ASGN Incorporated

Q2 revenue exceeded $1 billion; Commercial revenue was $701.7 million, down 0.9% year over year, and Federal revenue was $305.3 million, down 2.3% year over year. Gross margin was 28.3%, with Commercial gross margin at 32.1% and Federal gross margin at 19.6%; net income was $14.2 million; adjusted EBITDA was $96.7 million with a 9.6% margin; SG&A was $226.2 million. Free cash flow was $46.3 million, or 48% of adjusted EBITDA. For Q3 2026, management guided to revenue of $994 million to $1.024 billion, net income of $14.5 million to $23 million, adjusted EBITDA of $95 million to $105 million, and adjusted EBITDA margin of 9.6% to 10.3%. They also said strategic planning expenses should be $7.5 million to $9.5 million in Q3 and continue to decline, and they continue targeting 60% to 65% full-year free cash flow conversion to adjusted EBITDA.

Ted Hanson framed the quarter as evidence that Everforth is benefiting from a broader shift toward AI deployment in complex enterprise and government environments. He emphasized that the company’s edge comes from combining industry expertise, alliance partnerships, governance/cybersecurity, and specialized talent to move AI from pilot to production. His tone was confident and increasingly constructive, especially around TotalSight, which he described as an enterprise AI operating platform that helps customers scale AI securely and repeatedly.

Marie Perry highlighted the core financials: $1 billion-plus revenue, 28.3% gross margin, $14.2 million of net income, $96.7 million of adjusted EBITDA, and $46.3 million of free cash flow. She noted cash and cash equivalents of $152.9 million, $180 million available on the revolver, net leverage of 3.1x, and a post-quarter refinancing into a new 5-year $600 million facility that extends maturity by 3 years. Capital allocation remains focused first on debt repayment and then opportunistic share repurchases; the company repurchased 0.4 million shares at $30.07 and had about $923 million remaining under the authorization.

Analysts pressed on what changed over the last three months, and management pointed to a meaningful acceleration in commercial bookings, stabilization in staffing, and better-than-expected federal execution, especially from DHS. Questions on the Q3 range focused on what could drive the top end; Ted said commercial momentum is the key driver, while federal acceleration is expected more in Q4 and into 2027. On conversion and free cash flow, Shiv said enterprise-platform booking-to-revenue conversion is returning to historical norms, and Marie said second-half free cash flow should improve as revenue and EBITDA rise and DSO improves. They also said Quinnox is performing as expected, has higher gross margins than the overall commercial business, and is helping deepen platform capabilities and India delivery.