing Activities
Proceeds from long-term debt
—
571.8
94.0
Principal payments of long-term debt
(5.0)
(596.6)
(62.5)
Proceeds from employee stock purchase plan
17.2
18.9
18.9
Repurchase of common stock
(327.2)
(273.1)
(281.4)
Payment of employment taxes related to release of restricted stock awards
(15.8)
(18.3)
(16.6)
Debt issuance or amendment costs
—
(8.6)
(0.8)
Other
(2.4)
(5.0)
(8.1)
Net cash used in financing activities
(333.2)
(310.9)
(256.5)
Effect of exchange rate changes on cash and cash equivalents
(2.2)
0.1
(0.6)
Net Increase (Decrease) in Cash and Cash Equivalents
29.3
105.6
(459.3)
Cash and Cash Equivalents at Beginning of Year
175.9
70.3
529.6
Cash and Cash Equivalents at End of Year
$
205.2
$
175.9
$
70.3
Supplemental Disclosure of Cash Flow Information
Cash paid for —
Income taxes
$
33.5
$
44.8
$
54.5
Interest
$
62.6
$
62.1
$
43.7
See notes to consolidated financial statements.
26
ASGN INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. General
Basis of Presentation — The accompanying consolidated financial statements have been prepared in accordance with accounting principles
generally accepted in the United States of America ("GAAP") and the rules of the Securities and Exchange Commission ("SEC"). The
consolidated financial statements include the accounts of ASGN Incorporated and its wholly-owned subsidiaries ("ASGN" or the
"Company"). The results of operations for acquired companies are included in the consolidated results of the Company from the date of
acquisition (see Note 5. Acquisitions). All intercompany accounts and transactions have been eliminated.
Use of Estimates — The preparation of financial statements in conformity with GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during the reporting period. Those estimates determined to be most
critical to the preparation of the financial statements are discussed below in Note 2. Summary of Significant Accounting Policies. Actual
results could differ from those estimates.
2. Summary of Significant Accounting Policies
Revenue Recognition — Revenues are recognized as control of the promised service is transferred to customers, in an amount that reflects the
consideration expected in exchange for the services. The Company recognizes revenues on a gross basis as it acts as a principal for all of its
revenue transactions. The Company has direct contractual relationships with its customers, bears the risks and rewards of its arrangements,
has the discretion to select the billable professionals, and establish the price for the services to be provided.
The majority of the Company's services are provided under time-and-materials ("T&M") contracts where payments are based on fixed hourly
rates for each direct labor hour expended and reimbursements for allowable material costs and out-of-pocket expenses. Revenues for T&M
contracts are recognized over time, based on hours worked, because the customer simultaneously receives and consumes the benefits as
services are provided. Generally, the performance of the requested service over time is a single performance obligation. To the extent actual
direct labor and associated costs vary in relation to the agreed upon billing rates, the generated profit may vary.
The Federal Government Segment also provides services under cost reimbursable and firm-fixed-price ("FFP") contracts, which are
recognized over time based on the amount invoiced as those amounts directly correspond with the value received by a customer. Generally,
these contracts contain a single performance obligation involving a significant integration of various activities that are performed together to
deliver a combined service or solution. Cost reimbursable contracts are usually subject to lower risk and tend to have lower margins. From
time to time, the Company may have FFP contracts in which revenues are recognized using a cost-to-cost measurement method.
Under certain commercial contracts, customers may receive discounts (e.g., volume discounts, rebates, prompt-pay discounts) and
adjustments to the amounts billed, which are considered variable consideration. Volume discounts are the largest component of variable
consideration and are estimated using (i) the most likely amount method; (ii) contract terms; and (iii) estimates of revenue. Revenues are
recognized net of variable consideration to the extent it is probable a significant reversal of revenues will not occur in subsequent periods. The
Company includes billable expenses (allowable material costs and out-of-pocket reimbursable expenses) in revenues and the associated
expenses are included in costs of services.
There are no incremental contract costs to obtain contracts. Contract fulfillment costs include, but are not limited to, direct labor for both
employees and subcontractors, allowable materials such as third-party hardware and software that are integrated as part of the overall services
and solutions provided to customers, and out-of-pocket reimbursable expenses. Contract fulfillment costs are expensed as incurred, except for
certain set-up costs for a federal government project, which were capitalized and are being amortized over the expected period of benefit.
The Company’s contracts have termination for convenience provisions and do not have substantive termination penalties. Therefore, the
contract duration for accounting purposes may be less than the stated terms. For accounting purposes, the Company's contracts with customers
are considered to be of a short-term nature (one year or less). The Company does not disclose the value of remaining performance obligations
for short-term contracts.
The Company has contract liabilities for payments received in advance of providing services under certain contracts. Contract liabilities for
advance payments were $17.6 million and $16.8 million at December 31, 2024 and 2023, respectively. Contract liabilities are included in
other current liabilities in the accompanying consolidated balance sheets and are generally recognized as revenues within three months from
the balance sheet date.
Payment terms vary and the time between invoicing and when payment is due is not significant. There are no financing components to the
Company’s arrangements.
Costs of Services — Costs of services include direct costs consisting primarily of payroll, payroll taxes, and benefit costs for the Company’s
billable professionals. Costs of services also include other direct costs, and reimbursable out-of-pocket expenses.
Stock-Based Compensation — Stock-based compensation expense is measured based on the grant-date fair value of the respective awards and
recognized over the requisite service period, net of an estimated forfeiture rate.
27
Amortization of Finite-Lived Intangible Assets — Finite-lived intangible assets are amortized over their useful lives and are tested for
recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Customer and
contractual relationships and contract backlog are amortized based on the annual cash flows observed in the valuation of the asset, which
generally accelerates the amortization into the earlier years reflective of the economic life of the asset. Contractor relationships and non-
compete agreements are amortized using the straight-line method.
Income Taxes — Income taxes are accounted for using the liability method. Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective
tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance if it is more
likely than not that a portion of the deferred tax asset will not be realized.
The Company reviews its uncertain tax positions regularly. An uncertain tax position represents the Company’s expected treatment of a tax
position taken in a filed return, or planned to be taken in a future tax return or claim that has not been reflected in measuring income tax
expense for financial reporting purposes. The Company recognizes the tax benefit from an uncertain tax position when it is more-likely-than-
not that the position will be sustained upon examination on the basis of the technical merits or the statute of limitations for the relevant taxing
authority to examine and challenge the tax position has expired.
Foreign Currency Translation — The functional currency of the Company’s foreign operations is their local currency. Assets and liabilities
are translated into U.S. dollars at the rate of exchange in effect on the balance sheet date. Revenues and expenses are translated at the average
rates of exchange prevailing during each monthly period. The related translation adjustments are recorded as cumulative foreign currency
translation adjustments in accumulated other comprehensive (loss) income as a separate component of stockholders’ equity.
Cash and Cash Equivalents — The Company considers all highly-liquid investments with original maturities of three months or less to be
cash equivalents.
Accounts Receivable Allowances — The Company estimates an allowance for expected credit losses (the inability of customers to make
required payments). These estimates are based on (i) a combination of past experience and current trends, (ii) consideration of the current
aging of receivables, and (iii) a specific review for potential bad debts. The resulting bad debt expense is included in selling, general, and
administrative ("SG&A") expenses in the accompanying consolidated statements of operations and comprehensive income. Receivables are
written off when deemed uncollectible. The accounts receivable allowance was $5.0 million and $4.0 million at December 31, 2024 and 2023,
respectively.
Cloud Computing Arrangements — The Company has cloud computing arrangements which are accounted for as service contracts as the
Company does not have the ability to take possession of the software nor can the Company run the software on its own hardware or contract
with another party unrelated to the vendor to host the software. These cloud-based applications are used to enhance the capabilities of the
Company's operating technology infrastructure. The Company capitalizes costs associated with the implementation of these cloud computing
arrangements incurred during the application development stage of a project. Amortization is calculated on a straight-line basis and is
included in SG&A expenses in the accompanying consolidated statements of operations and comprehensive income. Amortization expense
was $5.7 million and $0.7 million for the years ended December 31, 2024 and 2023. Balances for capitalized cloud implementation costs were
as follows (in millions):
Carrying Amount
Balance Sheet Classification
Gross
Accumulated
Amortization
Net
Prepaid
Expenses
Non-current
Assets
Total
December 31, 2024
$
28.4 $
8.2 $
20.2
$
10.0 $
10.2 $
20.2
December 31, 2023
15.3
2.5
12.8
4.3
8.5
12.8
Leases — The Company has operating leases for corporate offices, branch offices, and data centers, which have lease terms ranging from one
year to 13.3 years. At the inception of a contract, the Company determines if the contract contains a lease. A contract contains a lease if it
conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Operating lease ROU assets and
lease liabilities are recognized at the lease commencement date, based on the present value of the future minimum lease payments. The
Company’s leases do not provide an implicit rate of return. Therefore, the Company uses its incremental borrowing rate ("IBR") in
determining the present value of lease payments. In determining the IBR, the Company considers its credit rating and the current market
interest rates. The IBR approximates the interest rate the Company would pay on collateralized debt with similar terms and payments as the
lease agreements and in a similar economic environment where the leased assets are located. Leases with an initial term of 12 months or less
are not recorded on the balance sheet. The Company does not have finance leases.
Lease expense is recognized on a straight-line basis over the lease term and is primarily included in SG&A expenses in the accompanying
consolidated statements of operations and comprehensive income. Some lease agreements offer renewal options, which are assessed against
relevant economic factors to determine whether it is reasonably certain that these renewal options will be exercised. As a result of this
assessment, for most leases, renewal options were excluded from the minimum lease payments when calculating the operating lease assets
and liabilities, as the Company does not consider the exercise of such options to be reasonably certain.
28
The Company has lease agreements with lease and non-lease components, which are accounted for as a single lease component for all
underlying asset classes. Some leases require variable payments for common area maintenance, property taxes, parking, insurance, and other
variable costs. The variable portion of lease payments is not included in operating lease assets or liabilities. Variable lease costs are expensed
when incurred.
Property and Equipment — Property and equipment are stated at cost. Depreciation and amortization are provided using the straight-line
method over the estimated useful lives of the related assets, generally three to five years. Leasehold improvements are amortized over the
shorter of the life of the related asset or the remaining term of the lease. Costs associated with customized internal-use software systems that
have reached the application development stage and meet recoverability tests are capitalized and include external direct costs utilized in
developing or obtaining the applications and payroll and payroll-related expenses for employees who are directly associated with the
application development.
Impairment or Disposal of Long-Lived Assets — The Company evaluates long-lived assets, other than goodwill and identifiable intangible
assets with indefinite lives, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. An impairment loss is recognized when the sum of the undiscounted future cash flows is less than the carrying amount of the
asset, in which case a write-down is recorded to reduce the related asset to its estimated fair value. There were no significant impairments of
long-lived assets in 2024, 2023 and 2022.
Recognition of Goodwill and Acquired Intangible Assets — At the acquisition date, the Company records all tangible and intangible assets
acquired and liabilities assumed in a business combination at fair value, the most significant of which would be goodwill and acquired
intangible assets. Acquisition-date fair value represents the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants as measured on the acquisition date. Fair values were derived from valuations based on
information that existed as of the acquisition date. The fair value assigned to identifiable intangible assets is primarily determined using
estimates including future cash flows, discount rates, royalty rates, and income tax rates utilized in a discounted cash flow model, which is a
non-recurring fair value measurement based on unobservable inputs (Level 3 inputs). Acquired identified intangible assets typically include
customer and contractual relationships, non-compete agreements, and trademarks. In an acquisition, the excess amount of the purchase
consideration paid over the fair value of the net assets acquired and liabilities assumed is recorded as goodwill. Goodwill represents the
acquired assembled workforce, potential new customers, and future cash flows after the acquisition. During the measurement period, which
does not exceed one year from the acquisition date, provisional amounts may be adjusted to reflect new information the Company has
subsequently obtained regarding facts and circumstances that existed as of the acquisition date. Such fair value assessments require judgments
and estimates, which may cause final amounts to differ materially from original estimates.
Recoverability of Goodwill and Trademarks — Goodwill and trademarks are evaluated for impairment annually on October 31st, or more
frequently if an event occurs or circumstances change, including but not limited to, a significant decrease in expected revenues or cash flows;
an adverse change in the business environment, regulatory environment or legal factors; or a substantial sustained decline in the market
capitalization of our stock. Goodwill is tested at the reporting unit level, which is generally an operating segment or one level below the
operating segment level, where a business operates and for which discrete financial information is available and reviewed by segment
management. The Company's only identifiable indefinite-lived intangible assets are its trademarks.
When evaluating goodwill and trademarks for impairment, the Company may first perform a qualitative assessment to determine whether it is
more likely than not that there has been an impairment. A qualitative assessment takes into consideration (i) macroeconomic, industry and
market conditions; (ii) cost factors; (iii) overall financial performance compared with prior projections, including changes in assumptions
since the last quantitative assessment; (iv) future performance and projections; (v) the excess of fair value over carrying value as of the most
recent quantitative assessment performed; and (vi) other relevant entity-specific events. The decision to perform a qualitative assessment in a
given year is influenced by a number of factors including the significance of the excess of the estimated fair value over carrying amount at the
last quantitative assessment date and the amount of time between quantitative fair value assessments. If the Company decides not to perform a
qualitative assessment, or if it determines that it is more likely than not that the carrying amount of goodwill or trademarks exceeds their fair
value, a quantitative assessment is performed to determine the estimated fair value of the reporting unit or trademark.
To estimate the fair value of a reporting unit, quantitative analysis would generally include a combination of a discounted cash flow (“DCF”)
model and a market approach. Key inputs to the DCF model would include (i) future revenues, (ii) earnings before interest, taxes depreciation
and amortization and (iii) the weighted average cost of capital discount rate. As a result of a quantitative assessment, if the carrying amount
exceeds the estimated fair value, an impairment charge would be recorded to reduce the carrying amount of goodwill.
To estimate the fair value of a trademark, quantitative analysis would generally include, an income approach, specifically a relief-from-
royalty method. As a result of a quantitative assessment, if the carrying amount exceeds the estimated fair value, an impairment charge would
be recorded to reduce the carrying amount of the trademark.
For the 2024 impairment test of goodwill and trademarks, the Company performed a qualitative assessment and determined there were no
indicators of impairment and it was more likely than not that the fair value of each of the reporting units, and the trademarks, exceeded their
respective carrying amounts.
For the 2024 goodwill impairment test, the Company had three reporting units: Apex, Creative Circle and Federal Government. Following the
impairment test, the Company aggregated the Apex and Creative Circle reporting units into a single reporting unit, now known as the
29
Commercial reporting unit. Before and after this change it is more likely than not the fair value of the Company's reporting units exceeded
their carrying value.
Workers’ Compensation Loss Reserves — The Company carries retention policies for its workers’ compensation liability exposures. Under
these policies, the Company pays a base premium plus actual losses incurred, not to exceed certain stop-loss limits. The Company is insured
for losses above these limits. The Company estimates its workers' compensation loss reserves based on a third-party actuarial study based on
claims filed and claims incurred but not reported. The Company accounts for claims incurred but not yet reported based on estimates derived
from historical claims experience and current trends of industry data. Changes in estimates, differences in estimates, and actual payments for
claims are recognized in the period when the estimate changed or the payment was made.
Contingencies — The Company records an estimated loss from a loss contingency when information available prior to issuance of its
financial statements indicates it is probable that an asset has been impaired or a liability has been incurred at the date of the financial
statements and the amount of the loss can be reasonably estimated. Accounting for contingencies, such as legal settlements and workers’
compensation matters, requires the Company to use judgment.
Concentration of Credit Risk — Financial instruments that potentially subject the Company to credit risks consist primarily of cash and cash
equivalents and trade receivables. The Company places its cash and cash equivalents with high-quality financial institutions. Concentration of
credit risk with respect to accounts receivable for the Commercial Segment is limited because of the large number of clients and their
dispersion across different industries and geographies, thus spreading the trade credit risk. The Company performs ongoing credit evaluations
to identify risks and maintains an allowance to address these risks. Accounts receivables for the Federal Government Segment are primarily
from the U.S. government and are considered to have low credit risk.
Earnings per Share — Basic earnings per share are computed using the weighted-average number of shares outstanding and diluted earnings
per share are computed using the weighted-average number of shares and dilutive share equivalents (consisting of restricted stock units and
employee stock purchase plan contributions) outstanding during the periods using the treasury-stock method.
3. Accounting Standards Update
Recently Adopted Accounting Pronouncements:
In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-07,
Segment Reporting (Topic 280) Improvements to Reportable Segment Disclosures, which requires disclosure of significant segment expenses
and other segment items on an annual and interim basis and provide in interim periods all disclosures about a reportable segment’s profit or
loss and assets that are currently required annually. Additionally, it requires disclosure of the title and position of the Chief Operating
Decision Maker. The Company adopted this standard during 2024, see Note 14. Segment Reporting. The adoption of this update did not have
an effect on financial position, results of operations, or cash flows.
Accounting Pronouncements Issued But Not Yet Adopted:
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740) Improvements to Income Tax Disclosures, which requires
(i) a tabular tax rate reconciliation using specified categories and presenting both percentages and amounts, and (ii) disclosure of income taxes
paid disaggregated by jurisdiction if the amount is above a specified threshold. The new standard is effective for annual periods beginning
after December 15, 2024. The Company expects this ASU to only impact its disclosures with no effect on financial position, results of
operations or cash flows.
In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation
Disclosures (Subtopic 220-40) Disaggregation of Income Statement Expenses, which requires additional disclosure of the nature of expenses
included in the income statement as well as disclosures about specific types of expenses included in the expense captions within the income
statement. In January 2025, the FASB issued ASU No. 2025-01, Income Statement—Reporting Comprehensive Income—Expense
Disaggregation Disclosures (Subtopic 220-40) Clarifying the Effective Date. The amendments in this update may be applied either
prospectively or retrospectively, and are effective for fiscal years beginning after December 15, 2026, and interim reporting periods within
annual reporting periods beginning after December 15, 2027. The Company is evaluating the impact that this guidance will have on its
consolidated financial statements and related disclosures.
30
4. Leases
The Company has operating leases for corporate offices, branch offices, and data centers. The following table includes certain information
about these leases (dollars in millions).
Year Ended December 31,
2024
2023
2022
Components of lease expense —
Operating lease expense
$
23.6
$
26.1
$
25.4
Short-term lease expense
5.8
7.5
6.9
Variable lease expense
5.1
5.7
4.8
$
34.5
$
39.3
$
37.1
Weighted-average remaining lease term of operating leases
3.9 Years
3.9 years
3.1 years
Weighted-average discount rate of operating leases
5.32 %
5.03 %
3.67 %
Supplemental cash flow information —
Cash paid for operating lease liabilities
$
23.3
$
26.3
$
28.3
Right-of-use assets obtained with lease liabilities
$
19.0
$
36.3
$
15.6
Future maturities of operating lease liabilities are as follows (in millions):
2025
$
22.5
2026
19.3
2027
14.0
2028
9.6
2029
5.9
Thereafter
2.7
Total future minimum lease payments
74.0
Less: imputed interest
7.6
$
66.4
5. Acquisitions
During 2022, the Company increased its investment in IT consulting through the acquisition of two businesses for a total aggregate purchase
price of $483.0 million. On July 6, 2022, the Company acquired GlideFast Consulting ("GlideFast") for $350.0 million in cash. GlideFast is
part of the Commercial Segment. The preliminary fair value of the identifiable intangible assets related to this acquisition totaled
$102.8 million, including a trademark of $30.2 million which has an indefinite life, and the remaining intangible assets have a weighted-
average useful life of six years. On October 3, 2022, the Company acquired Iron Vine Security, which is included in the Federal Government
Segment.
None of the acquisitions were material individually or in the aggregate; therefore, we did not present any pro forma results for these
acquisitions.
31
6. Goodwill and Identifiable Intangible Assets
The following table summarizes the activity related to the carrying amount of goodwill by reportable segment since December 31, 2022 (in
millions). See Note 14. Segment Reporting for more information on the Company's reportable segments.
Commercial
Federal
Government
Total
Balance as of December 31, 2022
$
1,074.7
$
817.2
$
1,891.9
Purchase price adjustment
—
1.1
1.1
Translation adjustment
1.1
—
1.1
Balance as of December 31, 2023
1,075.8
818.3
1,894.1
Translation adjustment
(1.0)
—
(1.0)
Balance as of December 31, 2024
$
1,074.8
$
818.3
$
1,893.1
Acquired intangible assets consisted of the following (in millions):
December 31, 2024
December 31, 2023
Estimated
Useful Life
(in years)
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Subject to amortization:
Customer and contractual relationships
7 - 13
$
405.3
$
245.0
$
160.3
$
496.0
$
282.0
$
214.0
Non-compete agreements
2 - 7
21.4
14.7
6.7
29.3
18.2
11.1
426.7
259.7
167.0
525.3
300.2
225.1
Not subject to amortization:
Trademarks
272.8
—
272.8
272.8
—
272.8
$
699.5
$
259.7
$
439.8
$
798.1
$
300.2
$
497.9
The Company removed gross and accumulated amortization balances related to intangible assets that are fully amortized as of December 31,
2024 and 2023.
Estimated future amortization expense is as follows (in millions):
2025
$
50.8
2026
43.8
2027
33.4
2028
17.9
2029
13.1
Thereafter
8.0
$
167.0
7. Property and Equipment
Net property and equipment consisted of the following (in millions):
December 31,
2024
2023
Computer hardware and software
$
198.2 $
180.5
Furniture, fixtures and equipment
36.0
29.6
Leasehold improvements
25.8
27.0
Work-in-progress
13.3
6.5
273.3
243.6
Accumulated depreciation
(190.7)
(162.2)
$
82.6 $
81.4
32
The Company has capitalized costs related to its various technology initiatives. At December 31, 2024, the net book value of computer
software was $49.0 million, which included work-in-progress of $12.7 million. At December 31, 2023, the net book value of computer
software was $44.5 million, which included work-in-progress of $4.7 million.
The following table summarizes the presentation of depreciation expense within the accompanying consolidated statements of operations and
comprehensive income (in millions).
Year Ended December 31,
2024
2023
2022
SG&A expenses
$
30.5 $
26.5 $
25.3
Costs of services
2.0
1.4
1.0
$
32.5 $
27.9 $
26.3
8. Long-Term Debt
Long-term debt consisted of the following (in millions):
December 31,
2024
2023
Senior Secured Credit Facility:
$500 million revolving credit facility, due 2028
$
— $
—
Term loan B, due 2030
493.8
498.8
Unsecured Senior Notes, due 2028
550.0
550.0
1,043.8
1,048.8
Unamortized deferred loan costs
(5.3)
(7.2)
Term loan B, principal payments due in the next 12 months
(5.0)
(5.0)
Long-term debt
$
1,033.5 $
1,036.6
__________
The Company is required to make quarterly minimum principal payments totaling $5.0 million annually on the term loan until its maturity date; this amount is
included in other current liabilities on the accompanying consolidated balance sheets. Taking into consideration the $5.0 million annual required principal
payments, the balance due at maturity will be $466.3 million.
Senior Secured Credit Facility — In March 2024, the Company amended its senior secured credit facility (the "facility") with a 50-basis point
reduction in the term loan B ("term loan") interest rate. As a result, borrowings under the term loan bear interest, at the Company's election, at
(i) the secured overnight financing rate ("SOFR") plus 1.75 percent, or (ii) the bank's base rate plus 0.75 percent. Related to the debt
amendment there were $0.9 million of costs. The Company accounted for the debt amendment as a modification and accordingly, these costs
were expensed as incurred. There was an insignificant amount of previously capitalized costs that were written off. Borrowings under the
$500.0 million revolving credit facility (the "revolver") bear interest, at the Company's election, at (i) SOFR plus a 10 basis points adjustment
plus 2.00 to 3.00 percent, or (ii) the bank's base rate plus 1.00 to 2.00 percent, depending on leverage levels. A commitment fee of 0.30 to
0.45 percent is payable on the undrawn portion of the revolver. The facility is subject to various restrictive covenants including, when
amounts are drawn under the revolver, a maximum ratio of senior secured debt to trailing-twelve-months of lender-defined consolidated
EBITDA of 3.75 to 1, which was 1.09 to 1 at December 31, 2024. The facility is secured by substantially all of the Company's assets and at
December 31, 2024, the Company was in compliance with its debt covenants.
Unsecured Senior Notes — The Company has $550.0 million of unsecured senior notes, due in 2028, which bear interest at 4.625 percent
payable semiannually in arrears on May 15 and November 15. These notes are unsecured obligations and are subordinate to the senior secured
credit facility. These notes also contain certain customary limitations including, the Company's ability to incur additional indebtedness,
engage in mergers and acquisitions, transfer or sell assets, and make certain distributions.
33
9. Commitments and Contingencies
Purchase Obligations — The Company's purchase obligations include non-cancelable job board service agreements, software maintenance
and license agreements and software subscriptions. The following is a summary of these obligations as of December 31, 2024, which excludes
lease liabilities and other current liabilities that are included in the accompanying consolidated balance sheets (in millions):
2025
$
29.2
2026
10.7
2027
3.2
2028
0.5
$
43.6
Other Commitments — The workers' compensation loss reserves were $2.8 million and $3.0 million, net of anticipated insurance and
indemnification recoveries of $10.5 million and $10.5 million, at December 31, 2024 and 2023, respectively. To secure obligations
for workers’ compensation claims and other obligations, the Company has undrawn stand-by letters of credit of $3.7 million.
Certain employees participate in the Company’s Amended and Restated Change in Control Severance Plan and/or have separate agreements
that provide for certain benefits in the event of termination at the Company's convenience, as defined by the plan or agreement. Generally,
these benefits are based on the employee’s position in the Company and include severance and continuation of health insurance, and may
contain acceleration of equity grants and a pro-rata bonus based on the portion of the year employed.
Legal Proceedings — The Company is involved in various legal proceedings, investigations, claims, and litigation arising in the ordinary
course of business, including collective class and PAGA actions alleging violations of wage and hour laws. The Company does not believe
that the disposition of matters that are pending or asserted will have a material effect on its consolidated financial statements.
10. Stockholders' Equity
Under stock repurchase programs approved by the Company’s Board of Directors, the Company repurchased 3.5 million of its common
shares for $329.3 million during 2024 and 3.4 million shares for $275.7 million during 2023. All repurchased shares have been retired. Under
the two-year, $750.0 million stock repurchase program, which was announced on April 24, 2024 and superseded the previous program, there
was approximately $528.5 million remaining at year end for future stock repurchases.
11. Stock-Based Compensation and Other Employee Benefit Plans
The Company believes that stock-based compensation aligns the interests of its employees and directors with those of its stockholders. Stock-
based compensation provides incentives to retain and motivate executive officers and key employees responsible for driving Company
performance and maintaining important relationships that contribute to the growth of the Company. As of December 31, 2024, the Company
has two stock-based compensation plans:
2010 Plan — On June 13, 2019, the stockholders of the Company approved the Second Amended and Restated 2010 Incentive Award Plan
(the "2010 Plan"). This plan permits the grant of incentive stock options, nonqualified stock options, dividend equivalent rights, stock
payments, deferred stock, restricted stock awards, restricted stock units ("RSUs"), performance shares and other incentive awards, stock
appreciation rights and cash awards to its employees, directors, and consultants. As of December 31, 2024, there were 1.1 million shares
available for issuance under the 2010 Plan.
2012 Plan — The Board of Directors adopted the Second Amended and Restated 2012 Employment Inducement Incentive Award Plan on
April 26, 2018 (the "2012 Plan"), which is amended from time to time to add additional shares. This plan allows for grants of stock to
employees as employment inducement awards pursuant to NYSE rules. The terms of the 2012 Plan are similar to the 2010 Plan. As
of December 31, 2024, there was an immaterial number of shares available for issuance under the 2012 Plan.
Stock-based compensation expense was included in SG&A expenses in the accompanying consolidated statements of operations and
comprehensive income and was $42.3 million, $44.0 million, and $49.3 million for the years ended December 31, 2024, 2023, and 2022,
respectively.
For the year ended December 31, 2024, there was an excess tax shortfall of $0.2 million related to stock-based compensation arrangements.
For the years ended December 31, 2023 and 2022, there were excess tax benefits of $3.2 million and $4.3 million, respectively, related to
stock-based compensation arrangements.
Restricted Stock Units — The Company issues RSUs with (i) service conditions; and (ii) a combination of service and market and/or
performance conditions. RSUs generally vest over one- to four-year periods, and the RSUs that have performance conditions are based on the
achievement of specified annual or multi-year financial or other targets. In addition, the Company grants awards to certain executives that
include three-year financial performance targets plus a component based on achievement of total shareholder return ("TSR") relative to an
objectively selected group of industry peers over a three-year period, with payouts ranging from zero to 200 percent of the target award.
34
The fair value of each RSU is based on the grant-date fair market value of the awards. The fair value of the Company's RSUs, other than the
TSR components thereof, were determined on the grant date based on the closing market price for the Company's stock. The fair values of the
TSR components of the awards were $11.21, $6.41, and $8.71 per share for the 2024, 2023 and 2022 awards, respectively, determined on the
grant date using a Monte Carlo simulation model based on the following assumptions:
2024
2023
2022
Expected term (years)
3.0
3.0
3.0
Dividend yield
—
—
—
Volatility factor
32.9 %
36.0 %
43.9 %
Risk-free interest rate
4.3 %
3.7 %
1.8 %
Compensation expense for RSUs is determined based on the grant-date fair value of those awards, net of an estimated forfeiture rate. The
forfeiture rate estimates the number of awards that will eventually vest and is based on historical vesting patterns. Compensation expense for
RSUs with performance conditions based on financial targets are measured on the amount of shares ultimately expected to vest, estimated at
each reporting date based on management’s expectations regarding the relevant performance criteria. Compensation expense for all other
RSUs are recognized on a straight-line basis, net of an estimated forfeiture rate over the requisite service period of the award.
A summary of the Company’s RSU activity is presented below (in millions, except fair value per unit):
Performance/
Market
and Service
Conditions
Service
Conditions
Total
Weighted-
Average Grant-
Date Fair
Value Per Unit
December 31, 2023
0.6
0.6
1.2
$
92.34
Granted
0.2
0.2
0.4
98.03
Vested
(0.2)
(0.3)
(0.5)
95.29
Forfeited
(0.1)
—
(0.1)
90.21
December 31, 2024
0.5
0.5
1.0
93.66
Expected to vest
0.5
0.5
1.0
93.68
__________________
Vested shares include 0.2 million shares surrendered for payment of employee income taxes. A portion of these shares were available for re-issuance under the
2010 Plan.
As of December 31, 2024, there was unrecognized compensation expense of $48.1 million related to unvested RSUs based on awards that are
expected to vest. The unrecognized compensation expense is expected to be recognized over a weighted-average period of approximately 1.5
years. The fair value of RSUs that vested was $45.5 million in 2024, $50.2 million in 2023, and $49.3 million in 2022. The weighted-average
grant-date fair value per unit of RSUs was $98.03 in 2024, $76.69 in 2023, and $110.62 in 2022.
Employee Stock Purchase Plan — The stockholders of the Company approved the Second Amended and Restated 2010 Employee Stock
Purchase Plan (“ESPP”) on June 18, 2020. The ESPP allows eligible employees to purchase common stock of the Company, through payroll
deductions, at a 15 percent discount of the lower of the market price on the first day or the last day of the semi-annual purchase
periods. Participants are required to hold the shares for a 12-month period after the purchase date. The ESPP is intended to qualify as an
employee stock purchase plan under the Internal Revenue Service ("IRS") Code Section 423. Eligible employees may contribute up to a
certain percentage set by the plan administrator of their eligible earnings toward the purchase of the stock (subject to certain IRS
limitations). As of December 31, 2024, there were 0.4 million shares available for issuance under the ESPP.
35
Shares of common stock are transferred to participating employees at the conclusion of each six-month offering period, which ends on the last
business day of the month in March and September each year. Compensation expense is measured using a Black-Scholes valuation model.
The fair values of the options granted under the ESPP were estimated using the Black-Scholes valuation model at the date of grant based on
the following assumptions:
Year Ended December 31,
2024
2023
2022
Expected term (years)
0.5
0.5
0.5
Dividend yield
—
—
—
Expected volatility
27.3 - 29.8%
38.1 - 38.7%
27.8 - 32.4%
Weighted-average risk-free interest rate
5.1 - 5.3%
3.8 - 4.7%
0.1 - 1.0%
Average Black-Scholes valuation per share
$
21.27 $
23.01 $
27.60
Shares issued (millions)
0.2
0.3
0.2
Stock-based compensation expense (millions)
$
4.8 $
6.1 $
6.2
Deferred Compensation Plan — The Company’s Deferred Compensation Plan, which became effective on June 1, 2017 and has been
amended from time to time (the "DCP"), allows for eligible management and highly-compensated key employees to elect to defer a portion of
their compensation to later years. These deferrals are subject to investment risk and a risk of forfeiture under certain circumstances.
Participants may choose from various investment options representing a broad range of asset classes. The Company’s deferred compensation
plan liability was $17.8 million and $16.6 million at December 31, 2024 and 2023, respectively, which was primarily included in other long-
term liabilities in the accompanying consolidated balance sheets. The Company established a rabbi trust to fund the DCP, which is primarily
comprised of mutual funds measured at fair value using the net asset value practical expedient, and approximates the deferred compensation
plan liability balances.
Employee Defined Contribution Plans — The Company maintains various 401(k) retirement savings plans for the benefit of our eligible U.S.
employees. Under terms of these plans, eligible employees are able to make contributions to these plans on a tax-deferred basis. The
Company made matching contributions to the 401(k) plans of $26.6 million in 2024, $26.1 million in 2023, and $22.5 million in 2022.
12. Income Taxes
The provision for income taxes consists of the following (in millions):
Year Ended December 31,
2024
2023
2022
Current:
Federal
$
19.2 $
34.8 $
44.4
State
7.3
11.8
15.8
Foreign
6.9
5.0
4.9
33.4
51.6
65.1
Deferred:
Federal and State
31.8
28.5
31.6
Foreign
(0.3)
(1.7)
—
31.5
26.8
31.6
$
64.9 $
78.4 $
96.7
Income from continuing operations before income taxes consists of the following (in millions):
Year Ended December 31,
2024
2023
2022
United States
$
222.1 $
283.5 $
347.6
Foreign
18.0
14.2
16.0
$
240.1 $
297.7 $
363.6
36
The components of deferred tax (liabilities) assets are as follows (in millions):
December 31,
2024
2023
Intangibles
$
(215.6) $
(185.3)
Depreciation expense
(4.6)
(7.2)
Operating lease right-of-use assets
(15.1)
(15.2)
Operating lease liabilities
16.0
15.9
Allowance for doubtful accounts
1.4
1.2
Employee-related accruals
15.8
17.5
Stock-based compensation
10.0
11.8
Other
4.6
5.3
$
(187.5) $
(156.0)
The reconciliation between the amount computed by applying the U.S. federal statutory tax rate of 21 percent to income before income taxes
and the income tax provision is as follows (in millions):
Year Ended December 31,
2024
2023
2022
Income tax provision at the statutory rate
$
50.4 $
62.5 $
76.3
State income taxes, net of federal benefit
9.9
13.6
17.3
Nondeductible executive compensation
1.9
4.2
5.4
Disallowed meals and entertainment expenses
1.1
1.2
0.5
Excess stock-based compensation benefit
0.2
(2.6)
(3.5)
Work opportunity tax credit
(1.7)
(1.8)
(2.1)
Other
3.1
1.3
2.8
$
64.9 $
78.4 $
96.7
As of December 31, 2024, the Company had $1.2 million of foreign net operating losses, which will start to expire in 2030. The Company has
recorded a valuation allowance of approximately $0.3 million and $0.6 million at December 31, 2024 and 2023, respectively, related to
credits and net operating loss carryforwards. The Company had gross deferred tax assets of $59.0 million and $61.0 million and gross
deferred tax liabilities of $246.2 million and $216.4 million at December 31, 2024 and 2023, respectively. Management has determined the
gross deferred tax assets are realizable.
At December 31, 2024, the Company had undistributed earnings of foreign subsidiaries of approximately $13.1 million, substantially all of
which are permanently reinvested. The Company will repatriate a portion of these foreign earnings in situations it deems advantageous for
business operations, tax, or cash management reasons. In doing so, the Company could be subject to state income and foreign taxes which
would be insignificant. The determination of the amount of unrecognized deferred income tax liability for any basis differences on the
permanently reinvested foreign earnings is not practicable due to the complexities associated with this hypothetical calculation.
At December 31, 2024 and 2023, there were $1.2 million of unrecognized tax benefits, respectively, and changes during those years were not
significant. If recognized, these unrecognized tax benefits would affect the annual effective tax rate. The gross unrecognized tax benefits are
included in other long-term liabilities in the accompanying consolidated balance sheets. The Company recognizes interest and penalties
related to uncertain tax positions in income tax expense in the accompanying consolidated statements of operations and comprehensive
income. The amount of interest and penalties recognized in the consolidated financial statements is not significant. The Company believes
that there will be no significant decrease in unrecognized tax benefits by the end of 2024.
The Company is subject to taxation in the United States and various states and foreign jurisdictions. The IRS has completed an examination of
the Company's U.S. income tax return for the 2018 tax year with no change. The Company remains subject to U.S. federal income tax
examinations for 2021 and subsequent years. For the majority of U.S. states, with few exceptions and generally for the foreign tax
jurisdictions, the Company remains subject to examination for 2020 and subsequent years.
37
13. Earnings per Share
The following is a reconciliation of the number of shares and share equivalents used to calculate basic and diluted earnings per share (in
millions, except per share amounts):
Year Ended December 31,
2024
2023
2022
Income from continuing operations
$
175.2
$
219.3
$
266.9
Income from discontinued operations, net of income taxes
—
—
1.2
Net income
$
175.2
$
219.3
$
268.1
Weighted-average number of common shares outstanding - basic
45.2
48.3
50.6
Dilutive effect of common share equivalents
0.5
0.4
0.7
Weighted-average number of common shares and share equivalents
outstanding - diluted
45.7
48.7
51.3
Basic earnings per share:
Continuing operations
$
3.88
$
4.54
$
5.27
Discontinued operations
—
—
0.03
$
3.88
$
4.54
$
5.30
Diluted earnings per share:
Continuing operations
$
3.83
$
4.50
$
5.21
Discontinued operations
—
—
0.02
$
3.83
$
4.50
$
5.23
38
14. Segment Reporting
ASGN provides information technology ("IT") services and professional solutions across the commercial and government sectors. ASGN
operates through two segments, Commercial and Federal Government. The Commercial Segment, which is the largest segment, provides
consulting, creative digital marketing, and permanent placement services primarily to Fortune 1000 and large mid-market companies. The
Federal Government Segment provides advanced IT solutions to the Department of Defense, the intelligence community, and key federal
civilian agencies, namely the Department of Homeland Security. Virtually all of the Company's revenues are generated in the United States.
The Company's chief executive officer ("CEO") is the chief operating decision maker and he reviews segment revenues, gross profit and
operating income for each segment. He also considers forecast-to-actual variances on a monthly basis for these profit measures when making
decisions about allocating resources to the segments and uses these segment profit measures in the annual budget process. The CEO does not
evaluate, manage or measure performance of segments using asset information. Accordingly, assets by reportable segment are not disclosed.
Segment information is as follows (in millions):
Year Ended December 31, 2024
Commercial
Federal
Government
Total
Revenues
Consulting
$
1,128.2
$
1,231.0
$
2,359.2
Assignment
1,740.5
—
1,740.5
2,868.7
$
1,231.0
4,099.7
Costs of services
1,935.8
980.2
2,916.0
Gross profit
932.9
250.8
1,183.7
Segment depreciation and other amortization
29.6
5.0
34.6
Other segment expenses
588.3
121.0
709.3
Segment SG&A expenses
617.9
126.0
743.9
Amortization of intangible assets
28.5
29.6
58.1
Segment operating income
286.5
95.2
381.7
Corporate SG&A expenses
77.3
Operating income
304.4
Interest expense, net
64.3
Income before taxes
$
240.1
Year Ended December 31, 2023
Commercial
Federal
Government
Total
Revenues
Consulting
$
1,095.5
$
1,276.2
$
2,371.7
Assignment
2,078.9
—
2,078.9
3,174.4
1,276.2
4,450.6
Costs of services
2,156.8
1,013.8
3,170.6
Gross profit
1,017.6
262.4
1,280.0
Segment depreciation and other amortization
20.3
4.3
24.6
Other segment expenses
618.4
122.0
740.4
Segment SG&A expenses
638.7
126.3
765.0
Amortization of intangible assets
34.8
36.9
71.7
Segment operating income
344.1
99.2
443.3
Corporate SG&A expenses
79.2
Operating income
364.1
Interest expense, net
66.4
Income before taxes
$
297.7
39
Year Ended December 31, 2022
Commercial
Federal
Government
Total
Revenues
Consulting
$
959.6
$
1,145.4
$
2,105.0
Assignment
2,476.1
—
2,476.1
3,435.7
1,145.4
4,581.1
Costs of services
2,309.5
902.0
3,211.5
Gross profit
1,126.2
243.4
1,369.6
Segment depreciation and other amortization
16.4
4.5
20.9
Other segment expenses
667.4
116.0
783.4
Segment SG&A expenses
683.8
120.5
804.3
Amortization of intangible assets
31.3
33.8
65.1
Segment operating income
411.1
89.1
500.2
Corporate SG&A expenses
90.7
Operating income
409.5
Interest expense, net
45.9
Income before taxes
$
363.6
______
Costs of services include an immaterial amount of depreciation expense.
Other segment expenses include compensation-related expenses, rent, marketing, and other general and administrative expenses.
Corporate SG&A expenses include compensation-related expenses, stock-based compensation, depreciation, acquisition, integration and strategic planning
expenses, and public company expenses.
Virtually all of the revenues from the Commercial Segment are generated from T&M contracts. Federal Government Segment revenues by
contract type are as follows (in millions):
Year Ended December 31,
2024
2023
2022
FFP
$
367.7 $
386.7 $
331.6
T&M
522.0
504.9
456.3
Cost reimbursable
341.3
384.6
357.5
1,231.0
1,276.2
1,145.4
Federal Government Segment revenues by customer type are as follows (in millions):
Year Ended December 31,
2024
2023
2022
Department of Defense and Intelligence Agencies
$
560.1 $
614.6 $
606.3
Federal Civilian
627.4
621.6
503.4
Other
43.5
40.0
35.7
$
1,231.0 $
1,276.2 $
1,145.4
Approximately 24 percent of Federal Civilian revenues are from the Department of Homeland Security.
40
15. Fair Value Measurements
Recurring Fair Value Measurements — The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and
accrued payroll approximate their fair value based on their short-term nature. The carrying amount of long-term debt recorded in the
Company’s accompanying consolidated balance sheet at December 31, 2024 was $1.0 billion (see Note 8. Long-Term Debt) and its fair value,
determined using quoted prices in active markets for identical liabilities (Level 1 inputs), was slightly less than the carrying value.
Nonrecurring Fair Value Measurements — Certain assets, such as goodwill and trademarks, are not measured at fair value on an ongoing
basis but are subject to fair value adjustments in certain circumstances, such as, when there is evidence of impairment.
16. Subsequent Events
On February 4, 2025, the Company announced it signed a definitive agreement to acquire TopBloc, LLC, a leading, tech-enabled Workday
consultancy, for $340.0 million, consisting of 90 percent cash and 10 percent equity. The acquisition is anticipated to close late in the first
quarter of 2025, subject to customary closing conditions and regulatory approvals.
41
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this Annual Report on Form 10-K, our management carried out an evaluation, under the supervision
and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of our disclosure controls
and procedures (as defined in Rule 13a-15(e) of the Exchange Act). Based on this evaluation, our Principal Executive Officer and Principal
Financial Officer have concluded that our disclosure controls and procedures are effective as of the end of the period covered by this
report. The term "disclosure controls and procedures" means controls and other procedures of the Company that are designed to ensure that
information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed,
summarized, and reported within the time periods specified in the SEC’s rules and forms. "Disclosure controls and procedures" include,
without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it
files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its Principal Executive
Officer and Principal Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required
disclosure.
Management’s Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) of
the Exchange Act) for the Company. The term "internal control over financial reporting" is defined as a process designed by, or under the
supervision of, our Principal Executive and Principal Financial Officers, or persons performing similar functions and effected by our Board of
Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those
policies and procedures that:
•
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the
assets of the Company;
•
Provide reasonable assurance that the transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles and that receipts and expenditures of the Company are being made only
in accordance with authorizations of management and directors of the Company; and
•
Provide reasonable assurance regarding prevention of timely detection of unauthorized acquisition, use, or disposition of the
Company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any
evaluation of effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions, or that
the degree of compliance with policies or procedures may deteriorate.
Management, under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, assessed the
effectiveness of our internal control over financial reporting as of December 31, 2024. In making this assessment, management used criteria
set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013).
Based on our assessment and those criteria, management believes that the Company maintained effective internal control over financial
reporting as of December 31, 2024. Our independent registered public accounting firm, Deloitte & Touche LLP, has included an attestation
report on our internal control over financial reporting, which is included above.
Changes in Internal Control over Financial Reporting
There were no changes in the Company’s internal control over financial reporting that occurred during the Company’s fourth quarter that
have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
42
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors of ASGN Incorporated
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of ASGN Incorporated and subsidiaries (the “Company”) as of December 31,
2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations
of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over
financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by
COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the
consolidated financial statements as of and for the year ended December 31, 2024, of the Company and our report dated February 21, 2025,
expressed an unqualified opinion on those financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the
effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over
Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.
We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance
with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit
included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and
evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we
considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of
management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or
that the degree of compliance with the policies or procedures may deteriorate.
/s/ DELOITTE & TOUCHE LLP
Richmond, Virginia
February 21, 2025
43
Item 9B. Other Information
During the three months ended December 31, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading
arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
None.
PART III
Item 10. Directors, Executive Officers and Corporate Governance
Information responsive to this item will be set forth in the Company’s definitive proxy statement (the "2025 Proxy Statement") and is
incorporated herein by reference. The 2025 Proxy Statement will be filed with the SEC within 120 days after the end of the Company’s fiscal
year.
Item 11. Executive Compensation
Information responsive to this item will be set forth in the 2025 Proxy Statement to be filed with the SEC within 120 days after the end of the
Company’s fiscal year, and is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Information responsive to this item will be set forth in the 2025 Proxy Statement to be filed with the SEC within 120 days after the end of the
Company’s fiscal year, and is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions and Director Independence
Information responsive to this Item will be set forth in the 2025 Proxy Statement to be filed with the SEC within 120 days after the end of the
Company’s fiscal year, and is incorporated herein by reference.
Item 14. Principal Accounting Fees and Services
Information responsive to this Item will be set forth in the 2025 Proxy Statement to be filed with the SEC within 120 days after the end of the
Company’s fiscal year, and is incorporated herein by reference.
PART IV
Item 15. Exhibits and Financial Statement Schedule
(a) List of documents filed as part of this report
1. Financial Statements:
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34)
Consolidated Balance Sheets at December 31, 2024 and 2023
Consolidated Statements of Operations and Comprehensive Income for the Years Ended December 31, 2024, 2023 and 2022
Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2024, 2023 and 2022
Consolidated Statements of Cash Flows for the Years Ended December 31, 2024, 2023 and 2022
Notes to Consolidated Financial Statements
2. Financial Statement Schedule:
Schedule II—Valuation and Qualifying Accounts
Schedules other than those referred to above have been omitted because they are not applicable or not required under the
instructions contained in Regulation S-X or because the information is included elsewhere in the financial statements or notes
thereto.
Item 16. Form 10-K Summary
None.
44
ASGN INCORPORATED AND SUBSIDIARIES
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS
Years Ended December 31, 2024, 2023 and 2022
(In millions)
Description
Balance at
beginning of
year
Charged to
costs and
expenses
Deductions(1)
Balance at end
of year
Year ended December 31, 2024
Allowance for doubtful accounts
$
4.0
2.7
(1.7) $
5.0
Workers’ compensation loss reserves
$
13.4
2.8
(2.9) $
13.3
Year ended December 31, 2023
Allowance for doubtful accounts
$
4.0
1.8
(1.8) $
4.0
Workers’ compensation loss reserves
$
12.8
3.4
(2.8) $
13.4
Year ended December 31, 2022
Allowance for doubtful accounts
$
3.1
2.0
(1.1) $
4.0
Workers’ compensation loss reserves
$
12.8
3.2
(3.2) $
12.8
______
(1) Deductions from allowance for doubtful accounts include write-offs of uncollectible accounts receivable.
Deductions from workers’ compensation loss reserves include payments of claims and changes related to anticipated insurance and indemnification recoveries.
45
INDEX TO EXHIBITS
Number
Description
3.1
Amended and Restated Certificate of Incorporation of On Assignment, Inc., effective June 23, 2014
(incorporated by reference from Exhibit 3.1 to our Current Report on Form 8-K filed with the SEC on June 25,
2014)
3.2
Certificate of Amendment of Amended and Restated Certificate of Incorporation of On Assignment, Inc.
effective April 2, 2018 (incorporated by reference from Exhibit 3.1 to our Current Report on Form 8-K filed with
the SEC on March 16, 2018)
3.3
Fifth Amended and Restated Bylaws of ASGN Incorporated, effective December 7, 2022 (incorporated by
reference from Exhibit 3.1 to our Current Report on Form 8-K filed with the SEC on December 13, 2022)
4.1
Specimen Common Stock Certificate (P)
4.2
Description of the Registrant Securities Registered Under Section 12 of the Securities Exchange Act of 1934
(incorporated by reference from Exhibit 4.2 to our Annual Report on Form 10-K filed with the SEC on March 2,
2020)
4.3
Indenture, dated November 22, 2019, among ASGN Incorporated, the guarantors party thereto and U.S. Bank
National Association, as trustee (incorporated by reference from Exhibit 10.8 to our Annual Report on Form 10-
K filed with the SEC on March 2, 2020)
4.4
Supplemental Indenture No. 1 dated as of June 7, 2021, among ASGN Incorporated, the guarantors party thereto,
the released parties thereto and U.S. Bank National Association, as trustee (incorporated by reference from
Exhibit 4.2 to our Quarterly Report on Form 10-Q filed with the SEC on August 9, 2021)
4.5
Supplemental Indenture No. 2 dated as of September 29, 2021 among ASGN Incorporated, the guarantors party
thereto, the released parties thereto and U.S. Bank National Association, as trustee dated as of November 22,
2019 (incorporated by reference from Exhibit 10.1 to our Quarterly Report on Form 10-Q filed with the SEC on
November 9, 2021)
4.6
Supplemental Indenture No. 3 dated as of November 15, 2022, among ASGN Incorporated, the guarantors party
thereto, and U.S. Bank Trust Company, National Association, as trustee
10.1
Third Amended and Restated Credit Agreement, dated as of August 31, 2023, among ASGN Incorporated, as the
borrower, Wells Fargo Bank, National Association, as administrative agent, and the syndication agents,
documentation agents, and other lenders party thereto (incorporated by reference from Exhibit 10.1 to our
Quarterly Report on Form 10-Q filed with the SEC on November 2, 2023)
10.2
First Amendment to Third Amended and Restated Credit Agreement, dated as of March 13, 2024, by and among
ASGN Incorporated, as the borrower, Wells Fargo Bank, National Association, as administrative agent, and the
lenders named therein (incorporated by reference from Exhibit 10.1 to our Current Report on Form 8-K filed
with the SEC on March 14, 2024)
10.3
ASGN Incorporated Second Amended and Restated 2010 Employee Stock Purchase Plan, dated as of March 18,
2020 (incorporated by reference from Exhibit 10.1 to our Quarterly Report on Form 10-Q filed with the SEC on
May 11, 2020)†
10.4
ASGN Incorporated Second Amended and Restated 2010 Incentive Award Plan, dated as of August 8, 2019
(incorporated by reference from Exhibit 10.1 to our Quarterly Report on Form 10-Q filed with the SEC on
November 8, 2019)†
10.5
ASGN Incorporated 2010 Incentive Award Plan Senior Executive Time-Vesting Restricted Stock Unit Award
Notice for grants prior to 2025 (incorporated by reference from Exhibit 10.11 to our Annual Report on Form 10-
K filed with the SEC on March 2, 2020)†
10.6*
ASGN Incorporated 2010 Incentive Award Plan Senior Executive Time-Vesting Restricted Stock Unit Award
Notice for 2025 grants†
10.7
ASGN Incorporated 2010 Incentive Award Plan Form of Senior Executive Performance-Based Restricted Stock
Unit Award Notice for grants prior to 2025 (incorporated by reference from Exhibit 10.17 from our Annual
Report on Form 10-K filed with the SEC on March 1, 2022)†
10.8*
ASGN Incorporated 2010 Incentive Award Plan Form of Senior Executive Performance-Based Restricted Stock
Unit Award Notice for 2025 grants†
10.9
Second Amended and Restated ASGN Incorporated 2012 Employment Inducement Incentive Award Plan,
effective as of April 26, 2018 (incorporated by reference from Exhibit 10.20 to our Annual Report on Form 10-K
filed with the SEC on March 1, 2019)†
10.10
First Amendment to the Second Amended and Restated ASGN Incorporated 2012 Employment Inducement
Incentive Award Plan, effective as of June 8, 2021 (incorporated by reference from Exhibit 10.1 to our Quarterly
Report on Form 10-Q filed with the SEC on August 9, 2021)†
10.11
ASGN Incorporated Second Amended and Restated Deferred Compensation Plan, effective as of April 26, 2018
(incorporated by reference from Exhibit 10.2 to our Quarterly Report on Form 10-Q filed with the SEC on May
10, 2018)†
46
10.12
ASGN Incorporated Amended and Restated Change in Control Severance Plan and Summary Plan Description,
effective January 1, 2024 (incorporated by reference from Exhibit 10.10 to our Annual Report on Form 10-K
filed with the SEC on February 23, 2024)†
10.13
Employment Agreement, dated as of June 3, 2019, by and between ASGN Incorporated and Theodore S. Hanson
(incorporated by reference from Exhibit 10.22 to our Annual Report on Form 10-K filed with the SEC on March
2, 2020)†
10.14
Employment Agreement, dated as of January 8, 2007, by and between Rand Blazer and Apex Systems, Inc.
(incorporated by reference from Exhibit 10.35 to our Annual Report on Form 10-K filed with the SEC on March
18, 2013)†
10.15
Amendment No. 1 to the Employment Agreement, dated as of December 31, 2008, by and between Rand Blazer
and Apex Systems, Inc. (incorporated by reference from Exhibit 10.36 to our Annual Report on Form 10-K filed
with the SEC on March 18, 2013)†
10.16
Amendment No. 2 to the Employment Agreement, dated as of August 3, 2009, by and between Rand Blazer and
Apex Systems, Inc. (incorporated by reference from Exhibit 10.37 to our Annual Report on Form 10-K filed with
the SEC on March 18, 2013)†
10.17
Amendment No. 3 to the Employment Agreement, dated as of May 15, 2012, by and between Rand Blazer, On
Assignment, Inc. and Apex Systems, Inc. (incorporated by reference from Exhibit 10.38 to our Annual Report on
Form 10-K filed with the SEC on March 18, 2013)†
10.18
Amendment No. 4 to the Employment Agreement, dated as of May 15, 2012, by and between Rand Blazer and
Apex Systems, Inc. (incorporated by reference from Exhibit 10.39 to our Annual Report on Form 10-K filed with
the SEC on March 18, 2013)†
10.19*
Letter Amendment to Employment Agreement, dated January 29, 2025, by and between Rand Blazer and ASGN
Incorporated†
10.20
Employment Agreement, dated January 3, 2022, by and between ASGN Incorporated and Marie Perry
(incorporated by reference form Exhibit 10.1 to our Quarterly Report on Form 10-Q filed with the SEC on
November 7, 2022)†
10.21
Severance Term Letter, as of December 13, 2017, by and between On Assignment, Inc. and Jennifer Hankes
Painter (incorporated by reference from Exhibit 10.38 to our Annual Report on Form 10-K filed with the SEC on
March 1, 2018)†
10.22
Severance Term Letter, dated April 19, 2023, by and between ASGN Incorporated and Rose L. Cunningham
(incorporated by reference from Exhibit 10.1 to our Quarterly Report on Form 10-Q filed with the SEC on May
4, 2023)†
10.23
Form of Indemnification Agreement (incorporated by reference from Exhibit 10.1 to our Annual Report on Form
10-K filed with the SEC on March 16, 2007)†
19.1
ASGN Incorporated Insider Trading Policy, effective January 25, 2023 (incorporated by reference from Exhibit
19.1 of our Annual Report on Form 10-K filed with the SEC on February 23, 2024)
21.1*
Subsidiaries of the Registrant
23.1*
Consent of Independent Registered Public Accounting Firm
31.1*
Certification of Theodore S. Hanson, Chief Executive Officer, pursuant to Rule 13a-14(a) or 15d-14(a)
31.2*
Certification of Marie L. Perry, Executive Vice President and Chief Financial Officer, pursuant to Rule 13a-14(a)
or 15d-14(a)
32.1*
Certification of Theodore S. Hanson, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350
32.2*
Certification of Marie L. Perry, Executive Vice President and Chief Financial Officer, pursuant to 18 U.S.C.
Section 1350
97.1
Policy for Recovery of Erroneously Awarded Compensation, effective as of October 2, 2023 (incorporated by
reference from exhibit 97.1 of our Annual Report on Form 10-K filed with the SEC on February 23, 2024)†
101.INS*
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its
XBRL tags are embedded within the XBRL document)
101.SCH*
Inline XBRL Taxonomy Extension Schema Document
101.CAL*
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*
Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*
Inline XBRL Taxonomy Extension Presentation Linkbase Document
104.1*
Cover page interactive data file (embedded within the Inline XBRL document)
____
*
Filed herewith.
47
†
These exhibits relate to management contracts or compensatory plans, contracts or arrangements in which
directors and/or named executive officers of the Registrant may participate.
P
Incorporated by reference from an exhibit filed with Registrant’s Registration Statement on Form S 1 (File No.
03350646) declared effective by the SEC on September 21, 1992. This exhibit originally filed in paper format.
Accordingly, a hyperlink has not been provided.
48
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the registrant has duly caused this Report to be signed on its behalf
by the undersigned, thereunto duly authorized, on this 21st day of February, 2025.
ASGN Incorporated
/s/ Theodore S. Hanson
Theodore S. Hanson
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of
the registrant and in the capacities indicated and on the dates indicated.
Signature
Title
Date
/s/ Theodore S. Hanson
Chief Executive Officer and Director
February 21, 2025
Theodore S. Hanson
(Principal Executive Officer)
/s/ Marie L. Perry
Executive Vice President and Chief Financial Officer
February 21, 2025
Marie L. Perry
(Principal Financial Officer)
/s/ Rose Cunningham
Vice President, Chief Accounting Officer and Controller
February 21, 2025
Rose Cunningham
(Principal Accounting Officer)
/s/ Arshad Matin
February 20, 2025
Arshad Matin
Chair of the Board of Directors
/s/ Brian J. Callaghan
February 20, 2025
Brian J. Callaghan
Director
/s/ Joseph W. Dyer
February 20, 2025
Joseph W. Dyer
Director
/s/ Mark A. Frantz
February 21, 2025
Mark A. Frantz
Director
/s/ Maria R. Hawthorne
February 20, 2025
Maria R. Hawthorne
Director
/s/ Jonathan S. Holman
February 20, 2025
Jonathan S. Holman
Director
/s/ Carol J. Lindstrom
February 20, 2025
Carol J. Lindstrom
Director
/s/ Patricia L. Obermaier
February 21, 2025
Patricia L. Obermaier
Director
/s/ Edwin A. Sheridan IV
February 20, 2025
Edwin A. Sheridan IV
Director
49